THE IMPACT OF THE LDP ON CORN AND SOYBEAN BASIS IN MISSOURI

This study analyzed the effect of the Loan Deficiency Payment (LDP) program, established under the Federal Agriculture Improvement Reform (FAIR) act of 199, on corn and soybean basis in Missouri. Using daily corn and soybean basis data between 1993 and 1999 for multiple locations in Missouri, and incorporating a variable for when the LDP was in effect during 1998 and 1999, empirical models examining factors affecting corn and soybean basis were estimated. Results indicate that the presence of the LDP program has not had a significant economic impact on corn or soybean basis during the 1998 to 1999 period. Furthermore, factors affecting corn and soybean basis varied by time within the marketing year.