Volume 33, Issue 3, December 2008

December, 2008

Contribution of Wheat Diversity to Total Factor Productivity in China

By: Jin, Songqing; Meng, Erika C.H.; Hu, Ruifa; Rozelle, Scott; Huang, Jikun
The impact of wheat diversity on the productivity of wheat in China is examined using total factor productivity (TFP) and an instrumental variable approach. TFP in seven key wheat-producing provinces in China shows significant, though variable, growth for all provinces during the period 1982-1995. Analysis of the causes of TFP growth tests alternative taxonomies of wheat diversity (named varieties and morphological groups) and three measures of diversity. The analysis shows significant effects of diversity on TFP with results consistent across taxonomies and measures of diversity. Further decomposition of the estimation results confirms the relative magnitude of impact of wheat diversity on TFP growth.
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December, 2008

Adoption and Abandonment of Precision Soil Sampling in Cotton Production

By: Walton, Jonathan C.; Lambert, Dayton M.; Roberts, Roland K.; Larson, James A.; English, Burton C.; Larkin, Sherry L.; Martin, Steven W.; Marra, Michele C.; Paxton, Kenneth W.; Reeves, Jeanne M.
Adoption of precision agriculture technology has arrived considerable attention, but abandonment has received little. This paper identified factors motivating adoption and abandonment of precision soils sampling in cotton. Younger producers who farmed more cotton area, owned more of their cropland, planted more non-cotton area, or used a computer were more likely to adopt precision soil sampling. Those with more cotton area or who owned livestock were more likely to abandon, while those who used precision soil sampling longer, or used variable-rate fertilizer application were less likely to abandon precision soil sampling.
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December, 2008

What to Choose? The Value of Label Claims to Fresh Produce Consumers

By: Bond, Craig A.; McFadden, Dawn Thilmany; Bond, Jennifer Keeling
We examine consumer response to label information using a hypothetical choice experiment on red leaf lettuce attribute bundles. Using survey responses, several mixed logit models with random parameters and varying correlation assumptions are estimated that provide estimated of marginal utilities ( and marginal values) of various attributes related to general health claims, specific nutrition and health claims, certification logos, and certified organic claims (relative to the conventional reference group) for this fresh produce product. We find that consumers distinguish between labeling claims, and that attribute bundling effects are present, suggesting the results from main effects (linear) models may be misleading. Furthermore, the results imply that consumers may value both privately and publicly appropriable benefits of alternative technologies, such as organic production.
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December, 2008

Trait Stacking, Licensing, and Seed Firm Acquisitions on Genetically Modified Grains: A Strategic Analysis

By: Wilson, William W.; Huso, Scott R.
Commercialization of genetically modified (GM) traits leads to interesting strategic questions for agbiotechnology and seed firms. The purpose of the study is to evaluate equilibrium strategies of agbiotechnology and seed firms regarding commercialization of GM traits. Two game theory models were developed to examine equilibrium strategies. In the first, both agbiotechnology firms have commercialization strategies of licensing or not. In the second, the agbiotechnology firm also has the strategic option to purchase a seed form as a commercialization strategy. Results indicate that the equilibrium strategy would be for each of the agbiotechnology firms to license their traits, and the seed firm would release a stacked trait. However, order of play matters and impacts the equilibrium. Finally, in the second game, the equilibrium is for the agbiotechnology company to purchase a seed firm. Each of these decisions is highly strategic and reflects the current strategic challenges in the agbiotechnology industry.
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December, 2008

Implicit Value of Retail Beef Product Attributes

By: Ward, Clement E.; Lusk, Jayson L.; Dutton, Jennifer M.
To identify the value consumers place on observable characteristics of fresh beef products, primary data were collected on over 1,350 packages of beef from 66 randomly selected grocery stores located in three metropolitan areas--Oklahoma City and Tulsa, Oklahoma, and Denver, Colorado. Estimated linear and log-linear hedonic models reveal ground beef prices were significantly influenced by store location (i.e., metropolitan area) and store type, fat content, package size and type, expiration date, brand category, and special labels. Factors influencing steak prices included store location, product type, quality grade, package size and type, brand category, and special labels.
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December, 2008

