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.
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.
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.
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.
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.
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.
By: Antonioli, Federico ; Santeramo, Fabio Gaetano
During the last 2 decades, two policy reformsÑthe Fischler Reform and the Common Market Organization ReformÑhave pushed the EU dairy sector toward economic liberalization. These changes affected the EU supply chains at different levels, altering the mechanisms of vertical price transmission. Against this backdrop, we apply error correction models to assess how price signals are passed through before and after the Italian milk supply chain reforms. In particular, we study the degree of price transmission asymmetries and conclude that market sluggishness has increased in the post-reform period, but the asymmetric dynamics are less evident. Reflections on future research needs are discussed.
By: Osseni, Abdel Fawaz ; Gohin, Alexandre ; Rault, Arnaud
Infectious animal diseases raise serious challenges for both public health and the livestock sector. We develop an original principalÐmultiple agent model for preventing these diseases that explicitly considers the heterogeneity of risk-averse farmers in addition to production externalities and ex ante informational asymmetries. Our results confirm that failing to consider farmersÕ heterogeneity generates Pareto-inefficient solutions. When using individual-based instruments, the government should cope with heterogeneity by increasing guaranteed payments and reducing average payments. However, when population-based instruments are the only available policy tools, increasing average payments is better for reducing moral hazard issues.
By: Li, Xuemei ; Saitone, Tina L. ; Sexton, Richard J.
The Women, Infants, and Children (WIC) Program has changed its food benefit issuance method from paper vouchers to electronic benefit transfer (EBT). WIC participation among the eligible population base has been declining since 2010, and EBT has been viewed as a way to arrest the decline. We utilize county-level WIC data from Oklahoma to analyze the impact of EBT on participation and food cost. We find no significant effect on program participation due to the EBT transition, but EBT reduced average participant food costs about $8.18/month, the equivalent of $56 million annually if similar savings apply nationally.
By: Shi, Ruoding ; Isengildina Massa, Olga
This study develops a comprehensive framework to measure, explain, and anticipate the costs of futures hedging. Using historical futures prices and margin requirements, we simulate hedging costs for corn and soybeans over 2004Ð2018. Empirical distributions derived from the simulation results provide unconditional estimates of the costs of hedging as well as the probability of hedging failure. Conditional estimates assess the impact of margin requirements, price volatility, and price changes as well as seasonal patterns using quantile regressions. Our findings demonstrate that price volatility is a main driver of the costs of hedging and can be used to anticipate future hedging costs.
By: Mitchell, Tara
This paper investigates how the production of high-quality agricultural goods in developing countries depends on various characteristics of the supply chain. The model predicts that the price difference between high- and low-quality goods has a range of values for which high-quality goods are produced when a single agent carries out both tasks but not when the tasks are performed by separate agents. The range of price values for which this occurs decreases as quality becomes more observable or as the cost of maintaining quality along the supply chain decreases. Policy recommendations are also discussed.
By: Wimmer, Stefan ; Frick, Fabian
Farm animal welfare has become increasingly important in public debates. This study uses an interval regression approach to estimate German dairy farmersÕ willingness to change selected animal welfare-related farming practices. The analysis reveals that the highest price premiums are required for implementing cowÐcalf rearing and accepting a herd size limit, while farmers provide deep cubicles and ample space without premiums. Furthermore, farms with large herds require higher compensation to provide pasture grazing than smaller farms. Overall, we find no simple relationship between farm size and the willingness to change animal welfare-related practices.
By: Ufer, Danielle ; Ortega, David L. ; Wolf, Christopher A. ; Swanson, Janice ; McKendree, Melissa
Given general social resistance to agricultural biotechnology, viability of novel applications that improve animal welfare depends on market acceptance. Using a BeckerÐDeGrootÐMarschak mechanism, we elicit willingness to pay (WTP) for pork produced using two animal welfare-improving biotechnologies. To evaluate U.S. consumer demand for these technologies, we model WTP premiums using a seemingly unrelated equations approach. Results indicate that negative attitudes toward biotechnology outweigh animal welfare benefits, though products still garner a premium due to heterogeneity in preferences. Findings support policies that balance the costs of regulatory approval with observed market acceptance and policies that accommodate animal welfare demands.
