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By: M. Tang, N.M. Thompson, C.N. Boyster, N.J.O. Widmar, J.L. Lusk, T.S. Stewart, D.L. Lofgren, and N.O. Minton
5/30/2022
Previous hedonic assessments have largely relied on the assumption that bull buyers have homogeneous demands for bull attributes. However, quality differentiations and heterogeneous demands support the existence of submarkets. This analysis investigates market segments using a finite mixture model and 13 years of bull auction data. Results indicate that valuations of bull attributes vary across implicit buyer segments. Differences in demand may be influenced by a variety of factors, including, but not limited to, farm goals, labor availability, and end-use marketing arrangements for calves. Results have important implications for signaling quality cues throughout the industryÕs breeding sectors.
By: Pedro W. V. Queiroz, Richard K. Perrin, Lilyan E. Fulginiti, and David S. Bullock
5/30/2022
This paper examines the expected payoff to variable rate technology (VRT) 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 VRT versus a uniform rate applied to all cells to be about $1.81/acre.
By: Gary W. Brester, Michael McCullough, Joseph Atwood, and Caroline Austin
5/30/2022
In December of 2017, the Craft Beverage and Modernization Tax Reform Act (CBMTRA) lowered Federal beer excise taxes for a period of two years, and the Taxpayer Certainty and Disaster Tax Act of 2020 made the reduction permanent. We evaluate the ramifications of the CBMTRA on producers, consumers, and tax receipts, as well as quantify potential differential effects among the micro, regional, and macro brewing sectors. Although the excise tax reduction was supposed to primarily support the micro brewing sector, we find that the CBMTRA provided a larger combined benefit to the regional and macro brewing sectors.
By: Oladipo S. Obembe, Tong Wang, and Aaron M. Shew
5/30/2022
This paper uses farm survey data from the western margin of the Corn Belt to estimate the causal effects of adopting different conservation practices-- conservation tillage (CT), cover crops (CC), and diversified crop rotation (DCR)-- on the perceived change in yield, production cost and profit by farmers in South Dakota. We use propensity score kernel matching to correct the sample selection bias induced by non-random adoption of different conservation practices. We find that farmers who adopt CT and DCR are more likely to perceive an increase in profit and yield and a decrease in production cost for CC adopters.
By: Toto Olita, Steven Schilizzi, and Sayed Iftekhar
5/30/2022
The cost of providing environmental goods and services by private landholders is often highly uncertain. However, standard bidding models for conservation tenders often ignore this uncertainty. As a result, they fail to suggest suitable mechanisms to reduce the negative impact of cost uncertainty. We contribute to this knowledge gap by developing an optimal bidding model for a risky and budget-constrained tender in the presence of an emph{embedded insurance} mechanism, offering income protection. Results from our analysis show that, relative to uninsured landholders, landholders paying an actuarial fair premium tendered lower bids, potentially improving the cost-effectiveness of allocating conservation contracts.
By: Danyi Qi, Brian E. Roe, John W. Apolzan, and Corby K. Martin
5/30/2022
The proliferation of personal, household and workplace sensors and devices has created individual environments rich with purposeful and incidental feedback capable of altering behavior. We formulate an empirical learning model suitable for understanding individual behavioral responses in such environments. We estimate this model using data collected about the joint personal decisions of food selection, intake, and waste during a study in which users photographed their meal selections and plate waste over the course of a week with a cell phone. Despite neutral recruitment language and no expectation that participants would alter food intake in response to the assessment procedures, we found a substantial learning-by-doing effect in plate waste reduction as those who document greater plate waste in their captured photographs waste less on subsequent days. Further we identified that participants reduced plate waste by learning to eat more rather than by learning to reduce the amount of food selected.
By: Armen Ghazaryan, Alessandro Bonanno, and Andrea Carlson
5/30/2022
This study tests the assumption of weak separability between dairy and nondairy milk productsÕ demand by using food scanner data from 2012 to 2017 and estimating linear-approximate EASI demand systems. Our results show that the weak separability structures can be rejected. First, this finding shows that nondairy milk products compete with dairy milk for consumersÕ budget allocated to milk. Second, although milk demand studies often do not include nondairy milk, or assume weak separability, the exclusion of these products, or the separability assumptions may lead to biased estimates.
