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January, 2023

An Expected Value of Sample Information (EVSI) Approach for Estimating the Payoff from a Variable Rate Technology

By: Queiroz, Pedro W. V.; Perrin, Richard K.; Fulginiti, Lilyan E.; Bullock, David S.
This paper examines the expected payoff to variable rate technology for fertilizer application in terms of a Bayesian expectation of the value of sample information (EVSI). The optimal variable rate for each cell in a field is conditioned on a signal in the form of the electrical conductivity of soil at that cell. Using corn response to nitrogen data from ten on-farm field-level experiments, we calculate the expected payoff from variable rate technology versus a uniform rate applied to all cells to be about $1.81/acre.
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January, 2023

Adopting African Indigenous Vegetables: A Dynamic Panel Analysis of Smallholders in Kenya

By: Vivas, Jonathan; Kim, Man-Keun; Takagi, Chifumi; Kirimi, Lilian
African indigenous vegetables (AIVs) have remained underutilized despite their potential benefits in sub-Saharan Africa. This study identifies determinants of AIV adoption among Kenyan smallholder farmers and explores whether farmers' decisions to adopt exhibit a true state dependence. Using four waves of data and a dynamic probit model, we identify the existence of dynamics in farmers' decisions, implying that farmers adjust their decisions using knowledge gained in previous periods. In addition, a gender disparity exists: Female-headed households are more likely to adopt AIVs. This is not due to differences in household characteristics but rather to gender differences, which may be associated with Kenyan culture.
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January, 2023

Subsidy Rate Changes on Livestock Risk Protection for Feeder Cattle

By: Boyer, Christopher N.; Griffith, Andrew P.
We determine the impact the 2020 Livestock Risk Protection (LRP) subsidy rate structure has on the probability of LRP having a higher price than the actual cash price. Monthly logit models were estimated to determine these probabilities with the previous and new subsidy rate. The preferred coverage lengths and levels vary across months as does LRPÕs effectiveness in managing price risk. The new subsidy structure increases LRPÕs effectiveness as a risk management tool in some months. Results show the LRP contract that provides the best protection by sell month and the impact of the new subsidy rates.
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January, 2023

Spatial Equilibrium Effects of Agricultural Commodity Price Changes on Great Plains Agriculture, 1997Ð2017

By: Barkley, Andrew; Seete, Paul; Tack, Jesse
The effects of changes in agricultural commodity prices on net farm income, land values, and the number of farm operators are quantified using a spatial equilibrium model for 798 Great Plains counties during 1997Ð2017, a period of historically large price changes. The empirical model identifies major features of the agricultural sector, including distance to market and agricultural commodity price movements. Regression results show that crop prices had significant impacts on agricultural outcomes. Volatility in net farm income and land values was greater in locations farthest from market centers for corn and soybeans, but closer to the defined sorghum market center.
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January, 2023

US Household Purchases of Dairy Milk and Plant-Based Milk Alternatives

By: Stewart, Hayden; Dong, Diansheng
US household purchases of fluid dairy milk and plant-based milk alternatives are investigated using household-level data from the 2018 National Consumer Panel. About 58.5% of all households bought only dairy milk and 4.4% bought only plant-based products over the course of that year. Another 37.1% switched between the two types of products, buying dairy milk on most shopping occasions and plant-based products on a smaller number of occasions. Dairy milk will not likely lose out to plant-based products anytime soon given these purchase patterns; rather, the two products may coexist, with plant-based options playing a minor role.
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January, 2023

Price and Welfare Effects of the Food Safety Modernization Act Produce Safety Rule

By: Ferrier, Peyton M.; Zhen, Chen; Bovay, John
We estimate the cost of compliance with the US Food Safety Modernization Act (FSMA) Produce Safety Rule by commodity and own- and cross-prices elasticities of demand for 18 fruits and 20 vegetables. These are used as inputs in an equilibrium displacement model that simulates the price and welfare effects of the rule. We find that consumer and farm prices increase by 0.55% and 1.69% for fruits and 0.15% and 0.59% for vegetables. Costs associated with implementation are estimated to reduce producer welfare by 0.63% for fruits and 0.51% for vegetables (as a share of revenue). If the rule's provisions were enacted unilaterally by growers of individual commodities, producer welfare losses would be 0.93% of total revenue for fruits and 0.31% for vegetables.
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January, 2023

Consumer Preferences for State-Sponsored Designations: The Case of the Missouri Grown Label

