Ronald A. Babula, David A. Bessler, and Warren S. Payne
Author Affiliations: Ronald A. Babula is an industry economist, Agriculture and Forest Products Division, United States International Trade Commission, Washington, DC. David A. Bessler is professor, Department of Agricultural Economics, Texas A&M University, College Station, TX. Warren S. Payne is an international trade analyst, Agriculture and Forest Products Division, United States International Trade Commission, Washington, DC.
Contact:
Dr. Ronald A. Babula
Room 514d, Agriculture and Forest Products Division
United States International Trade Commission
500 E St., SW
Washington DC 20436
Phone: (202) 205-3331
Fax: (202) 205-2384
E-mail: babula@usitc.gov
Abstract: Using advanced methods of directed acyclic graphs (DAGs) with Bernanke structural vector autoregression (VAR) models, this article extends recent econometric research on quarterly U.S. markets for wheat and wheat-based, value-added products downstream. Analyses of impulse response simulations and forecast error variance decompositions provide updated estimates of market elasticity parameters that drive these markets, and updated policy-relevant information on how these quarterly markets run and dynamically interact. Results suggest that movements in wheat and downstream wheat-based markets strongly influence each other, although most of these effects occur at the longer run horizons beyond a single crop cycle.
Key Words: Bernanke structural VARs, directed acyclic graphs, quarterly wheat-related markets
JEL Classifications: C22, Q11
Crystal Yap, Ken Foster, Paul Preckel, Otto Doering, and Brian
Richert
Author Affiliations: Crystal Yap is an environmental consultant and professional cyclist, Millville, UT. Ken Foster, Paul Preckel, and Otto Doering are professors, Department of Agricultural Economics, Purdue University, W. Lafayette, IN. Brian Richert is associate professor , Department of Animal Sciences, Purdue University, W. Lafayette, IN.
Contact:
Ken Foster
Department of Agricultural Economics
Purdue University
403 W. State Street
West Lafayette, IN 47907-2056
Phone: (765) 494-1116
Fax: (765) 494-9176
E-mail:
kfoster@purdue.edu
Abstract: Regulatory changes by federal and state agencies portend a switch from nitrogen-based livestock manure disposal policies to phosphorus-based policies. This paper estimates the compliance costs of such a policy change for a hypothetical hog-grain farm in North Central Indiana. The farm includes 1,500 acres of cropland and has the capacity to raise 11,970 grow-finish hogs annually. The farm model also has the potential to produce four different crops on six different land types. A nonlinear math-programming model was developed to determine the optimal mix of management activities for a phosphorus-based regulation. The model allows mitigation of compliance costs via the choice between four different pig diets, three alternative methods of manure disposal, changes in timing of manure application, and crop pattern adjustments. This analysis concludes that the new regulation will result in a decrease in whole-farm returns above variable costs, the use of phytase enzyme in pig diets, and an increase in wheat acreage. The model also reveals that it is optimal for the farmer to hire a custom hauler to assist in application of manure in an effort to reduce the degree to which available field days constrain farming activities and land application of manure. The estimated cost to the farmer, as a result of the policy change, ranges between $0.56 and $21.74 per unit of pig production capacity.
Key Words: environmental policy, manure management, pork production
JEL Classifications: Q18
Jeffrey M. Gillespie, Christopher G. Davis and Noro C. Rahelizatovo
Author Affiliations: Jeffrey M. Gillespie is Associate Professor, Department of Agricultural Economics and Agribusiness, Louisiana State University, Baton Rouge, LA. Christopher G. Davis is an Economist, Economic Research Service, U.S. Department of Agriculture, Washington, D.C. Noro C. Rahelizatovo is a former Research Assistant, Department of Agricultural Economics and Agribusiness, Louisiana State University, Baton Rouge, LA.
Contact:
Jeffrey M. Gillespie
Dept. of Agricultural Economics and Agribusiness
101 Agricultural Administration Building
Louisiana State University
Baton Rouge, LA 70803
Phone: (225) 578-2759
FAX: (225) 578-2716
E-mail: jmgille@lsu.edu
Abstract: An important aspect of structural change in the U.S. hog industry has been the adoption of breeding technology. The adoption of each of four breeding technologies, weekly farrowing, intensive breeding, terminal crossbreeding, and artificial insemination, in U.S. hog production are analyzed using multivariate probit analysis. Results suggest that diversification, whether the producer raised breeding stock, debt and asset levels, and producer's education influence adoption rate. Larger, more risk averse producers were more likely to adopt technology. Producers who rated the quality of labor available as higher were more likely to adopt management-intensive technologies.
