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: Sunil P. Dhoubhadel
5/21/2020
This paper uses the staggered differenceÐinÐdifference model to assess the ex post impact of PA technology adoption on whole-farm profitability. The results indicate that PA technologies do not contribute as much to farm profitability when analyzed over a period. PA technologies may increase some operational efficiency, but farmers should not adopt PA, assuming that it will improve farm profitability. The positive contribution of the majority of PA technologies to farm profitability is not yet established.
By: Per-Olav Johansson and Bengt Kristršm
5/21/2020
The purpose of this note is to address a problem faced in using stated preference methods to estimate the willingness-to-pay (WTP) for a project. The considered problem occurs under pure altruism. Even though an agent is equipped with well-behaved preferences, a conventional closed-ended (binary) valuation question may induce her to overrate or underrate her true willingness-to-pay. On the other hand, an open-ended valuation format seemingly provides a correct answer, but such a format fails to be incentive compatible.
By: Yunjunjie Zhang and Marco A. Palma
5/21/2020
Berkeley's sugar tax policy is currently under intense scrutiny and debate while similar tax policies are rapidly expanding to other US states. Contrary to theoretical predictions and policy expectations, previous literature documents short-term evidence of increased consumption of sugary drinks in response to a sugar tax policy. We investigate the underlying mechanism behind this behavioral anomaly using the BLP-RC Logit demand model in characteristic space. We find that the sugary drink consumption increase is mainly driven by a change in the average valuation of the sugar content going from negative to positive following the enactment of the sugar tax policy.
By: Jihyun Eum, Ian Sheldon, and Stanley R. Thompson
5/21/2020
A heterogeneous firm model is developed allowing identification of the relationship between firm productivity and product quality. The model is used to analyze the impact of trade costs on food and agricultural trade based on a bilateral trade dataset covering 159 countries over the period 2010-13. The results show that a high firm capability cutoff, implying an ability to produce high quality, limits export market entry. In addition, fixed and variable trade costs have a negative and significant impact on the probability of firms entering export markets, while variable trade costs have a negative and significant effect on the export level of firms.
By: Steven Otto, Gregory Poe, and David Just
5/21/2020
Rent-seeking behavior by participants in payment for environmental services auctions reduces the number of affordable contracts and decreases environmental protection. We propose a new auction mechanism, the provision point reverse auction (PPRA), to mitigate this rent-seeking behavior. The PPRA includes a public component where the probability of contract acceptance for one individual is affected by the sum of the other accepted offers. We provide theoretical support for the new mechanism and follow with laboratory experiments. The experiments yield average offers between 12.57% to 58.17% smaller in a PPRA compared to alternate reverse discriminative auctions, with the exact difference dependent on the compared mechanism and auction parameters. Implementing a PPRA to procure environmental or conservation goods may therefore increase the total quantity of these services acquired.
By: Prithviraj Lakkakula and William Wilson
5/21/2020
Forward pricing and allocation mechanisms for rail transportation serve critical functions for the grain-marketing system. We examine the effects of shipping costs on the origin and export basis using a panel simultaneous-equations model. Results indicate that the origin and export basis are determined simultaneously with each one affected by the dynamic variability of shipping costs. On average, a dollar increase for the shipping costs decreases the origin basis by 19 cents and increases the export basis by 82 cents per bushel of soybeans. The interaction between shipping cost and exports on the export basis impacts both marketing and trading strategies in the grain-marketing system.
By: Horlick Ng and Alan P. Ker
5/21/2020
Feeding nine billion people by 2050, yield resiliency, climate change, and remaining economically competitive have received significant attention in the literature. Technological change in agriculture will largely dictate our ability to meet these challenges. Although there is significant literature on technological change in U.S. crop yields, very little has been done with Canadian yields. Moreover, the adoption and effect of various technologies and their interaction with climate tend to be crop-region specific. To this end, we model the changing nature of county-level yields for barley, canola, corn, oats, soybean and wheat in Canada. We use mixtures to allow and test for heterogeneous rates of technological change within the yield data generating process. While we tend to find increasing but heterogeneous rates of technological change, increasing and asymmetric yield volatility, and increasing textit{absolute} but decreasing textit{relative} yield resiliency, our results do differ across crops and exhibit spatial bifurcations within a crop. Using a standard attribution model, we find changing climate has differing effects across crops. We also consider the public funding implications for Canadian Business Risk Management programs.
By: Cameron Speir and Min-Yang Lee
10/13/2020
We characterize the geographic distribution of landings and evaluate whether changes coincided with implementation of individual transferable quotas (ITQs) in the limited entry groundfish trawl fishery on the US Pacific coast. Transferable quotas can solve aspects of the common property market failure, but may also alter the geographic distribution of landings, causing dislocation in communities dependent on fishing. We evaluate whether: 1) ITQs induced a spatial redistribution of landings and 2) smaller fishing ports were disproportionately affected by port consolidation. We use three methods to measure changes in spatial distribution: a spatial Theil index, kernel density functions of port revenue share, and Shorrocks Index of intra-distributional mobility. We find evidence of increased spatial concentration; however, this appears consistent with pre-existing trends and not related to ITQ implementation. Further, we find a high degree of intra-distributional mobility in the revenue share of ports that coincided with ITQ implementation.