By: Grashuis, Jasper; Su, Ye
There is much empirical evidence of consumer preferences for food products with state-sponsored designations. However, the behavioral characteristics that form the foundation of such consumer preferences are unknown. Using a choice experiment, we explain preferences for the Missouri Grown state-sponsored designation from the perspective of consumer ethnocentrism. According to the results, most consumers have a significant willingness-to-pay for the Missouri Grown label. However, the price premium is substantially higher for consumers who think that products from Missouri conform with in-group preferences. These novel findings imply a strong motivation for producers and legislators to expand adoption and support of state-sponsored programs.
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January, 2023

Survival Analysis of New Zealand Fresh Fruit and Vegetable Imports

By: Luo, Yangyuyu; Scrimgeour, Frank; Bano, Sayeeda
This paper explores New Zealand fresh fruit and vegetables import survival from 1989 to 2019 and identifies the key determinants. We find that around 58% of trade relationships survived only 1 year. Significant factors influencing the hazard rate of import survival are the number of entries, distance, per capita gross domestic product, production, import prices, and the number of import origins and export destinations. However, the estimated impacts of the phytosanitary treatments covered in New Zealand Import Health Standards are mixed and associated with exporting countriesÕ level of development.
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January, 2023

Are Intensive Farms More Emission Efficient? Evidence From German Dairy Farms

By: Stetter, Christian; Wimmer, Stefan; Sauer, Johannes
This study compares the greenhouse gas (GHG) efficiency of intensive and extensive dairy farms and determines their GHG mitigation potential. We combine the concept of eco-efficiency with latent class stochastic frontier analysis and the estimation of a stochastic metafrontier. In the case of Bavaria, Germany, we find that intensive dairy farms convert GHG emissions on average more efficiently into farm economic output than their extensive counterparts. Extensive farms could, on average, reduce GHG emissions by 225 t CO$_2$ equivalent per year while intensive farms could reduce emissions by 130 t CO$_2$ equivalent without reducing their economic output.
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January, 2023

Employer-Sponsored Health Insurance Coverage, Government Payments, and Labor Allocation: The Case of US Farm-Operator Households

By: Miller, Cristina D. M.; Mishra, Ashok K.; Villacis, Alexis H.
This study investigates the impact of health insurance coverage and participation in government counter-cyclical, conservation, and risk management programs on off-farm labor allocation decisions among US farm-operator households. Using household-level data, this study employs a simultaneous probit estimation method to estimate the empirical model. Results show that US farm-operator households with employer-sponsored health insurance coverage are also 14% more likely to work off farm. Second, farm familiesÕ off-farm work is associated with a 4% increase in health insurance coverage. Counter-cyclical, conservation, risk management payments have a negative and significant effect on US farm-operator householdsÕ off-farm work decisions.
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January, 2023

Productivity-Based Indicators for Nitrogen Use Efficiency

By: Ancev, Tihomir; Bostian, Moriah; Barnhart, Brad
Nitrogen use efficiency (NUE) is often used to evaluate an agricultural system's relative ability to process nitrogen (N) inputs. However, no universal indicator has simultaneously considered both economic and environmental objectives. We develop Luenberger indicators of NUE that incorporate both economic and environmental objectives to examine spatio-temporal changes in NUE, which we apply to the Upper Mississippi River Basin (UMRB) for the period 2002--2012. We find considerable spatial-temporal variation in NUE, which could be used to inform future agri-environmental policy and conservation targeting decisions in the UMRB. Using this approach could lead to more cost-effective targeting of areas for N reduction in the UMRB.
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January, 2023

Comparative Profitability of Irrigated Cropping Activities for Temporary Water Transfers under Risk Aversion

By: Mooney, Daniel F.; Kelley, Timothy H.
Temporary water transfers are attractive to farmers because they provide revenue, but they also reduce water available for crop production and may affect economic risk. We compare the expected profitability, risk exposure, and water savings (i.e., conserved consumptive use) of irrigated cropping activities for temporary transfers in Colorado. Crop switching, modified harvesting, rotational fallow, and limited irrigation significantly affect gross margins, risk premiums, and consumptive use. Excluding risk from the economic analysis underestimates breakeven water transfer values by 4%Ð36%. Compensating farmers for risks they take and forgone returns from water they transfer will increase willingness to participate in temporary transfers.
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September, 2022

Effects of Risk Attitude and Risk Perceptions on Risk Management Decisions: Evidence from Farmers in an Emerging Economy

