We look at the same data as Tweeten and, given the price and political incentives to increase agricultural production—both in terms of area under cultivation and investments to increase yields worldwide—we think it is likely that the relative rates of growth in supply and demand will be much as they have been in past.

That is, rather than seeing a reversal, the odds are still in favor of supply growing faster than demand as farmers and governments fully adjust productive capacity.

Then the question is: would the resulting low prices cause the quantity demanded and supplied to recalibrate in a way that would rapidly adjust agriculture to reasonable profitable prices and revenues. Over the last many decades, it has been lack of rapid adjustment to low prices caused by supply shifting faster than demand that has been the overriding reason for commodity programs.

Daryll E. Ray holds the Blasingame Chair of Excellence in Agricultural Policy, Institute of Agriculture, University of Tennessee, and is the Director of UT’s Agricultural Policy Analysis Center (APAC). Harwood D. Schaffer is a Research Assistant Professor at APAC. (865) 974-7407; Fax: (865) 974-7298; dray@utk.edu and hdschaffer@utk.edu; http://www.agpolicy.org