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May, 2024

By: Bakhtavoryan, Rafael; Capps, Jr., Oral
An Exact Affine Stone Index model is estimated to capture demand interrelationships among Muenster, Mozzarella, Colby, Cheddar, Swiss, other natural, specialty/imported, and processed cheese. A balanced panel constructed from designated market areas and quarterly periods from 2018 to 2020 derived from Nielsen is used. The demand for Muenster, Cheddar, Swiss, and specialty/imported cheese is unitary elastic, while the demand for Mozzarella, Colby, other natural cheese, and processed cheese is inelastic. All varieties are necessities, and substitution relationships are predominant. Demographic characteristics impact the demand for these cheese varieties. Retail pricing strategies designed to maximize total sales are provided.

May, 2024

By: Rozowski, Casey; Vukina, Tomislav
North Carolina imposed a moratorium on the construction and expansion of swine farms in 1997. Existing facilities were granted production permits tied to specific properties, but the quota contributed to the consolidation of pork processors and stifled competition in the market for live hogs. Theory predicts that production permits should be a source of quasi rents to farmers but that the market power of processors would reduce their value. Using a hedonic model of farm sales from 1994 to 2010 we find that the value of production permits dropped from 55% of the average farm price to 49%, costing farmers on average $68 thousand.

May, 2024

By: Ridley, William; Devadoss, Stephen
We assess the economic and political factors that underpinned the scope and magnitude of tariffs and US subsidies during the US--China trade dispute. We develop a political-economy model of tariff retaliation and compensatory subsidization and econometrically quantify the determinants of trade and subsidy policies during the trade dispute. Our empirical findings confirm that political (electoral geography of targeted commodities) and economic (optimal tariff relationships, attributes of export supply and import demand, and trade balances) factors were key determinants of US policies. China's tariff retaliation was consistent with higher protectionism for larger sectors with extensive state ownership.

May, 2024

By: Biram, Hunter; Tack, Jesse; Nehring, Richard; Yu, Jisang
The potential for moral hazard is an unforeseen outcome of achieving the dual agricultural policy goals of income stabilization and limited environmental impact. Here, we review key issues for identifying the moral hazard effects of crop insurance on pesticide use and include an empirical application that addresses both insurance endogeneity and quality adjustment of pesticides over time. Our results reveal no consistent linkage between insurance and pesticide use across four major crops. We discuss the differences in these effects across different specifications and crops and conclude by stressing that caution be used when looking to the academic literature for guidance on this key policy question.

May, 2024

By: Raveh, Ohad; Zhang, Yan
Does the discovery and operation of a nearby giant oil field carry long-term health consequences? Capitalizing on the 2011Ð2018 waves of the China Health and Retirement Longitudinal Study, we find that a giant oil discovery occurring within a 60-km radius significantly decreases the relative average long-term health conditions of individuals born after it. Specifically, the average share of individuals diagnosed with a chronic disease in these areas increases, in relative terms, by 22%. This effect is observed most notably in diseases related to the respiratory, digestive, and urinary systems and may be driven by changes in the consumption habits of alcohol and tobacco.

May, 2024

By: Goodrich, Brittney K.; Davidson, Kelly A.
Relatively little is known about producersÕ decisions to enroll in the Pasture, Rangeland and Forage Rainfall Index (PRF-RI) insurance program. By analyzing survey data from producers in the northeastern and southeastern United States, we show that assuming that producers are aware of crop insurance options leads to false inferences about enrollment decisions. Full-time producers who were more reliant on rented hay and pastureland and those who learned about PRF-RI from a crop insurance agent were more likely to enroll in PRF-RI. Livestock revenue insurance was found to be a complementary product to PRF-RI. Our study highlights the importance of targeted PRF-RI information campaigns.

