Volume 47, Issue 1, January 2022

January, 2022

Double or Nothing: Impacts of Warming on Crop Quantity, Quality, and Revenue

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.
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January, 2022

Food Safety Events versus Media: Nonlinear Effects of Egg Recalls on U.S. Egg Prices

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.
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January, 2022

Supply Response in Dairy Farming: Evidence from Monthly, Animal-Level Data

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.
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January, 2022

Occupational Injury and Workdays Lost in Northern Ireland’s Farming Sector

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.
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January, 2022

Technology and Managerial Gaps in Contract Farming: The Case of Specialty Crop Production

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.
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January, 2022

Estimating Structural Change in the Japanese Beef Import Market in the Wake of BSE: A Smooth Transition Approach

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.
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January, 2022

Exchange Rate Effects on the U.S.ÐCanada Forest Product Trade: Are the Effects Asymmetric?

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.
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January, 2022

Identifying Motivations for Acceptance of Cisgenic Food: Results from a Randomized Controlled Choice Experiment

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.
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January, 2022

Analysis of Chinese Tariff Impacts on the Sorghum Market under Varying Market Structures

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.
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January, 2022

Understanding the Adoption of Modern Cultivars in India: Adoption Probability and Use Intensity

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.
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January, 2022

Adoption of Warm Season Grasses by Beef Cattle Producers in the Fescue Belt

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.
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January, 2022

Market Responses to Export Restrictions from Highly Pathogenic Avian Influenza Outbreaks

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.
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