By: Azzam, Azzeddine ; Dhoubhadel, Sunil P.
The unprecedented spike in beef price spreads during the COVID-19-driven packing plant shutdowns prompted calls for investigations into Òinappropriate influenceÓ by packers in the beef market during the pandemic disruption. Using weekly data for the January 2010ÐAugust 2020 period and designating MarchÐMay 2020 as the disruption period, we estimate a structural oligopoly/oligopsony model using the generalized method of moments. We fail to reject the hypothesis of competitive pricing of beef and cattle.
By: Ramsey, A. Ford ; Tack, Jesse B. ; Balota, Maria
Using a unique data set from the multistate Peanut Variety and Quality Evaluation (PVQE) program, we quantify the economic impact of projected warming on revenue of Virginia-type peanuts, for which grade and kernel size are important determinants of price. In contrast to studies for other crops, the impacts of warmer temperatures on yield and quality are symmetric and negative, resulting in acutely depressed farm revenues. Our model predicts a roughly 11% decline in revenue under warming of 1textdegree C. Gains in yield and quality from breeding could offset revenue losses under moderate warming up to 1textdegree C but are unlikely to sustain farm revenues under more extreme changes in temperature.
By: Neill, Clinton L. ; Chen, Susan E.
Consumer reactions to food scares and subsequent recalls are dependent on both the event and on the intensity of media coverage surrounding the food scare. A lengthy or intense media response to a food scare could lead to significant reductions in demand, lower prices, and decreased short-run profit. We examine the effect of recent recalls of shell eggs on shell egg prices. Using weekly data, we analyze the effect of recall duration and media coverage on egg prices. We allow for nonlinear changes at the time of specific egg scares and account for media coverage about each scare to parse the relative impact of media on egg recalls.
By: Hutchins, Jared ; Hueth, Brent
We estimate short-run price response in dairy farming using nearly 10 million monthly animal-level observations across 2,311 Wisconsin farms in the years 2011-2014. We control for herd size and account for the age distribution of dairy cattle to identify changes in variable inputs in response to price movements. We find heterogeneous supply response across the animal life cycle to lagged movements in monthly milk and beef prices. Specifically, we find the greatest supply response in age cohorts with relatively high marginal returns from feeding, with supply elasticities as high as 0.286 for milk price and 0.713 for beef price. The results are primarily driven by significant producer response to prices in 2014, a period of volatile milk and beef prices.
By: Angioloni, Simone ; Jack, Claire ; McCarry, Ronan
This paper employs a dataset of 7,500 Northern Irish farms over the period 2015-2019 to investigate the factors that affect the number of workdays lost in agriculture, one of the most hazardous sectors in terms of occupational injuries. Results indicate that public policies aimed at improving farm safety should focus on dairy farms, young workers, family members other than the main farmer, and dangerous working practices related to machineries and vehicles. Additionally, results indicate that more than 18,000 workdays are lost every year on Northern Irish farms.
By: Mishra, Ashok K. ; Mayorga, Joaquin ; Kumar, Anjani
We use a stochastic frontier approach corrected for self-selection to separate technology and managerial gaps between the treatment and control groups of smallholders in baby corn production in India. We also assess the impact of contract farming on output prices, profitability, and resource usage. We find that technical efficiency is consistently higher among contract farmers than among independent farmers and that significant technology and managerial gaps exist between contracted and independent growers. Ultimately, contract farming intervention benefits the livelihood of smallholders, increases efficiency, and reduces environmental degradation without compromising yield.
By: Ning, Xin ; Grant, Jason H. ; Peterson, Everett B.
We assess the effect of bovine spongiform encephalopathy (BSE) on Japanese beef imports from the United States and competing suppliers. Using a source-differentiated almost ideal demand system of beef imports with endogenous smooth transition functions, we find that a nonlinear structural change has occurred in the Japanese beef import market in the wake of BSE. The BSE outbreaks led an instantaneous, persistent impact on Japanese beef imports lasting over a decade, causing a significant shift in Japanese consumer preferences for beef imports from different origins. Over half of the estimated expenditure, own-price, and cross-price elasticities have changed in the aftermath of BSE, and some have not returned to their pre-BSE levels even after the trade recovery period.