May, 2024

By: Kang, Nawon; Sims, Charles B.; Armsworth, Paul R.; Mingle, James C. ; Zhu, Gengping; Cho, Seong-Hoon
Applications for risk diversification strategies in addressing conservation problems commonly ignore upper limits in returns, which may not reflect the fact that these economic returns are often beyond the scope of what conservation assets can produce given constraints on species, sites, or activities. This research identifies the consequences of failing to account for upper limits on returns from conservation in a modern portfolio theory (MPT) framework. We find that the amount of risk reduction conservation organizations can achieve with the same level of compromise in the expected return on investment is higher when returns are constrained.

May, 2024

By: Samper, Bailey A.; Koziol, Jennifer H.; Williams, Ryan B.
This study evaluates the costs associated with bovine viral diarrhea virus (BVDV) control strategies for cowÐcalf producers and aims to identify minimum viable premiums to induce control measures. Monte Carlo simulations were used to estimate the cost of control strategies, risk of BVDV outbreak, and BVDV-attributed production losses. We find that the price premiums needed to induce enhanced BVDV control by cowÐcalf producers range from $8.41 to $35.52 per head. Additionally, management of larger herds are more likely to adopt rigorous control protocols due to the increased likelihood of PI exposure and ability to absorb additional costs.

May, 2024

By: Yang, Yao; Karali, Berna
Output markets usually respond asymmetrically to input price changes, with prices rising faster than they fall; this phenomenon is known as the rockets and feathers pattern. This pattern has not yet been tested for a joint production process despite strong connections among markets. We fill this gap by using a vector error correction quantile framework and apply our model to soybean meal and oil, which are jointly produced by crushing soybeans. We find that output prices respond more to input price increases when their own market is bullish but the other market is bearish, confirming the rockets and feathers pattern at the extremes of price distributions.

May, 2024

By: Kemper, Nathan; Popp, Jennie; Nayga, Jr., Rodolfo M.; Bazzani, Claudia
Overlooking respondents' attribute attendance in choice experiments affects coefficient estimates, model fit, performance measures, and welfare estimates. How best to identify and account for individual attribute processing strategies is still unclear. Query theory suggests that preferences are subject to the processes and dynamics associated with retrieval from memory. We apply Query theory to the study of attendance to attributes to approximate the thoughts generated by individuals while they make choices in a choice experiment. Our results demonstrate that the stated and query approaches improve model fit and performance. The query approach has distinct advantages but also important limitations.

January, 2024

By: Rezitis, Anthony; Mishra, Ashok; Kumar, Shalander
This study estimates changes in productivity and profitability and their respective components for two major Indian pulse crops, pigeon peas and chickpeas. Results show that average profitability declined during the period under consideration (2009Ð2014) for both pulse crops. Lower profits are driven by increases in input prices and decreases in total factor productivity, output growth, and output (constant) prices. The reduction in total factor productivity is primarily due to a slow increase in output. Finally, the technical efficiency estimates are lower than for cereal crops like rice and wheat: 72% for chickpeas and 71% for pigeon peas.

January, 2024

By: Kaminski, Danielle M.; Caputo, Vincenzina; McKendree, Melissa G.S.
The social license between the US public and food producers has grown increasingly complex, especially as it relates to the treatment of farm animals and workers. In this study, we employ two bestÐworst-scaling experiments to elicit the publicÕs preferences regarding animal and worker welfare farm practices within the dairy and poultry industries. Using a latent class modeling approach, we find that US consumers generally value animal welfare practices more than they value worker welfare practices. However, population subgroups with strong preferences for worker welfare practices exist, primarily among older, highly educated, Democrats living in the Northeastern United States.

January, 2024

By: Zapata, Samuel D.; Carpio, Carlos E.
This study introduces distribution-free methods to estimate interval-censored willingness-to-pay (WTP) models. The approaches proposed encompass the recovery of WTP values using an iterated conditional expectation procedure and subsequent estimation of the mean WTP using parametric and nonparametric models. Methods allow us to estimate the effects of covariates on the mean WTP and the underlying probability distribution. We employ Monte Carlo simulations to compare the performance of the estimators proposed against standard parametric and nonparametric estimators. We illustrate the estimation techniques by assessing producersÕ WTP for services provided by an e-marketing website that helps connect farmers with local consumers.

