Volume 30, Issue 3, December 2005

December, 2005

The Cooperative Extension Service is an outstanding success story for education, but a model whose value is now in question. I focus on economic principles that apply to the question, "Is it time to end Extension, and if not, how can it be saved?" Six principles are identified: public goods, competitive advantage, privatization, long-run sustainability, business practices, and political economy. There is cause to support Extension, but leadership is needed to establish a common direction and to implement changes. Strategic planning would be helpful to identify these changes and to make Extension's value known to clientele and policy makers. Includes biography of Dana L. Hoag.

December, 2005

By: Ward, Clement E.; Hornung, Jonathan T.
Livestock producers primarily, but policy makers also, have an interest in market effects from meatpacking plant closings and openings. This article presents results from a study to determine price impacts from an anticipated hog slaughtering plant opening and an unexpected fed cattle slaughtering plant closing. The estimated price effects for each plant event were modeled with price difference and partial adjustment models. The plant opening resulted in higher absolute and relative hog prices in the Provincial market where the plant was located. However, adverse price impacts from the fed cattle plant closing were less evident.

December, 2005

By: Stewart, Hayden; Blisard, Noel; Jolliffe, Dean; Bhuyan, Sanjib
Health-oriented government agencies have had limited success at encouraging Americans to eat a healthful diet. One reason may be that other preferences compete with our desire to eat healthfully. We explore the effect of consumer preferences on the demand for food away from home, including frequency of eating out and choice of outlet type. Preferences for convenience and ambience are found to influence behavior. Furthermore, omitting these variables from econometric models can bias the estimated effect of preferences for a healthful diet.

December, 2005

By: Dahlgran, Roger A.
This study examines the effect of transaction frequency on profit and cash flow risk for firms that periodically purchase inputs, continuously transform inputs into outputs, and periodically sell output. Soybean-processing profit and cash flows are computed for unhedged, direct-hedged, and risk-minimizing-hedged processing with up to 52 transactions per year. Findings include: (a) higher transaction frequencies result in lower unhedged profit and cash flow risk and lower hedging effectiveness, (b) anticipatory hedging provides less risk protection than product-transformation hedging, (c) stabilizing cash flow stabilizes annual profits but the converse does not hold, and (d) hedging profits makes cash flow more variable.

December, 2005

By: Torell, L. Allen; Rimbey, Neil R.; Ramirez, Octavio A.; McCollum, Daniel W.
The relative importance of income earning potential versus consumptive values in setting ranchland prices is examined using a truncated hedonic model. The market value of New Mexico ranches is related to annual income earning potential and other ranch characteristics including ranch size, location, elevation, terrain, and the amount of deeded, public, and state trust land on the ranch. We found ranch income to be a statistically important determinant of land value, but yet a relatively small percentage of ranch value was explained by income earnings. Ranch location, scenic view, and the desirable lifestyle influenced ranch value more than ranch income.