Published Online (Pre-Prints)

Advance articles are accepted but have not yet undergone the copyediting process in preparation for publication. Minor stylistic changes may occur during the publication preparation process.

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: 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: 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: 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: Danielle Ufer, David L. Ortega, Christopher A. Wolf, Janice Swanson, and Melissa McKendree
9/24/2021
With a general social resistance to agricultural biotechnology, the viability of novel applications that improve animal welfare depends on market acceptance. Using a Becker-DeGroot-Marschak mechanism in a field experiment in Michigan, we elicit WTP for pork produced using two animal welfare-improving biotechnologies Ð immunocastration and gene editing, as well as other types of pork available on the market. A seemingly unrelated equations approach is used to model WTP premiums to evaluate U.S. consumer demand for these technologies. Results indicate negative attitudes toward biotechnology outweigh animal welfare benefits, though products still garner a premium due to heterogeneity in preferences. We find both technologies are commercially viable when used to improve animal welfare. Findings support policies that balance the costs of regulatory approval with observed market acceptance and policies that accommodate animal welfare demands.
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: Xuemei Li, Tina L. Saitone, and Richard J. Sexton
9/24/2021
The Women, Infants and Children (WIC) Program has changed to 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; $56 million annually if similar savings apply nationally.
By: Ruoding Shi and Olga Isengildina Massa
9/24/2021
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 2004-2018. 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.
By: Samuel D. Zapata, Felipe Peguero, Mamoudou Setamou, and Olufemi J. Alabi
9/24/2021
Citrus greening (HLB) is an incurable bacterial disease severely affecting most citrus production regions. Evaluating the economic feasibility of control practices is challenging due to the complex intertemporal interactions between the pathogen, the vector and the host. In this paper, a stochastic evaluation framework is proposed to systematically analyze the long-term economic performance of a broad range of management strategies. Different control approaches are evaluated in a hypothetical application in Texas. Results highlighted the detrimental effects of the disease and the importance of developing cost-effective control options. A substantial loss in value is expected regardless of the intervention actions implemented.
By: Azzeddine Azzam and Sunil Dhoubhadel
9/24/2021
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 2010-August 2020 period and designating March-May 2020 as the disruption period, we estimate a structural oligopoly/oligopsony model using the Generalized Methods of Moments. We fail to reject the hypothesis of competitive pricing of beef and cattle.
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: Stefan Wimmer and Fabrian Frick
9/24/2021
Farm animal welfare has become increasingly important in public debates. This study uses an interval regression approach to estimate the willingness to change (WTC) selected animal welfare-related farming practices based on a survey among German dairy farmers. The analysis reveals that the highest price premiums are required for implementing cowÂÂ-calf 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.
By: Tara Mitchell
5/24/2021
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 there will be a range of values of the price difference between high-quality and low-quality goods for which production of high-quality goods occurs when both tasks are carried out by a single agent but not in the case of separate agents. The range of price values for which this occurs will be decreasing as quality becomes more observable or as the cost of maintaining quality along the supply chain decreases. Policy recommendations are also discussed.
By: Abdel Fawaz Osseni, Alexandre Gohin, and Arnaud Rault
5/24/2021
Animal infectious diseases raise serious challenges for both public health and the livestock sector. This theoretical paper develops an original principal multiple-agents model for the prevention of these diseases where the heterogeneity of risk averse farmers is explicitly considered in addition to production externalities and ex ante informational asymmetries. We define the optimal design of policy instruments promoting socially desirable levels of biosecurity efforts by farmers. Our results confirm that failing to account for the heterogeneity of farmers generates Pareto-inefficient solutions. The management of heterogeneity depends on the instruments available to the government. When the policy uses individual-based instruments, the government should cope with heterogeneity with increased guaranteed payments and reduced average payments. However, when population-based instruments are the only available policy tools, increased average payments are better off to reduce moral hazard issues.
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.
