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September, 2022

By: Khanal, Aditya R. ; Mishra, Ashok K. ; Lien, Gudbrand
Using primary survey data of onion growers in India, this study tests the relationship between and predictability of risk attitude measures on farmersÕ risk management decisions. We find that farmers with high risk aversion are more likely to adopt farm diversification strategies, good agricultural practices, government-recommended seed varieties, and preventive measures against diseases and pests than farmers with low risk aversion. The likelihood of farmers adopting good agricultural practices decreases with perceived higher risks of low-quality production, a higher risk of losing crops due to weather, and insects and pests.

September, 2022

By: Santeramo, Fabio G.
The Law of One Price is a dated but still puzzling economic concept. Studies have found that violations of the law are frequent and numerous, although scholars have pointed that these failures are likely to be due to a lack of informative datasets. In addition, for storable commodities, the possible interactions of spatial and temporal arbitrage may hide the implications of the law, invalidating the conclusions of the studies. Based on a simplified two-market model of spatiotemporal arbitrage, I review the implications of the Law of One Price and test for them with a rich dataset of weekly prices of storable commodities and information on transaction costs, trade, and storage. I conclude that most statements implied by the Law of One Price are not empirically violated.

September, 2022

By: Calil, Yuri Clements Daglia ; Ribera, Luis A. ; Anderson, David P. ; Koury Filho, William
The Nellore breed is the cornerstone of BrazilÕs successful beef production. However, Nellore seedstock pricing has yet to be understood. We performed a hedonic analysis under a hierarchical model to explore how physical, morphological, genetic, and market factors affect the prices of purebred animals sold at auctions. The findings indicated that visual scores, expected progeny differences, farm reputation, and auction type explain variations in prices. In addition, the morphological index brought higher premiums than the genetic index. The results have implications for farmers, genetic improvement programs, and policymakers as they indicate relevant factors in the seedstock cattle price formation process.

September, 2022

By: Chen, Bowen ; Dennis, Elliott J. ; Featherstone, Allen M.
Many studies have explored the determinants of technical efficiency in crop production, but fewer have examined how weather might change technical efficiency over time. We estimate weather effects on technical efficiency using data from 540 Kansas winter wheat farms from 2007/08 to 2016/17 using a panel stochastic frontier model that controls for farm-specific heterogeneity with farm fixed effects. Results show that precipitation is nonlinearly related to technical efficiency and that extreme temperature is associated with lower technical efficiency. Improving resilience to precipitation shocks is key to sustained efficient wheat production in Kansas.

September, 2022

By: Gardner, Grant ; Sampson, Gabriel S.
We examine capitalization of ethanol plant construction and capacity expansion into surrounding irrigated and non-irrigated farmland values using data on every land transaction in Kansas from 1995 to 2017 in a hedonic price model. We hypothesize that corn prices and thus land values are higher near ethanol plants. We further hypothesize that ethanol market expansion is capitalized into irrigated parcels to a greater extent than into nonirrigated parcels due to differences in water demand and precipitation. We estimate that an irrigated (nonirrigated) parcel within 50 km of an ethanol plant experiences an average price premium of 8.8% (6.3%) relative to more distant parcels.

September, 2022

By: Tian, Zheng ; Schmidt, Claudia ; Goetz, Stephan J.
We use state-level Census Household Pulse Survey data to examine the role of community food services such as food banks and pantries in reducing food insufficiency during the COVID-19 pandemic in the United States. Food insufficiency increased for all income classes during the pandemic, and especially for the lower and middle classes. We adopt a fixed effects filtered estimator to estimate the coefficients on time-invariant regressors in a fixed effects panel model. Estimation results suggest community food services contribute to mitigating food insufficiency, especially for the middle class and in the early months of the pandemic.

September, 2022

By: Devadoss, Stephen ; Ugwuanyi, Blessing ; Ridley. William
While comparative advantage factors expand agricultural trade, trade and domestic policies and gravity factors can either promote or hinder commodity trade. We use a theoretical multicountry trade model to analyze how various factors impact agricultural trade. Following previous literature, we model cross-country productivity differences using a probabilistic distribution. We then empirically implement the theoretical model to quantify the effects of various determinants of agricultural trade. Production-inhibiting policies and tariffs hinder bilateral trade, while domestic institutional quality, support programs, and land endowments expand bilateral trade.

September, 2022

By: Lee, Juhee ; Hendricks, Nathan P.
Understanding the interaction between groundwater salinity and irrigation decision making has important implications for groundwater management. Econometrics models were estimated using observed farmer behavior in response to different groundwater salinity levels in a region of Kansas. Estimation results demonstrate that farmers in the face of groundwater salinity change their irrigation decisions on irrigated acreage (i.e., extensive margin), crop choice (i.e., indirect intensive margin), and water application depth (i.e., direct intensive margin). The empirical results indicate an overall decrease in water use due to higher salinity, primarily through a decrease at the extensive margin.

September, 2022

By: Park, Eunchun ; Harri, Ardian ; Coble, Keith H.
Crop yield densities are often estimated at the county level. However, county-level yield data providers often omit county records due to low participation or other reasons. The data omission can undermine insurance premiumsÕ credibility and thereby lead to restrictions on the provision of area insurance products in specific locations. To address this problem, we propose a novel Bayesian spatial interpolation method to estimate crop yield densities for counties with missing data. Empirical results indicate that our approach is consistently superior to the benchmark approaches. Importantly, our approach offers noticeable estimation accuracy even at a significant level of data omission.