Key Words: technology adoption, hog industry, multivariate probit
JEL Classifications: N51, Q12
Brock Avery and Fred O. Boadu
Author Affiliations: Brock Avery is a Benefits Analyst, Hewitt Associates, Woodlands, TX. Fred Boadu is associate professor, Department of Agricultural Economics, Texas A&M University, College Station, TX.
Contact:
Frederick O. Boadu
Department of Agricultural Economics
Texas A&M University
352B Blocker Building
College Station, Texas 77843-2124
Phone: (979) 845-4410
Fax: (979) 862-1563
E-mail: f-boadu@tamu.edu
Abstract: This paper reports import demand elasticities for environmental goods and services (EGS) for the world in aggregate and for six world regions. The paper employs a pooled cross-section and time-series estimation procedure and makes per capita demand for EGS a function of economic, political, and structural factors. The results show that per capita incomes, exchange rates, political and economic freedoms, and debt, affect the demand for EGS. The results also show that demand for EGS is tied to the particular environmental problem facing a particular region. Exporters of EGS need to disaggregate world markets to better target products.
Key Words: environmental goods, demand elasticities, international trade
JEL Classifications: F18, F14
James A. Espey and Molly Espey
Author Affiliations: James A. Espey is extension associate, Clemson Institute for Economic & Community Development, Clemson University, Clemson, SC. Molly Espey is associate professor, Department of Applied Economics and Statistics, Clemson University, Clemson, SC.
Contact:
Molly Espey
Department of Applied Economics and Statistics
Clemson University
263 Barre Hall
Clemson, South Carolina 29634
Phone: (864) 656-6401
Fax: (864) 656-5776
E-mail: mespey@clemson.edu
Abstract: Meta-analysis is used to quantitatively summarize previous studies of residential electricity demand to determine if there are factors that systematically affect estimated elasticities. In this study, price and income elasticities of residential demand for electricity from previous studies are used as the dependent variables with data characteristics, model structure, and estimation technique as independent variables, using both least square estimation of a semi-log model and maximum likelihood estimation of a gamma model. The findings of this research can help better inform public policy makers, regulators, and utilities about the responsiveness of residential electricity consumers to price and income changes.
Key Words: electricity demand, income elasticity, meta-analysis, price elasticity, residential electricity demand
JEL Classifications: Q40, Q41, D12
Brian D. Adam, Seung Jee Hong, and Michael R. Dicks
Author Affiliations: Brian D. Adam and Michael R. Dicks are Professors, Dept. of Agricultural Economics, Oklahoma State University, and Seung Jee Hong is former graduate research assistant, Dept. of Agricultural Economics, Oklahoma State University, and Economist, Korea Rural Economics Institute.
Contact:
Brian D. Adam
Agricultural Economics Department
308 Agricultural Hall
Oklahoma State University
Stillwater, OK 74078
Phone: (405) 744-6854
Fax: (405) 744-8210
E-mail: badam@okstate.edu
Abstract: The Conservation Reserve Program takes cropland out of production for ten years, reducing grain supplies available to elevators. Results suggest that the program has negatively impacted elevator merchandising margins, but that elevators adjusted rather quickly to CRP changes, making most of the adjustment within one year. The reduction in margins reflects an element of pressure on agribusinesses that has not been measured in previous studies.
Key Words: Conservation Reserve Program, land retirement programs, country elevators, agribusiness, merchandising margins
JEL Classifications: Q1, Q2, D4, L1
Jayson L. Lusk and Edgar Cevallos
Author Affiliations: Jayson L. Lusk is Associate Professor, Department of Agricultural Economics, Purdue University. Edgar Cevallos is a former graduate student, Department of Agricultural Economics, Mississippi State University.
