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.