By: Federico Antonioli and Fabio Gaetano Santeramo
5/24/2021
During the last two decades, the EU dairy sector has been interested by considerable changes and two policy reforms, the Fischler Reform and the Common Market Organization Reform, pushing toward economic liberalization. These changes affected the EU supply chains at different levels, altering the mechanisms of vertical price transmission. Against this background, 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.
By: Koichi Yonezawa, Miguel Gomez, and Edward McLaughlin
5/24/2021
State and federal minimum wage hikes are likely to impact the retail industry, including grocery stores, which employs a large number of less well-compensated part-time workers. Despite its relevance, it is not clear whether minimum wage increases affect full-time and part-time retail employees differently. We use state-level monthly data from the Current Population Survey (CPS) to show that minimum wage hikes lead to rising part-time wages, but not to declining part-time employment. Instead, retailers reduce their full-time employment and the hours worked by full-time workers in order to stay within a labor budget and to keep serving their customers.
By: Jacob S. Schmiess and Jayson L. Lusk
9/24/2021
Despite many consumers' intuitions to the contrary, improvements in farm animal welfare can often come into conflict with environmental objectives, particularly regarding greater intensification of production systems. This study aims to determine how consumers make tradeoffs between increased animal welfare and lower levels of environmental impact. A discrete choice experiment focused on ground beef choice was conducted with over 1,500 U.S. consumers in 2019. Because of unfamiliarity likely associated with animal welfare and environmental impacts of beef production, we sought to determine the sensitivity of results by varying how attributes were presented (textually, visually, or via labels) and what information was available to respondents (control, pro-environment, or pro-animal welfare). If shown only textual attribute information, consumers were unresponsive to environmental impacts; however, these issues were more influential when communicated visually or via labels. Avoidance of the use of added growth hormones was the most preferable attribute studied. Overall, results suggest consumers are willing to trade environment for animal welfare, but the extent of this tradeoff strongly depends on how the information is conveyed to consumers.
By: Luis A. Gil-Alana and Cecilia Font de Villanueva
5/24/2021
This paper deals with the analysis of world commodity prices by examining 15 categories of commodity prices using fractional integration and including thus fractional points. We use data corresponding to the 1960-2018 period obtained from the World Bank, and the results indicate large degrees of persistence in the majority of the series, especially when using parametric methods. However, with semiparametric approaches mean reversion is obtained in many cases. The possibility of structural breaks is also taken into account and our results confirm the large degree of persistence in the data, which seems to have increased across time.
By: Todd H. Kuethe, Siddhartha Bora, and Ani Katchova
5/24/2021
USDA Economic Research Service's (ERS) farm income forecasts play an important role in decision making and planning across the agricultural sector, yet recent studies suggest that ERS's initial farm income forecasts are biased. This study examines the degree to which ERS's initial forecast of net cash income and its components can be improved using information from USDA's 10-year Agricultural Baseline Projections. We apply several forecast evaluation tools to a unique set of ERS forecasts, Baseline projections, and official estimates from 1997 through 2019. Our forecast encompassing tests show that Baseline provides important information for predicting livestock receipts, direct government payments, farm-related income, and cash expenses. Our findings are potentially useful for both ERS forecasters and a variety of farm income forecast users.
By: Baba Adam and Awudu Abdulai
5/24/2021
We employ farm household data to investigate the heterogeneous treatment effects of conservation agriculture (CA) practices on farm performance and inorganic fertilizer use in Ghana. We use the marginal treatment effect (MTE) framework to account for the treatment effect heterogeneity in both observed and unobserved characteristics and to analyze policy-relevant treatment effect (PRTE). Results show that farmers with high propensity to adopt CA reduce Nitrogen usage from inorganic sources to a greater extent and experience significant increases in maize yields and farm net returns when compared to those with low propensity to adopt. Further, our PRTEs reveal that increasing training sessions, and providing incentives to reduce the cost of implementation are crucial for CA promotion.