Contact:
Jayson Lusk
Department of Agricultural Economics
Krannert Building
Purdue University
403 W. State Street
W. Lafayette, IN 47907 2056
Phone: (765) 494-4253
Fax: (765) 494-9176
E-mail: jlusk@purdue.edu
Abstract: As the farm-to-retail price spread continues to grow, some cattle producers are beginning to consider integrating into the retail sector. Such a venture would require large investments in capital with uncertain return. This study seeks to determine the potential success of a stand-alone retail outlet selling "all natural" beef in an affluent area of Jackson, MS. Using choice-based conjoint analysis, demand for the new retail outlet is modeled as a function of the beef price at the store, distance of the store from consumers' homes, distance of the store from consumers' typical grocery store, and price of beef at substitute grocery stores. Simulation results suggest the proposed outlet could be a profitable venture, depending upon location and beef price.
Key Words: beef, conjoint, demand, retail outlet
JEL Classifications: Q13, D12, D4, M31
Michael R. Reed and Sayed H. Saghaian
Author Affiliations: Michael R. Reed is professor, Department of Agricultural Economics, University of Kentucky, Lexington, KY. Sayed H. Saghaian, formerly assistant research professor, Department of Agricultural Economics, University of Kentucky, is Lecturer in Agricultural Economics Faculty of Agriculture, Food and Natural Resources, University of Sydney, Sydney, Australia.
Contact:
Michael R. Reed
Department of Agricultural Economics
University of Kentucky
308 Charles E. Barnhart Building
Lexington, KY 40546-0276
Phone: (859) 257-7259
Fax: (859) 257-7290
E-mail: mrreed@uky.edu
Abstract: A residual demand model for beef exports to Japan is specified and estimated. The objective is to estimate the extent of market power. It is assumed each exporting country faces a downward-sloping residual demand curve, reflecting the market demand minus the supplies of competitors, and exporters maximize profit through their output decisions. The analysis is disaggregated by beef cut and form to capture the variation by beef market-segments. The results indicate that the highest markup of price over marginal cost belongs to U.S. frozen ribs, the only indication of market power by U.S. exporters. Canada is found to have limited market power, while Australia and New Zealand enjoy some market power, including five chilled beef categories.
Key Words: beef, Japan, market power, market share, residual demand
JEL Classifications: F12, L13, Q17
Hikaru Hanawa Peterson and Kentaro Yoshida
Author Affiliations: Hikaru Hanawa Peterson is assistant professor, Department of Agricultural Economics, Kansas State University, Manhattan, KS. Kentaro Yoshida is assistant professor, Institute of Policy and Planning Sciences, University of Tsukuba, Ibaraki, Japan.
Contact:
Hikaru Hanawa Peterson
Department of Agricultural Economics
304G Waters Hall
Kansas State University
Manhattan, KS 66506-4011
Phone: (785) 532-1509
Fax: (785) 532-6925
E-mail: hhp@ksu.edu
Abstract: Attitudes of Japanese consumers towards domestic and foreign varieties of rice are analyzed based on a survey. We find that the current retail prices for imported rice are higher than the average consumers' willingness-to-pay (WTP), while most domestic rice is priced below average WTP. Unfamiliarity or negative perceptions of safety and flavor of foreign rice lowers the WTP substantially. The WTP for U.S. rice is limited more by negative perceptions of flavor than from concerns about food safety.
Key Words: choice experiment, food safety, Japan, quality perceptions, rice, U.S. export, willingness-to-pay
JEL Classifications: Q13
Roland K. Roberts, Burton C. English, James A. Larson, Rebecca L. Cochran,
W. Robert Goodman, Sherry L. Larkin, Michele C. Marra, Steven W. Martin,
W. Donald Shurley, and Jeanne M. Reeves
Author Affiliations: Roland K. Roberts and Burton C. English are professors, James A. Larson is associate professor, and Rebecca L. Cochran is research associate, The University of Tennessee, Knoxville, TN. W. Robert Goodman is professor, Auburn University, Auburn, AL. Sherry Larkin is assistant professor, University of Florida, Gainesville, FL. Michele Marra is professor, North Carolina State University, Raleigh, NC. Steven Martin is assistant professor, the Delta Research and Extension Center, Mississippi State University, Stoneville, MS. Donald Shurley is professor, the Rural Development Center, University of Georgia, Athens, GA. Jeanne Reeves is associate director of production economics, Cotton Incorporated, Cary, NC.
