Towards a better estimation of agricultural supply elasticity: the case of soybean in Brazil

International audienceBrazil is a major exporter of several agricultural commodities and has shown strong interest in agricultural trade negotiations. For several commodities, trade liberalization is expected to be followed by farmgate prices increase and to boost domestic production. However, in a country as big as Brazil, possible supply responses to price increase will probably strongly differ from one region to another. This paper focus on soybeans for which Brazil became a top exporter. Based on panel data estimation technique, a soybean supply response function is estimated at the national and regional levels, allowing to better assess soybean supply own and cross price elasticity. Soybean supply is shown to be very price elastic. Moreover, soybean supply own price elasticity is much higher in the Center-North regions than in the South of the country. Substitution between livestock and soybean is also very significant in the Center-North region. World agricultural trade models should take account for such regional variability of soybean supply elasticity. The results also allow to discuss the issue of soybean expansion at the Amazon border