By: Whoi Cho and B. Wade Brorsen
10/13/2020
This article considers three possible issues about the design of the Rainfall Index Pasture Rangeland, and Forage (RI-PRF) crop insurance program: i) how well the rainfall index matches actual rainfall, ii) whether the county base values can be made more accurate using spatial smoothing, and iii) optimal choices of RI-PRF crop insurance alternatives for producers as well as reducing the number of choices that producers have to make. Based on the results, we conclude the RI-PRF crop insurance program needs to reduce the number of choices and we provide suggestions for restricting the choices.
By: Courtney Bir, Christopher A. Wolf, and Nicole Olynk Widmar
10/13/2020
This paper examines US pet owner demand for veterinary service payment plans. Results revealed a strong preference for discounts and promotions for veterinary pet care. Examining specific attributes for a wellness plan revealed that respondents clearly were willing to pay more for preferred pricing compared to discounts for multiple pets. Respondents were indifferent between payment plans that distributed costs across 12 months compared to 6 months. In absolute terms dog owners were willing to pay more than cat owners. However, when normalized by the mean prices for dog versus cat veterinary service pricing, there were no statistically significant differences.
By: Arnim Kuhn and Wolfgang Britz
10/13/2020
Sub-Saharan AfricaÕs (SSA) socio-economic development is likely to remain different from most other world regions for the decades up to the year 2050. If current population and income growth were to continue, supply of crop biomass would have to triple by 2050, but uncertainties regarding future development trajectories in the mentioned three dimensions remain high. This study aims to develop consistent long-term scenarios combining trend variations in population numbers, per-capita income and crop productivity up to 2050 by using a recursive-dynamic version of the GTAP General Equilibrium Model. The choice of this model format allows the integration of macroeconomic constraints and repercussions of the said three drivers. Results focus on cropland use, farm production, food consumption, and imports of food commodities, contrasting developments in SSA and the rest of the world. The generated scenarios suggest that crop productivity will have a major impact on cropland expansion in SSA, giving potentially available cropland the role of a buffer that could smooth differences between future production outcomes. Another inherent smoothing factor will be countervailing trends in population and income growth that will diminish future differences in food commodity consumption per capita. These buffering factors will also limit the impact of alternative African trends on the rest of the world despite higher African import demand for food commodities across scenarios.
By: Tafesse W. Gezahegn, Steven Van Passel, Tekeste Berhanu, Marijke DÕHaese, and Miet Maertens
10/13/2020
This paper analyzes how structural and institutional heterogeneity among irrigation cooperatives shapes the impact of membership on farmersÕ welfare in northern Ethiopia, using a novel heteroscedasticity-based identification strategy. More specifically, we estimate how cooperative characteristics influence membersÕ income and poverty level. We find that stricter water use regulations have income-enhancing and poverty-reducing effects for farmers. We also find that farmers benefit more from membership in larger, younger, and bottom-up cooperatives initiated through grassroots collective action. Our findings have implications for irrigation development in Ethiopia, and call for a better deliberation of organizational heterogeneity in cooperative impact studies.
By: Tong Wang, Zheng Xu, Deepthi Kolady, Jessica D. Ulrich-Schad, and David Clay
10/13/2020
This paper examines farmersÕ perceptions of cover crop profitability and future adoption likelihood in climate transition zone of the Northern Great Plains. Using bivariate ordered logit models, we investigate factors that determine the perceived cover crop profitability and likelihood of future usage. Our results indicate that approximately 40% of long-term (10+ years) users perceived a profit increase of more than 5%. Additionally, future adoption decisions are positively affected by environment-oriented attitudes yet negatively affected by priorities on short-term profitability. More efforts can be directed towards educational programs that enhance understanding of the short- vs. long-term economic benefits of cover crops.
By: Christopher C. Pudenz and Lee L. Schulz
10/13/2020
Changing market fundamentals have made fed dairy cattle basis more variable. Our study estimates empirical models of fed dairy basis and utilizes tests that endogenously identify structural breaks following one large packerÕs decision to exit the fed dairy cattle market. We quantify the impact and find sale type, cattle weight, seasonality, ground beef prices, byproduct values, and fed cattle slaughter capacity utilization to be important basis determinants, although the impact of some of these factors has changed over time. Finally, we assess multi-year moving average basis forecast accuracy and draw implications for formulating basis expectations.
By: Julian Worley, Jeffrey H. Dorfman, and Levi A. Russell
10/13/2020
The impact of breed on carcass characteristics in various breeds of cattle has been well documented. This paper attaches these differences in breed characteristics to end revenue via different breed and breed combinations, percentage of Angus in pedigree, and purebred status. We find that while the genetics of many breeds is priced roughly in line with its value, some breeds are overpriced or underpriced by enough to significantly improve a cattle operationÕs profitability. We find relative to a pure Angus base, most breeds are less profitable in terms of carcass revenue per hundredweight (cwt).