By: Yufeng Chen and Jiafeng Miao
5/30/2022
This paper decomposes the changes of ChinaÕs agricultural non-point source pollution (ANSP) into five factors through the logarithmic mean Divisia index method: emission intensity, production scale, labor intensification, urbanization, and population scale factors. Moreover, we further explore the contribution of each factor at different agricultural policy stages and the impact of subsidies on emissions. Our main findings show that the emission intensity is the main restraining factor of pollution while production scale plays the greatest effect on aggravating loads. Besides, the incentive effect of agricultural subsidies reduces the emissions but the expansion of government fiscal expenditures will lead to an increase.
By: Yuelu Xu, Levan Elbakidze, and Xiaoli Etienne
5/30/2022
Using county-level data from 1997 to 2018, we examine the effects of unconventional oil and gas (UOG) industry growth on agricultural acreage in the U.S. We find that on average, each active UOG well reduces crop acreage by 3.3 acres in counties with UOG production. However, the impacts vary by region. The relationship is positive in Southwest, U-shaped in Great Plains, and negative in Appalachia. Variations of impacts across regions result from differences in geology and historic developments of energy and agricultural sectors.
By: Daniel Mooney and Timothy H. Kelley
5/30/2022
Temporary water transfers are attractive to farmers because they provide revenue, but 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 fallowing, 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.
By: Tihomir Ancev, Moriah Bostian, and Brad Barnhart
1/11/2022
Nitrogen use efficiency (NUE) is often used to evaluate the relative ability of an agricultural system to process nitrogen (N) inputs. However, to date, no universal indicator simultaneously considers 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. The indicators are firmly grounded in economic theory, while also accounting for environmental effects of N use. In addition, the indicators allow us to track NUE of a given production unit over time, as well as technology change in the agricultural sector. We apply the Luenberger NUE indicators to the Upper Mississippi River Basin (UMRB) in the central US, in order to measure both production-oriented and environmental aspects of NUE for the period 2002-2012. Our findings indicate considerable spatial-temporal variation in NUE over the UMRB, which could be used to inform future agri-environmental policy and conservation targeting decisions. Comparing the Luenberger NUE indicators to a corresponding set of commonly used ratio-based NUE measures, we find that using the approach developed in this paper can lead to more cost-effective targeting of areas for N reduction in the UMRB.
By: Cristina D. M. Miller, Ashok K. Mishra, and Alexis H. Villacis
1/11/2022
This study investigates the impact of health insurance coverage and participation in government programs - counter-cyclical, conservation, and risk management programs - on off-farm labor allocation decisions of U.S. farm-operator households. Using household-level data of family farms from the 2015 Agricultural Resource Management Survey, this study employs a simultaneous probit estimation method to estimate the empirical model. Results show that U.S. farm-operator households with employer-sponsored health insurance coverage are associated with being14 percent more likely to work off the farm. Secondly, off-farm work by farm families is associated with increasing health insurance coverage by 4 percent. Results also show a negative and significant effect of counter-cyclical, conservation, risk management payments on U.S. farm-operator householdsÕ off-farm work decisions.
By: Christian Stetter, Stefan Wimmer, and Johannes Sauer
1/11/2022
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 meta-frontier. 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 CO2 equivalents per year while intensive farms could reduce emissions by 130 t CO2 equivalents without reducing their economic output.
By: Yangyuyu Luo, Frank Scrimgeour, and Sayeeda Bano
1/11/2022
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 per cent of the trade relationships survived one year only. In addition, the number of entries, distance, GDP per capita, production, import prices, the number of import origins and export destinations are the significant factors influencing the hazard rate of import survival. However, the estimated impacts of the phytosanitary treatments covered in New Zealand Import Health Standards are mixed and associated with the exporting countriesÕ level of development.
By: Jasper Grashuis and Ye Su
1/11/2022
There is much empirical evidence of consumer preferences for food products with state-sponsored designations. However, it is unknown what behavioral characteristics form the foundation of such consumer preferences. 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 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.
