Statistical Decision Theory in a Macro Simulation Model: Feed Graiin Sector

A method for taking uncertainty into account when formulating aggregate agricultural policies is applied to the feed grain program. The impact of alternative feed grain programs on net farm income, Government payments, and feed grain production in the Southeastern Coastal Plains is shown. A model is developed to explain planted acreages of the major competing crops. The effects of alternative feed grain programs are evaluated using Mqnte Carlo simulation to account for random variation. Confidence intervals are placed on estimates of income and production resulting from selected feed grain programs.