Carcass Quality and Genetic Selection in the Beef Industry

By: Vanek, Joseph K.; Watts, Myles J.; Brester, Gary W.
A lack of high-quality beef has been cited as one of the primary factors for the 50% decline in beef demand from the mid-1970s to the last 1990s. Cattle producers argue that appropriate price premiums are not sufficient to encourage the production of high-quality cattle. Although some improvement in carcass quality can be made by the cattle feeding and processing sectors, substantial improvements in quality must include genetic progress. A hedonic analysis of four major U.S. beef seedstock producers indicates that bull purchasers place relatively high values on a bull’s ability to produce progeny with improved carcass-quality traits.
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December, 2008

The Role of Price Risk Management in Mitigating Fed Cattle Profit Exposure

By: Belasco, Eric J.
This study identifies the amount and origin of risk in cattle feedlot operations through the use of simulation techniques. Ex ante profit risks are evaluated under scenarios with varying levels of price protection through the use of forward pricing. An empirical probability density function is simulated to capture the mean and variability in prices and cattle production yields within a specified profit under difference assumptions regarding the relative importance of production risk and price risk in overall cattle feeding profits.
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December, 2008

Spatio-temporal Risk and Severity Analysis of Soybean Rust in the United States

By: Bekkerman, Anton; Goodwin, Barry K.; Piggott, Nicholas E.
Soybean rust is a highly mobile infectious disease and can be transmitted across short and long distances. Soybean rust is estimated to cause yield losses that can range between 1%-25%. An analysis of spatio-temporal infection risks within the United States is performed through the use of a unique data set. Observations from over 35,000 field-level inspections between 2005 and 2007 are used to conduct a county-level analysis. Statistical inferences are derived by employing zero-inflated Poisson and negative binomial models. In addition, the model is adjusted to account for potential endogeneity between inspections and soybean rust finds. Past soybean rust finds and inspections in the county and in the surrounding counties, weather and overwintering conditions, and plant maturity groups and planting dates are all found to be significant factors determining soybean rust. These results are then used to accordingly price annual insurance contracts or indemnification programs that cover soybean rust damages.
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December, 2008

Ethics and Agriculture: A Teaching Perspective

By: Diebel, Penelope L.
Ethics and agriculture is a complex debate, but one in which agricultural economics students must be prepared to participate. There are many links between economics and ethic or moral philosophy. Classroom teaching tends to focus on discussion of issues involving behavioral ethics and disregards the teaching of philosophical ethics and its application in agricultural economics. A discussion is presented regarding the ethical context we have inherited in agricultural economics. I offer some broad moral philosophy concepts and an argument for providing students with tools to develop a philosophical ethics perspective of agricultural economics.
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December, 2008

End Materials

This section includes: Abstracts of Invited and Selected Papers and Organized Symposia, WAEA Annual Meetings, Big Sky, Montana, June 25-27, 2008; JARE Editors' Report Presented at WAEA Annual Meeting, Big Sky, Montana, June 25, 2008; JARE Reviewers, October 1, 2007-December 1, 2008; WAEA 2007 Award Winners; Waea Past Presidents 1927-2008; Past Editors, Western Journal of Agricultural Economics, 1977-91, Journal of Agricultural and Resource Economics, 1992-2006
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December, 2008

Influence of Climate Variability on the Market Price of Water in the Gila-San Francisco Basin

By: Pullen, Jennifer L.; Colby, Bonnie G.
Emerging water markets in the western United States have slowly developed as usage patterns have changed over time. This article develops an econometric model for the Gila-San Francisco Basin. Results indicate the market price of water has risen in response to drought and market conditions. Analysis shows a statistically significant relationship between the price and quantity of water transferred, year the transaction occurred, location where the transaction occurred, new use of the water right, and whether the transaction occurred during a drought year. Using the Standard Precipitation Index, we find negotiated prices are higher during dry years.
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