By: Khanal, Aditya R. ; Mishra, Ashok K. ; Lien, Gudbrand
Using primary survey data of onion growers in India, this study tests the relationship between and predictability of risk attitude measures on farmersÕ risk management decisions. We find that farmers with high risk aversion are more likely to adopt farm diversification strategies, good agricultural practices, government-recommended seed varieties, and preventive measures against diseases and pests than farmers with low risk aversion. The likelihood of farmers adopting good agricultural practices decreases with perceived higher risks of low-quality production, a higher risk of losing crops due to weather, and insects and pests.
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September, 2022

Price Dynamics, the Law of One Price, and Quantile Regressions

By: Santeramo, Fabio G.
The Law of One Price is a dated but still puzzling economic concept. Studies have found that violations of the law are frequent and numerous, although scholars have pointed that these failures are likely to be due to a lack of informative datasets. In addition, for storable commodities, the possible interactions of spatial and temporal arbitrage may hide the implications of the law, invalidating the conclusions of the studies. Based on a simplified two-market model of spatiotemporal arbitrage, I review the implications of the Law of One Price and test for them with a rich dataset of weekly prices of storable commodities and information on transaction costs, trade, and storage. I conclude that most statements implied by the Law of One Price are not empirically violated.
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September, 2022

Purebred Nellore Prices in Brazil: Morphological, Genetic, Physical, and Market Factors in Auctions

By: Calil, Yuri Clements Daglia ; Ribera, Luis A. ; Anderson, David P. ; Koury Filho, William
The Nellore breed is the cornerstone of BrazilÕs successful beef production. However, Nellore seedstock pricing has yet to be understood. We performed a hedonic analysis under a hierarchical model to explore how physical, morphological, genetic, and market factors affect the prices of purebred animals sold at auctions. The findings indicated that visual scores, expected progeny differences, farm reputation, and auction type explain variations in prices. In addition, the morphological index brought higher premiums than the genetic index. The results have implications for farmers, genetic improvement programs, and policymakers as they indicate relevant factors in the seedstock cattle price formation process.
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September, 2022

Weather Impacts the Agricultural Production Efficiency of Wheat: The Importance of Precipitation Shocks

By: Chen, Bowen ; Dennis, Elliott J. ; Featherstone, Allen M.
Many studies have explored the determinants of technical efficiency in crop production, but fewer have examined how weather might change technical efficiency over time. We estimate weather effects on technical efficiency using data from 540 Kansas winter wheat farms from 2007/08 to 2016/17 using a panel stochastic frontier model that controls for farm-specific heterogeneity with farm fixed effects. Results show that precipitation is nonlinearly related to technical efficiency and that extreme temperature is associated with lower technical efficiency. Improving resilience to precipitation shocks is key to sustained efficient wheat production in Kansas.
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September, 2022

Land Value Impacts of Ethanol Market Expansion by Irrigation Status

By: Gardner, Grant ; Sampson, Gabriel S.
We examine capitalization of ethanol plant construction and capacity expansion into surrounding irrigated and non-irrigated farmland values using data on every land transaction in Kansas from 1995 to 2017 in a hedonic price model. We hypothesize that corn prices and thus land values are higher near ethanol plants. We further hypothesize that ethanol market expansion is capitalized into irrigated parcels to a greater extent than into nonirrigated parcels due to differences in water demand and precipitation. We estimate that an irrigated (nonirrigated) parcel within 50 km of an ethanol plant experiences an average price premium of 8.8% (6.3%) relative to more distant parcels.
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September, 2022

The Role of Community Food Services in Reducing US Food Insufficiency in the COVID-19 Pandemic

By: Tian, Zheng ; Schmidt, Claudia ; Goetz, Stephan J.
We use state-level Census Household Pulse Survey data to examine the role of community food services such as food banks and pantries in reducing food insufficiency during the COVID-19 pandemic in the United States. Food insufficiency increased for all income classes during the pandemic, and especially for the lower and middle classes. We adopt a fixed effects filtered estimator to estimate the coefficients on time-invariant regressors in a fixed effects panel model. Estimation results suggest community food services contribute to mitigating food insufficiency, especially for the middle class and in the early months of the pandemic.
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September, 2022

Determinants of Global Agricultural Trade

By: Devadoss, Stephen ; Ugwuanyi, Blessing ; Ridley. William
While comparative advantage factors expand agricultural trade, trade and domestic policies and gravity factors can either promote or hinder commodity trade. We use a theoretical multicountry trade model to analyze how various factors impact agricultural trade. Following previous literature, we model cross-country productivity differences using a probabilistic distribution. We then empirically implement the theoretical model to quantify the effects of various determinants of agricultural trade. Production-inhibiting policies and tariffs hinder bilateral trade, while domestic institutional quality, support programs, and land endowments expand bilateral trade.
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