Contact:
Roland K. Roberts
Department of Agricultural Economics
The University of Tennessee
2621 Morgan Circle
Knoxville, TN 37996-4518
Phone: (865) 974-7482
Fax: (865) 974-4829
E-mail: rrobert3@utk.edu
Abstract: Probit analysis identified factors influencing adoption of precision farming technologies by Southeastern cotton farmers. Younger, more educated farmers who operated larger farms and were optimistic about the future of precision farming were most likely to adopt site-specific information technology. The probability of adopting variable rate input application technology was higher for younger farmers who operated larger farms, owned more of the land they farmed, were more informed about the costs and benefits of precision farming, and were optimistic about the future of precision farming. Computer use was not important possibly because custom hiring shifts the burden of computer use to agribusiness firms.
Key Words: cotton, grid soil sampling, precision farming, probit, sample selection, site-specific information, technology adoption, variable rate application
JEL Classifications: D21, Q12, Q16
R. Wes Harrison and Everald Mclennon
Author Affiliations: R. Wes Harrison is associate professor of Food Marketing, and Everald Mclennon is a former research assistant, Department of Agricultural Economics and Agribusiness, Louisiana State University Agricultural Center, Baton Rouge, LA.
Contact:
R. Wes Harrison
101 Agricultural Administration Bldg., LSU
Dept. of Agricultural Economics & Agribusiness
Baton Rouge, LA 70803-5604
Phone: (225) 578-2727
Fax: (225) 578-2716
E-mail: wharrison@agctr.lsu.edu
Abstract: Conjoint analysis is used to measure the preferences of United States consumers for labeling of biotech foods. The study found that consumers in the sample support mandatory labeling of biotech foods. This suggests U.S. consumers would support revisions to the present voluntary labeling policy of the U.S. Food and Drug Administration and the U.S. Department of Agriculture. Results also showed the preferred labeling format is a text disclosure that describes the benefits of biotechnology in combination with a biotech logo.
Key Words: agricultural biotechnology, labeling, conjoint analysis
JEL Classifications: Q18,Q13
R. Keith Avent, Clement E. Ward, and David L. Lalman
Author Affiliations: R. Keith Avent is former graduate research assistant, Department of Agricultural Economics, Oklahoma State University, Stillwater, OK. Clement E. Ward is professor and extension economist, Department of Agricultural Economics, Oklahoma State University, Stillwater, OK. David L. Lalman is associate professor and extension animal scientist, Department of Animal Sciences, Oklahoma State University, Stillwater, OK.
Contact:
Clement E. Ward
Department of Agricultural Economics
Oklahoma State University
513 Agriculture Hall
Stillwater, OK 74078
Phone: (405) 744-9821
Fax: (405) 744-9835
E-mail: ceward@okstate.edu
Abstract: Preconditioning calf programs, while not new, are becoming more prevalent. They provide benefits to cow-calf producers while adding value for feeder cattle buyers. However, questions remain regarding the economic costs and returns of such programs. A model was estimated with data from three, consecutive-day sales to determine the value buyers place on preconditioning programs and related feeder cattle traits. Price premiums in this study, while evident, appear insufficient by themselves to cover the marginal costs of preconditioning.
Key words: animal health, feeder cattle, hedonic model, marketing, preconditioning, prices, value-added
JEL Classifications: Q13, Q12, Q11, C23
Olga I. Murova, Michael A. Trueblood, and Keith H. Coble
Author Affiliations: Olga I. Murova is research specialist, Department of Agricultural Economics and Agribusiness, University of Arkansas, Fayetteville, AR. Michael A. Trueblood is economist, Economic Research Service, U.S. Department of Agriculture, Washington, D.C. Keith H. Coble is associate professor, Department of Agricultural Economics, Mississippi State University, Mississippi State, MS.
Contact:
Olga I. Murova
Department of Agricultural
Economics and Agribusiness
217 Agriculture Building
University of Arkansas
Fayetteville, AR 72703
Phone: (479) 575-2321
Fax: (479) 757-5306
E-mail: omurova@uark.edu
Abstract: This study examines technical efficiency patterns in Ukraine's crop sector for 1991-1996. The economic and policy environment in Ukraine has changed since reform began in 1991. Many policy changes have exerted offsetting economic pressures on efficiency. Enterprise privatization and liberalization of prices and trade put upward pressure on technical efficiency, while start-stop land privatization efforts, unpredictable government intervention, and slow developments in credit and labor markets put downward pressure on efficiency. This study finds that technical efficiency appears to have improved slightly over the 1991-1996 period, suggesting that the positive forces had more impact.
