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A simulation model is constructed with an integrated supply/demand framework. The model is capable o-f evaluating wheat policy decisions. such as domestic acreage programs, Stock levels, government exports, etc., which would affect demand and supply. The demand 'for U.S. wheat is analyzed ;with the explicit recognition of such factors as (1) the inelastic domestic demand for wheat, {2) the impact of government stock levels and.export activity on price movements, and (3) the interrelationship of domestic price, loan rate and total stock levels. The supply for U.S. wheat is developed on a regionalized basis with direct consideration o.f (1) the varying· effects of whea_t acreage. programs as expressed :through an effective support rate, and (2) the regionalization of supply elasticities with respect to market prices for wheat and other relevant regional variables.


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