January, 2024

By: Burnett, J. Wesley; Lacombe, Donald J.; Wallander, Steven
While markets for agricultural commodities are often global, markets for cropland can be highly localized. Soil makeup and climate also tend to make farmland rental markets localized. This study compares several econometric models to measure the extent of spatial spillovers within these markets. A fully dynamic spatial model estimated on cropland transactions shows that sales are highly localized in the short term but face greater neighboring spillovers in the long term. Accounting for longer-term spatial interdependence of farmland markets can help to improve land value forecasts.

January, 2024

Propensity score matching is used to estimate how direct-to-consumer (DTC) marketing influences farm survival and growth over 5-year periods. Results show that beginning farms with DTC sales grow more slowly but are more likely to survive in business compared to similar farms without DTC sales. The study finds that DTC marketing is associated with lower financial performance and a greater likelihood of facing borrowing constraints, which might help explain the slower farm growth. DTC marketing is also associated with lower farm income volatility, which might help explain the higher survival rate.

January, 2024

By: Garcia, Viviana; Mšhring, Niklas; Wang, Yanbing; Finger, Robert
We study the adoption of a new pesticide-free wheat production system in Switzerland. Large-scale transitions to such production systems have implications for the entire agricultural and food sector. Using survey data from 1,073 Swiss wheat producers, we empirically test whether risk preferences and risk perceptions in four domains relate to farmersÕ decisions whether and when to adopt pesticide-free production. We observe heterogeneity in farmersÕ risk perceptions (e.g., early versus late adopter) and find that farmersÕ risk preferencesÑas well as their perceptions of production and institutional riskÑare related to adoption behavior rather than to perceived market and investment risks.

January, 2024

By: Neill, Clinton; Zhang, Peilu
The pain of payment---a negative feeling consumers experience during the process of paying for a good or service---can reduce access to the veterinary services market. We examine the potential of payment plans to reduce pain of payment among pet owners from a theoretical and empirical perspective. We find that payment plans reduce pain of payment by decreasing the price and income effects of purchasing veterinary services. An important, additional finding is that some consumers discount the payment plan option. We suggest that payment plan options should be carefully considered for different groups of consumers.

January, 2024

By: Santeramo, Fabio Gaetano; Martinez-Gomez, Victor; M‡rquez-Ramos, Laura; Lamonaca, Emilia
The European fruit and vegetable (F&V) trade regime is regulated by the Entry Price System (EPS), a nontariff measure on imported goods. We investigate the trade effects of the EPS by estimating a structural gravity model for the major European suppliers of apples, lemons, oranges, peaches, pears, table grapes, and tomatoes. We assess how imports react to EPS overshoots, and price dynamics. The EPS limits imports, but marked differences exist across products. The efficacy of the EPS is valid for all products; its effectiveness is found only for less perishable F&Vs.

January, 2024

By: Wilson, William; Lakkakula, Prithviraj; Bullock, David
The Russian invasion of Ukraine disrupted grain flows from that region. As a result of the invasion, Ukraine has evolved from a country with some of the lowest logistical costs in the world to having the highest logistical cost. This paperÕs purpose is to analyze the effects of the Russian invasion on the logistical functions and the costs for corn exports from Ukraine and its competitors using an optimized Monte Carlo simulation model. Most important are the effects of the radical increase in shipping costs from Ukraine, reduced port capacity and export supplies.

January, 2024

By: Yin, Mengyu; Raper, Kellie Curry; Peel, Derrell S.; Hagerman, Amy D.
The stocker industry plays numerous critical roles in the cattle industry and is the most flexibleÑyet complicatedÑsegment of the beef supply chain. Stocker producersÕ calf-purchasing decisions have historically been diverse and difficult to characterize. This study uses data from a unique survey to analyze factors affecting stocker producersÕ calf-purchasing decisions. Latent class analysis is used to classify stocker producers into subgroups based on cattle-purchasing preferences. Results indicate that stocker producers can be divided into four distinct latent classes according to calf-purchasing preferences.