Key Words: data envelopment analysis, enterprise privatization, inefficiency, price liberalization, productivity, stochastic frontier analysis, technical efficiency
JEL Classifications: D29, E23, E66, O38, P32
Roland K. Roberts, Jeremy T. Walters, James A. Larson, Burton C. English,
and Donald D. Howard
Author Affiliations: Roland K. Roberts is professor, Jeremy T. Walters is graduate research assistant, James A. Larson is associate professor, Burton C. English is professor, Department of Agricultural Economics, The University of Tennessee, Knoxville, TN. Donald D. Howard is former professor, Department of Plant and Soil Sciences, West Tennessee Experiment Station, The University of Tennessee, Jackson, TN.
Contact:
Roland K. Roberts
Department of Agricultural Economics
The University of Tennessee
2621 Morgan Circle
Knoxville, TN 37996-4518
Phone: (865) 974-7482
Fax: (865) 974-4829
E-mail: rrobert3@utk.edu
Abstract: Interactions among nitrogen (N) fertilization rate, N source, and disease severity can affect mean yield and yield variance in conservation tillage wheat production. A Just-Pope model was used to evaluate the effects of N rate, N source, and disease on the spring N-fertilization decision. Ammonium nitrate (AN) was the utility-maximizing N source regardless of risk preferences. The net-return-maximizing AN rate was 92 lb N/acre, providing $0.52/acre higher net returns than the best alternative N source (urea). If a farmer could anticipate a higher than average Take-All infection, the difference in optimal net-returns between AN and urea would increase to $35.11/acre.
Key Words: certainty equivalent, Glume-Blotch, nitrogen fertilizer, nitrogen source, risk, take-all, winter wheat
JEL Classifications: D21, D81, Q12
Ju-Chin Huang, Timothy C. Haab, and John C. Whitehead
Author Affiliations: Ju-Chin Huang is associate professor, Department of Economics, University of New Hampshire, Durham, NH. Timothy C. Haab is associate professor, Department of Agricultural, Environmental and Development Economics, Ohio State University, Columbus, OH. John C. Whitehead is associate professor, Department of Economics and Finance, University of North Carolina at Wilmington, NC.
Contact:
Ju-Chin Huang
Department of Economics
University of New Hampshire
McConnell Hall
15 College Road
Durham, NH 03824
Phone: (603) 862-3279
Fax: (603) 862-3383
E-mail: jchuang@cisunix.unh.edu
Abstract: In this paper, we attempt to value health risks by combining traditional demand impact analysis with direct elicitation of individuals' risk perceptions of food safety. We examine the impact of multiple risks of related goods on consumption of a risky good. We argue that the consumption of a risky good depends on both its absolute risk level and its relative risks to other risky goods. Seafood consumption in eastern North Carolina is studied. We elicit, in a survey, individual perceived risks as reference points to derive the economic value of reducing health risk in seafood consumption. Revealed and stated data are combined to trace out demand changes in response to absolute and relative risk reductions. Our results show that seafood consumption is affected by the perceived absolute risk and by the relative risk to poultry and that individuals react to the multiple risks in a nonlinear way--as suggested by our analytical model.
Key Words: absolute and relative risks, food borne health risk, revealed and stated data, risk substitutes
JEL Classifications: D1, D8, I12, Q21
Noro C. Rahelizatovo and Jeffrey M. Gillespie
Author Affiliations: Noro C. Rahelizatovo is former research assistant, Department of Agricultural Economics and Agribusiness, Louisiana State University, Baton Rouge, LA. Jeffrey M. Gillespie is associate professor, Department of Agricultural Economics and Agribusiness, Louisiana State University, Baton Rouge, LA.
