2022

May, 2022

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.

May, 2022

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.

May, 2022

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.

May, 2022

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.

May, 2022

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.

May, 2022

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.

May, 2022

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.

May, 2022

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.

January, 2022

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.

January, 2022

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.

January, 2022

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.

January, 2022

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.

January, 2022

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.

January, 2022

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.

January, 2022

By: Baek, Jungho ; Xu, Jiangqin
Up until now, relatively little attention has been given to the asymmetric effects of exchange rates on global trade flows of forest products. Thus, the primary thrust of this article is to probe the asymmetric influences exchange rate fluctuations have on bilateral trade flows of various forest products between the United States and Canada. We use the nonlinear autoregressive distributed lag (NARDL) method and discover strong evidence that the ups and downs of exchange rates appear to have asymmetric impacts on U.S. exports and imports of forest products in the long run. However, there is little evidence that the exchange rate asymmetry is present in the short run.

January, 2022

By: De Marchi, Elisa ; Cavaliere, Alessia ; Banterle, Alessandro
European consumers have generally been reluctant to accept genetically modified food. Novel breeding technologies that avoid transgenic manipulations seem to be more positively perceived by consumers, opening new horizons for the market. This paper investigates the motivations of consumer acceptance for cisgenic products. By comparing four information treatments (i.e., basic information, naturalness, health, and environment), we demonstrate that information on health-related benefits and especially on environmental benefits contributes to generate a positive communication landscape around cisgenic food. The results provide insights for the development of food policies and communication strategies aimed at increasing consumer acceptance for edited food.

January, 2022

By: Sabala, Ethan ; Devadoss, Stephen
Using a theoretical and empirical spatial equilibrium model, we examine the effect of the Chinese 25% tariff on the world sorghum market under various market structures. The effects of the tariff are less pronounced under bilateral monopoly than under perfect competition. Specifically, the reallocations of trade caused by the tariff are lessened as the United States uses its market power to mitigate adverse effects. This reduces the tariff's impacts on prices, production, consumption, and welfare for most countries. However, the calibration revealed that the United States and China do not exert significant market power on the world sorghum market and that international sorghum trade is more accurately represented by perfect competition.

January, 2022

By: Varshney, Deepak ; Joshi, Pramod Kumar ; Roy, Devesh ; Kumar, Anjani
Using a survey of 1,500 farmers, we identify farmer-level constraints to adoption of modern cultivars in Rajasthan, India, and decompose the overall elasticity into the elasticities of adoption probability and use intensity. We find that access to credit and intensity of extension services received drive adoption of modern cultivars, but both factors are more important for determining adoption probability than for determining use intensity. Moreover, the study assess the roles that key traits of individual cultivars play in their adoption. Varietal traits significant for the adoption of modern cultivars vary by crop and geography. However, the main driver for continuing old cultivars across crops is taste attributes.

January, 2022

By: Ren, Yongwang ; Lambert, Dayton M. ; Clark, Christopher D. ; Boyer, Christopher N. ; Griffith, Andrew P.
Cattle producers in the Fescue Belt predominantly rely on cool-season grass (CSG) pastures. Supplementing CSGs with warm-season grasses (WSG) can provide economic and environmental benefits. We elicit Tennessee cattle producer willingness-to-adopt WSG using data from a hypothetical choice experiment that offered a monetary incentive to establish WSG pasture. A novel double-hurdle regression with Student-t errors was estimated using a Bayesian Hamiltonian Monte Carlo procedure. About 66% of participants were willing to convert 14%-21% of their pasture acres to WSG depending on the incentive amount. A $95/acre incentive is estimated to convert 7,631 acres to WSG, costing $0.77 million.

January, 2022

By: MacLachlan, Matthew J. ; Boussios, David ; Hagerman, Amy D.
Export restrictions often exacerbate the direct production losses and control costs from infectious animal disease outbreaks by reducing the pool of consumers of animal products. However, the uncertain timing and the varying extent of the trade restrictions make it challenging to measure these indirect costs of disease outbreaks. We examine two outbreaks of highly pathogenic avian influenza (2004 and 2014Ð2015) that saw few broiler chickens lost but significant trade disruptions from embargoes. We evaluate the timing and estimate the magnitude of the economic shocks from these embargoes, finding brief but considerable trade declines and distinct economic responses to each outbreak.