By: Peyton M. Ferrier, Chen Zhen, and John Bovay
1/11/2022
Implementation of the U.S. Food Safety Modernization Act (FSMA) Produce Safety Rule is expected to cost about 1.1 percent of revenue for covered farms producing raw and minimally processed fruits and vegetables in the United States. We develop new estimates of the cost of compliance with the rule by commodity and provide new estimates of own- and cross-prices elasticities of demand for 18 fruits and 20 vegetable commodities. 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 percent respectively for fruits and 0.15 and 0.59 percent for vegetables. Costs associated with the rule's implementation across these commodities are estimated to reduce producer welfare by 0.63 percent for fruits and 0.51 percent for vegetables (as a share of revenue). If the rule's provisions were instead enacted unilaterally by growers of individual commodities, producer welfare losses would be 0.93 percent of total revenue for fruits and 0.31 percent for vegetables.
By: Hayden Stewart and Diansheng Dong
1/11/2022
U.S. 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 back and forth 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 co-exist with plant-based options playing a minor role.
By: Andrew Barkley, Paul Aseete, and Jesse Tack
1/11/2022
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 1997-2017, 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.
By: Christopher N. Boyer and Andrew P. Griffith
1/11/2022
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 LRP contract that provides the best protection by sell month and the impact of the new subsidy rates.
By: Kati Burton, Alexander Maas, and Katherine Lee
1/11/2022
This study quantifies the magnitude and spatial-temporal persistence of home value losses associated with a chemical spill in the Elk River using difference-in-difference, spatial regression techniques. Results suggest homes within three miles of the spill experienced a value loss, with the largest effect on homes within one mile of the spill. Homes beyond three miles experience no significant effect. The loss in value affects prices for years after the contamination was remediated. Homes within the water utility service area experience a significant increase in value following the spill, which may reflect public value of water quality monitoring by a utility.
By: Jonathan Vivas, Man-Keun Kim, Chifumi Takagi, and Lilian Kirimi
1/11/2022
The African Indigenous Vegetables (AIVs) have remained underutilized despite their potential benefits in Sub-Saharan African countries. However, their demand is now growing due to a recognition of their contribution to food and nutrition security, employment and incomes. This study seeks to identify the determinants of adopting AIVs among Kenyan smallholder farmers, and in particular if farmers' decisions to adopt exhibits a true state dependence. Using a four waves panel data and a dynamic probit model, we found the existence of dynamics in the farmers' decisions, implying that farmers adjust their decisions with the knowledge gained in previous periods. In addition, the gender disparity exists, that is, female headed households are more likely to adopt AIVs. This is not due to differences in households characteristics but gender differences to grow AVIs, which may be associated with the culture in Kenya.
By: Jeff Luckstead
9/24/2021
Between 2004 and 2012, the United States enacted bilateral trade agreements with Chile, Peru, Panama, and Colombia. Using bilateral trade panel data sets of agri-food commodities, a structural gravity model is estimated to analyze the trade creation and trade diversion effects of these agreements. The agreement resulted in substantial increase in intra-trade for aggregate agri-food trade among member countries ranging from 53.73% for the Chilean agreement to 354.03% for the Peruvian agreement. Substantial heterogeneity exists when the aggregate commodity is disaggregated and when US exports to and imports from the four Latin American countries are considered.
By: Vardges Hovhannisyan, Chris Bastian, and Stephen Devadoss
9/24/2021
This study adopts a novel approach to assessing addiction to cigarettes, small and large cigars, e-cigarettes, smokeless tobacco, and loose smoking tobacco by decomposing tobacco demand into supernumerary and pre-committed quantities. Supernumerary tobacco consumption represents a demand component that varies with prices and smoker income, while pre-committed consumption is immune to changes in economic circumstances, and thus may be reflective of addiction. By empirically estimating the supernumerary and pre-committed demand components, we shed light on the severity of tobacco addiction and smoker price and income responsiveness in the United States, which may prove vital in refining various tobacco control policies in the country.
By: Eunchun Park, Ardian Harri, and Keith H. Coble
9/24/2021
Crop yield densities are often estimated at the county level. However, county-level yield data providers often omit county records due to low participation or other reasons. The data omission can undermine insurance premiums' credibility and thereby lead to restrictions on the provision of area insurance products in specific locations. To address this problem, we propose a novel Bayesian spatial interpolation method to estimate crop yield densities for counties with missing data. Empirical results indicate our approach is consistently superior to the benchmark approaches. Importantly, our approach offers noticeable estimation accuracy even at a significant level of data omission.