Contact:
Jeffrey M. Gillespie
Dept. of Agricultural Economics and Agribusiness
101 Agricultural Administration Building
Louisiana State University
Baton Rouge, LA 70803
Phone: (225) 578-2759
FAX: (225) 578-2716
E-mail: jmgille@lsu.edu
Abstract: This study examines the adoption of best management practices (BMPs) in terms of the total number of practices implemented up to a certain period, employing count data analysis. Poisson and negative binomial regressions are used to examine the likely determinants of producers' decisions to adopt greater numbers of technologies, and the specific case of dairy producers' adoption of BMPs is explored. Results emphasize the significant effect of producers' awareness of the efforts to control non-point source pollution, information about BMPs, farm size, producer's educational attainment and risk aversion on the number of BMPs adopted.
Key Words: best management practices (BMP), count data analysis, dairy industry, negative binomial regression, Poisson regression
JEL Classifications: Q12, Q16
Abedullah and Sushil Pandey
Author Affiliations: Abedullah is scientific project assistant, Institute fur Agrarokonomie und Verfahrenstechnik, University of Rostock, Justus-von-Liebig-Weg 7, Germany. Sushil Pandey is agricultural economist and deputy head, Social Sciences Division (SSD), International Rice Research Institute (IRRI), Manila, Philippines.
Contact:
Sushil Pandey
Agricultural Economist and Deputy Head
Social Sciences Division
International Rice Research Institute (IRRI)
DAPO Box 7777
Metro Manila
Philippines
Phone: 63 2 8450563 ext 2774
Fax: 63 2 891 1292
Email: sushil.pandey@cgiar.org
Abstract: Investing in a new perennial crop variety involves an irreversible commitment of capital and generates an uncertain return stream. As a result, the decision to adopt a new variety includes a significant real option value. Waiting for returns to rise above this real option causes a delay in adoption due to economic hysteresis. This study tests for hysteresis in wine grape-variety adoption using a sample of district-level data from the state of California. The empirical results show a significant hysteretic effect in wine grape investment, which may be reduced by activities that smooth earnings over time.
Key Words: expected utility, fertilizer, heteroscedastic production function, Just and Pope and Antle's technique, rainfed, risk aversion
JEL Classifications: Q12
Henry W. Kinnucan
Author Affiliations: H. W. Kinnucan is professor, Department of Agricultural Economics and Rural Sociology, Auburn University, AL.
Contact:
Henry W. Kinnucan
Dept. of Agricultural Economics and Rural Sociology
213 Comer Hall
Auburn University
Auburn, AL 36849-4201
Phone: (334) 844-5614
Fax: (334) 844-5639
E-mail:
hkinnuca@acesag.auburn.edu
Abstract: A recent study by Miljkovic, Marsh, and Brester estimates that reductions in the Japanese tariff-rate quota between 1993 and 2001 increased U.S. beef prices by $1.03 per cwt and yen depreciation between 1995 and 1998 reduced U.S. hog prices by $0.99 per cwt. Relaxing the assumption that U.S. beef and hog supplies are fixed cuts the total elasticities underlying these estimates by 50% or more. The upshot is that shocks in the Japanese market have little effect on U.S. beef and pork prices. Hence, producers may be better off focusing on domestic issues such as dietary concerns over red meat consumption.
Key Words: elasticities, exchange rates, import demand, income, supply response, tariffs
JEL Classifications: Q17, F14, C32
Dragan Miljkovic, John M. Marsh, and Gary W. Brester
Author Affiliations: Dragan Miljkovic is associate professor, Department of Agriculture, Southwest Missouri State University, Springfield, MO. John M. Marsh and Gary W. Brester are professors, Department of Agricultural Economic and Economics, Montana State University, Bozeman, MT.
Contact:
John M. Marsh
Department of Agricultural Economics and Economics
Montana State University
306 Linfield Hall, P.O. Box 172920
Bozeman, MT 59717-2920
Phone: (406) 994-5621
Fax: (406) 994-4838
E-mail: jmarsh@montana.edu
Abstract: In responding to a comment article, we concur that quantifying U.S. livestock price response to changing Japanese meat import demand requires nonzero supply elasticities beyond one quarter. However, rigidities in market trade and empirical tests justify inclusion of exchange rates in the short-run analysis. Producer welfare asymptotically approaches zero for increasing supply elasticities in the long run, but short-run transitions in producer surplus are meaningful to producers.
Key Words: exchange rates, import demand, supply response
JEL Classifications: Q17, F14, C32
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