September, 2022

By: Hovhannisyan, Vardges ; Bastian, Chris ; Devadoss, Stephen
This study adopts a novel approach to assessing addiction to cigarettes, small and large cigars, e-cigarettes, smokeless tobacco, and loose smoking tobacco by decomposing tobacco demand into supernumerary and precommitted quantities. Supernumerary tobacco consumption represents a demand component that varies with prices and smoker income, while precommitted consumption is immune to changes in economic circumstances and thus may be reflective of addiction. By empirically estimating the supernumerary and precommitted demand components, we shed light on the severity of tobacco addiction and smoker price and income responsiveness in the United States, which may prove vital in refining various tobacco control policies.

September, 2022

Between 2004 and 2012, the United States enacted bilateral trade agreements with Chile, Peru, Panama, and Colombia. Using bilateral trade panel datasets of agri-food commodities, we estimate a structural gravity model to analyze the trade creation and trade diversion effects of these agreements. The agreements resulted in substantial increases in intramember trade for aggregate agri-food trade among member countries, ranging from 53.73% for the Chilean agreement to 354.03% for the Peruvian agreement. Substantial heterogeneity exists when the aggregate commodity is disaggregated and when US exports to and imports from the four Latin American countries are considered.

September, 2022

By: Burton, Kati ; Maas, Alexander ; Lee, Katherine
This study quantifies the magnitude and spatial-temporal persistence of home value losses associated with a chemical spill in the Elk River using difference-in-difference, spatial regression techniques. Results suggest homes within 3 miles of the spill experienced a value loss, with the largest effect on homes within one mile of the spill. Homes beyond 3 miles experienced no significant effect. The loss in value affected prices for years after the contamination was remediated. Homes within the water utility service area experienced a significant increase in value following the spill, which may reflect public value of water quality monitoring by a utility.

May, 2022

By: Adam, Baba ; Abdulai, Awudu
We employ farm household data to investigate the heterogeneous treatment effects of conservation agriculture (CA) practices on farm performance and inorganic fertilizer use in Ghana. We use the marginal treatment effect (MTE) framework to account for treatment effect heterogeneity in both observed and unobserved characteristics and to analyze policy-relevant treatment effects (PRTE). Farmers with a high propensity to adopt CA reduce nitrogen usage from inorganic sources and experience significant increases in maize yields and farm net returns compared to those less likely to adopt. PRTEs reveal that increasing training sessions and providing incentives to reduce implementation costs are crucial for promoting conservation agriculture.

May, 2022

By: Kuethe, Todd H. ; Bora, Siddhartha ; Katchova, Ani
The USDA Economic Research Service's (ERS) farm income forecasts play an important role in decision making and planning across the agricultural sector, yet recent studies suggest that their initial farm income forecasts are biased. This study examines the degree to which the initial forecast of net cash income and its components can be improved using information from USDA 10-year agricultural baseline (AB) projections. We apply several forecast evaluation tools to a unique set of ERS forecasts, AB projections, and official estimates from 1997 through 2019. Our forecast-encompassing tests show that the AB projection provides important information for predicting livestock receipts, direct government payments, farm-related income, and cash expenses. Our findings are potentially useful for both ERS forecasters and a variety of farm income forecast users.

May, 2022

By: Gil-Alana, Luis A. ; Font de Villanueva, Cecilia
This paper deals with the analysis of world commodity prices by examining 15 categories of commodity prices using fractional integration and including thus fractional points. We use data corresponding to the 1960Ð2018 period obtained from the World Bank, and the results indicate high degrees of persistence in the majority of the series, especially when using parametric methods. However, mean reversion is obtained in many cases when using semiparametric approaches. The possibility of structural breaks is also considered, and our results confirm the high degree of persistence in the data, which seems to have increased across time.

May, 2022

By: Schmiess, Jacob S. ; Lusk, Jayson L.
Despite many consumers' intuitions to the contrary, improvements in farm animal welfare can conflict with environmental objectives, particularly regarding greater intensification of production systems. Using a discrete choice experiment, this study determines how consumers make trade-offs between increased animal welfare and lower levels of environmental impact. We assess the sensitivity of results by varying how attributes were presented and what information was available to respondents. Overall, results suggest consumers are willing to trade environment for animal welfare, but the extent of this trade-off strongly depends on how the information is conveyed to consumers.

May, 2022

By: Zapata, Samuel D. ; Peguero, Felipe ; SŽtamou, Mamoudou ; Alabi, Olufemi
Citrus greening (HLB) is an incurable bacterial disease severely affecting most citrus production regions. Evaluating the economic feasibility of control practices is challenging due to the complex intertemporal interactions among the pathogen, the vector, and the host. We propose a stochastic evaluation framework to systematically analyze the long-term economic performance of a broad range of management strategies. Different control approaches are evaluated in a hypothetical application in Texas. Results highlight the detrimental effects of the disease and the importance of developing cost-effective control options. A substantial loss in value is expected regardless of the intervention actions implemented.

May, 2022

By: Yonezawa, Koichi ; G—mez, Miguel I. ; McLaughlin, Edward W.
State and federal minimum wage hikes are likely to impact the retail industry, including grocery stores, which employs a large number of less-well-compensated part-time workers. Despite its relevance, it is not clear whether minimum wage increases affect full- and part-time retail employees differently. We use state-level monthly data from the Current Population Survey (CPS) to show that minimum wage hikes lead to rising part-time wages but not to declining part-time employment. Instead, retailers reduce their full-time employment and the hours worked by full-time workers in order to stay within a labor budget and continue serving their customers.