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: 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: Matthew J. MacLachlan, David Boussios, and Amy D. Hagerman
5/24/2021
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 Highly Pathogenic Avian Influenza outbreaks (2004 and 2014/15) 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.
By: Yongwang Ren, Dayton M. Lambert, Christopher D. Clark, Christopher N. Boyer, and Andrew P. Griffith
5/24/2021
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 ac-1 incentive is estimated to convert 7,631 acres to WSG costing $0.77 million.
By: Xin Ning, Jason H. Grant, and Everett B. Peterson
5/24/2021
This article conducts a retrospective empirical assessment of Bovine Spongiform Encephalopathy (BSE), which was discovered in the U.S. in December 2003, on Japanese beef imports from the U.S. and competing suppliers. Using a source-differentiated almost ideal demand system of fresh/chilled and frozen 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 to both an instantaneous and persistent impact on Japanese beef imports lasting for over a decade, causing a significant shift in Japan's consumer preferences for beef imports from different origins. Over one-half of the estimated expenditure, own-price, and cross-price elasticities have changed in the aftermath of BSE, both in terms of magnitude and variance, and some have not returned to their pre-BSE levels even after the trade recovery period. Our results have important policy implications concerning beef substitutes and import competition following animal disease outbreaks.
By: Jared Hutchins and Brent Hueth
5/24/2021
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 to 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 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.
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.
By: Ethan Sabala and Stephen Devadoss
5/24/2021
This study formulates a theoretical and empirical spatial equilibrium model that allows for varying market structures, ranging from bilateral monopoly with fringe countries to perfect competition. The empirical analysis examines the effect of the Chinese 25% tariff on the world sorghum market under the various market structures. Under bilateral monopoly, the effects of the tariff are less pronounced 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 the adverse effects of the tariff. 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 than a bilateral monopoly with fringe importers and exporters.
By: Clinton Neill and Susan E. Chen
5/24/2021
The USDA has recently undertaken new food safety measures to reduce food safety scares. Yet, in 2018, there were two separate instances of shell egg recalls. Food scares and subsequent recalls can alter consumer confidence in the food they eat. Consumer reaction to scares 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. An understanding of the impact of media in the presence of food safety scares is critical for egg producers. In this study, we examine the effect of recent recalls in shell eggs on shell egg prices. Using weekly data, we analyze the effect of recall duration and media coverage on egg prices. This model follows the distributional event response model proposed by Rucker et al. (2005). We allow for nonlinear changes at the time of specific egg scares. Also, we account for media coverage about each egg scare to parse out the relative impact of media on egg recalls.
By: Elisa De Marchi, Alessia Cavaliere, and Alessandro Banterle
3/1/2021
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 on the market. This paper investigates the motivations of consumer acceptance for cisgenic products. By comparing four information treatments (i.e., basic information treatments, naturalness treatment, health, and environment treatments) we demonstrate that information on health-related benefits and, especially, on environmental benefits contribute 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.
By: Jungho Baek and Jiangqin Xu
11/18/2020
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 asymmetry influences exchange rate fluctuations have on bilateral trade flows of various forest products between the U.S. and Canada. To this end, we use the method of the nonlinear autoregressive distributed lag (NARDL). We discover that there is 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.
By: A. Ford Ramsey, Jesse B. Tack, and Maria Balota
11/18/2020
While the economic impacts of climate change on crop yields are well documented, less is known about the relationship between climate and crop quality. This discrepancy persists despite the economic importance of quality in determining agricultural revenues. Using a unique data set from the multi-state 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.We calculate changes to revenue using Commodity Credit Corporation (C.C.C.) loan values as a proxy for market prices; C.C.C. peanut loan values depend on kernel size in a given batch of peanuts. 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 1 degree Celsius. Examining varietal improvement as an adaptation strategy, we find that gains in yield and quality from breeding could offset revenue losses under moderate warming up to 1 degree Celsius, but are unlikely to sustain farm revenues under more extreme changes in temperature.
By: Ashok K. Mishra, Joaquin Mayorga, and Anjani Kumar
11/18/2020
The study uses 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. Secondly, the study assesses the impact of CF on output prices, profitability, and resource usageÑfertilizer and marketing expenses. Findings show that technical efficiency is consistently higher for contract farmers than independent farmers. Also, we find that significant technology and managerial gaps exist between contracted and independent growers. Results show that baby corn producers who are engaged in CF, after controlling for characteristics of both control and treatment groups, receive lower output prices and contract farmers have smaller marketing and fertilizer and expenses. However, results reveal that CF results in higher profitsÑmainly due to reduced marketing expenditures. Thus, CF intervention benefits the livelihood of smallholders, increases efficiency, and reduces environmental degradation without compromising yield.
By: Simone Angioloni, Claire Jack, and Ronan McCarry
11/18/2020
Agriculture is one of the most hazardous sectors in terms of occupational injuries resulting in more working days being lost. This paper employs a dataset of 7,500 Northern Irish farms over the period 2015-2019 to investigate what factors affect the number of working days lost in agriculture. Results indicate that public policies aimed to improve farm safety should focus on dairy farms, young workers, family members different from the main farmer, and dangerous working practices related to machineries and vehicles. Besides, results indicate that more than 18,000 workdays are lost every year in Northern Irish farms.