By: Bachir Kassas, Marco A. Palma, and Charles R. Hall
10/13/2020
The consistent appeals against mandatory checkoff programs stimulated a wave of research investigating voluntary contributions mechanisms (VCMs) as a potential alternative in the provision of generic advertising. Using a public goods experiment with heterogeneous income and marginal-per-capita-returns (MPCR), we examine the interaction between highand low-income individuals in VCMs, an understanding of which can help enhance the performance of voluntary generic advertising programs. While free-riders were present among both income types, the majority of low-income individuals were keen on stimulating higher contributions through cooperation. Conversely, high-income individuals tend to decrease their contributions in the presence of the low-income type.
By: Ryan Feuz, Kyle Feuz, and Myriah Johnson
10/13/2020
Feedlot managers make difficult culling decisions using their best subjective judgement together with advice from animal health professionals. Using routinely collected operational feedlot data and five well-known classification methods, mortality predictive models are constructed to aid managers in making objective culling decisions. Simulation results suggest net return per head for calves having been treated at least once for any health incidence would increase on average by $14.01 if the best-performing model were used as a culling decision aid. The probability of a positive return is 60.9%. Using cost-sensitive learning, the average value may increase to $45.27 per head.
By: Christopher N. Boyer, Kenny Burdine, Justin Rhinehart, and Charley Martinez
10/13/2020
We simulated beef cattle producersÕ returns to shortening a 120-day calving season to a 45- and 60-day calving season by replacing late calving cows for two herd sizes. Dynamic simulation models were developed to consider production and price risk. We explored outcomes from annually replacing 10% or 20% of the late calving cows to reach the desired calving season length. The optimal scenario to shifting calving season length depends on herd size and whether the producer wants to maximize profits or certainty equivalent. The smaller herd benefited more from shortening calving season as compared to the large herd.
By: Brian P. Mulenga, Kellie Curry Raper, and Derrell S. Peel
10/13/2020
Existing studies on calf management practice adoption tend to treat practices individually and, by implication, ignore the possibility that some practices are more likely to be jointly adopted than others. This study applies market basket analysis, commonly used in retail marketing for prediction of consumer purchases, to examine bundling of calf management practices based on the likelihood of joint adoption using producer survey data. Results indicate that the base practices of horn management, deworming, and castration are the three most widely adopted practices and are more likely to be jointly adopted in varying combinations with other practices. Producers who adopt feed bunk training jointly with base practices are less likely to implement 45-day weaning, but those who do implement 45-day weaning are more likely to adopt feed bunk training. Based on conditional probabilities, respiratory vaccinations appear to be the last piece of the puzzle for completing the preconditioning bundle. Results indicate that likelihood of implant adoption is highest when all preconditioning practices have already been adopted. We discuss implications on extension programming and future studies concerned with understanding practice adoption decisions.
By: Brian E. Mills, B. Wade Brorsen, and D. Brian Arnall
10/13/2020
Past research on the profitability of precision phosphorus (P) application has used a small number of fields and a short time frame. Data on grid sampled fields provided by producers are used to define the distribution of phosphorus within fields. Expected yields and net present value (NPV) are simulated to compare variable and uniform rate P. The highest NPV used a variable rate that changed each year based on yield and predicted carryover. A variable rate using the same rates for four years was inferior to simply applying a little extra P at a uniform rate.
By: Chengcheng J. Fei, Dmitry V. Vedenov, Reid B. Stevens, and David P. Anderson
10/13/2020
The paper analyzes the effectiveness of joint- vs. single-commodity hedging for inputs and outputs of the cattle feeding cycle using the second-order lower partial moment (LPM2) as the risk measure. Joint hedging always results in higher hedging effectiveness than the singlecommodity hedging, but the difference is often small. The difference in performance is found to be explained by the commodity price dependence measures (KendallÕs tau). Ranges of taus leading to substantial improvement in risk reduction due to joint hedging are identified. The joint hedging strategy is worth implementing when the observed price dependence measures falls within the identified ranges.
By: Wei Zhang
10/13/2020
The welfare consequences of any climate program depend on preexisting market and regulatory distortions. This paper studies the impact of CaliforniaÕs climate policy on the dairy manufacturing industry with explicit modeling of major milk pricing policies. Numerical simulations indicate that climate policy leads to a diversion of farm milk from manufactured products to fluid products. The establishment of a Federal Milk Marketing Order in California reduces the distorting effect of milk pricing policies. As a consequence, consumers of fluid products would enjoy a bigger welfare gain from climate policy under the Federal Milk Marketing Order
By: Yunhan Li and J. Scott Shonkwiler
10/13/2020
We re-examine the existence of cattle cycles based on U.S. beef cow inventories from 1979 to 2019. Our analysis begins with a basic first-order stochastic cycle model and finds a cattle cycle of 16.54 years, significantly longer than the presumed 10- to 12-year cycle. Typically cycles become longer before they disappear. Upon further investigation, we re-estimate the length of the cycle by applying a second-order stochastic cycle model which improves goodness-of-fit. Surprisingly, the cycle length is estimated to be infinitely long, implying the complete disappearance of the beef cow cycle.