By: Juhee Lee and Nathan Hendricks
9/24/2021
Understanding the interaction between groundwater salinity and irrigation decision-making has important implications for groundwater management. Econometrics models were estimated using observed farmer behavior in response to different groundwater salinity levels in a region of Kansas. Estimation results demonstrate that farmers in the face of groundwater salinity change their irrigation decisions on irrigated acreage (i.e., extensive margin), crop choice (i.e., indirect intensive margin), and water application depth (i.e., direct intensive margin). The empirical results indicate an overall decrease in water use due to higher salinity, primarily through a decrease at the extensive margin.
By: Stephen Devadoss, Blessing Ugwuanyi, and William Ridley
9/24/2021
While comparative advantage factors expand agricultural trade, trade and domestic policies and gravity factors can either promote or hinder commodity trade. A theoretical multi-country trade model is used to analyze how various factors impact agricultural trade. Following Chor (2010), 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.
By: Zheng Tian, Claudia Schmidt, and Stephan J. Goetz
9/24/2021
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.
By: Grant Gardner and Gabriel S. Sampson
9/24/2021
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 near an ethanol plant are higher than for parcels located farther from a plant. We further hypothesize that ethanol market expansion is capitalized into irrigated parcels to a greater extent than non-irrigated parcels due to differences in crop water demand and precipitation in Kansas. We estimate that an irrigated (non-irrigated) parcel having one or more ethanol plants situated within 50km fetches an 8.8% (6.3%) price premium relative to more distant irrigated (non-irrigated) parcels, on average. We estimate the average marginal effect of a 10 million gallon per year increase in ethanol capacity within 50km is a 4.8% (1.8%) increase in irrigated (non-irrigated) land value.
By: Bowen Chen, Elliott J. Dennis, and Allen Featherstone
9/24/2021
Technical efficiency measures the ability to produce maximum output from a given set of inputs. Since the 1960s, many studies have explored the determinants of technical efficiency in crop production, while less have examined how weather might change technical efficiency over time. In this article, we estimate the weather effects on technical efficiency of Kansas winter wheat farms using data from 540 Kansas farms from 2007/08 to 2016/17. Technical efficiency is estimated by 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 (e.g., temperatures below 0$^{circ}$ C) is associated with lower technical efficiency. Among all the weather variables, Fall precipitation explains the majority of the variation (29%) in the estimated technical efficiency. The average technical efficiency during this time period is 85%, and the lowest was seen in 2013/14 (averaged at 63.8%) due to a dry and cold Spring. Using these estimates, we assess the impacts of climate change on technical efficiency under alternative hypothetical scenarios of warming temperatures and increasing variability of precipitation. We find much larger negative impacts of increasing precipitation variability than temperature warming. We conclude that improving the resilience of wheat production to precipitation shocks, particularly in Fall, is key to sustained efficient wheat production in Kansas.
By: Yuri Clements Daglia Calil, Luis A. Ribera, David P. Anderson, and William Koury Filho
9/24/2021
Nellore breed is the cornerstone of BrazilÕs success in beef production. However, Nellore seedstock pricing has yet to be understood. A hedonic analysis under a hierarchical model was performed to explore how physical, morphological, genetics, 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.
By: Fabio Santeramo
1/11/2022
The Law of One Price is a dated but still a puzzling economic concept. Studies that found violations of the Law are frequent and numerous, although scholars have pointed that failures of the Law are likely to be due to 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 spatio-temporal 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 of the statements implied by the Law of One Price are indeed not empirically violated.
By: Aditya R. Khanal, Ashok K. Mishra, and Gudbrand Lien
5/24/2021
Using primary survey data of onion growers in India, this study tests the relationship and predictability of risk attitude measures on farmersÕ undertaking of various risk management decisions. Findings suggest that risk management decisions like diversification, adopting good agricultural practices, quality-enhancing practices, and participation in off-farm work are likely to decrease with decreasing risk-aversion. High-risk-averse farmers are more likely to adopt farm diversification strategies, good agricultural practices, government-recommended seed varieties and preventive measures against diseases & pests than low-risk-averse farmers. The likelihood of adopting good agricultural practices decreases with farmersÕ perceived higher risks of low-quality production, a higher risk of losing crops due to weather, and insects and pests.