This study reports results of an acreage supply equation using individual farm data and develops implications for bias introduced by use of aggregate data. The analysis shows that use of aggregate acreage response models underestimates the absolute value of price elasticities and the lagged adjustment process. Further, aggregated analyses cannot incorporate some variables found to be important in explaining from level acreage response.

An example of agricultural research technology transfer and implications for the fiscal coordination and conduct of agricultural research programs is presented. Uniform Soybean Tests conducted in four Southern States are used to estimate the potential for transferability of soybean variety research among homogeneous sub-areas. The results indicate a high degree of transferability among the sub-areas. Coordinated management of soybean variety research could potentially provide more effective expenditure of soybean breeding research investments. Additionally, the concept or research transferability is not limited to soybeans or soybean variety research. Increased coordination of agricultural research investments by individual states may enhance existing benefits.

Increasing concentration in food processing has important economic implications for agricultural producers and consumers. This paper addresses the issue by focusing on a case where pure monopsony conditions appear to hold–catfish processing in West Alabama. Farm-level impacts of the market power imbalance are described via a six equation theoretical model. Results show price elasticity of farm supply governing the economic incentive to the processor for exploiting its market power: less (more) elastic supply implies greater (lesser) divergence between competitive and monopsony price. The theoretical model is operationalized using an indirect procedure recently suggested by Houck for estimating farm level supply elasticities. Based on these supply elasticities and historical prices, the model predicts a 12-35 percent potential reduction in prices received by West Alabama producers as a result of market power imbalance.

The purpose of this paper is to evaluate the effect of the proposed deep draft port user fee on export grain flow patterns and provide insight into potential marketing system adjustment costs which may result from diverted flows. A multiperiod, network flow model is used to conduct the analysis. Analyses show grain flow patterns to be affected most by a port specific fee which is based on weight. The annual variation in flows generated by imposition of port user charges is generally less than the historical year-to-year variation and, in most cases, the altered port area flows can be accommodated by existing infrastructure.

Incorporation of futures markets into the theory of the firm under uncertainty has received considerable attention in risk management. A theoretical model of optimal firm decisions in cash and futures markets considering price, production, and financial risks is presented. Production and marketing strategies for corn and soybeans in Georgia and Illinois are analyzed to determine the optimal amount of futures contracting which may be a hedge or a speculative position. A partial hedge is optimal for most situations for risk averse producers when the amount hedged is variable. With fixed quantity transactions, speculative and cash positions, but not hedging, tend to be E-V efficient.

A multi-product cost function model was used to analyze energy demand in various agricultural subsectors. This approach has advantages over previously used approaches since it reduces aggregation bias, considers technological jointness, and provides various disaggregative measures related to energy input demand. When fitted to West Virginia county level data, labor and miscellaneous inputs in crop and livestock production were found to be substitutes for energy, while capital, machinery, and fertilizer were complementary to energy. Energy demand was inelastic and increases in machinery prices had the largest reduction effect on energy demand. Technological change was found to be capital, machinery, and fertilizer using, but it was labor and energy saving. Analyses indicated that the elasticity of demand for energy inputs with respect to livestock output was significantly larger than the elasticity with respect to crop output.

Factors which explain supply response behavior of South Carolina tomato growers were determined. Two well known supply response models were used for comparison: the Nerlovian structural model and the Just risk model. The Just risk model reflected the significance of the risk effect in both stable and unstable periods. An evaluation of forecasting power between the two models was indeterminate. Growers are apparently willing to invest in more information with increased market instability because growers were influenced by the Florida winter price of tomatoes in planting decisions during the period of instability.

Artificial drying of corn in the Southeastern Coastal Plain was shown to be financially feasible for average annual per farm production levels of greater than 10,000 bushels. Net present values for four types of drying systems were evaluated using simulation modeling in which weather conditions, yield levels, and prices were entered as stochastic variables. Scale of production and irrigation substantially influenced crop drying potential. Stochastic efficiency analysis was used to evaluate the riskiness of the investment.

An analysis of risk attitudes for a sample of grain sorghum producers in the Texas Coastal Bend is reported. Four alternative functional forms were estimated on data elicited by the direct elicitation of utility approach. The exponential functional form described most producers' utility preferences better than other utility forms. Relationships between exponential risk measures and both producer attributes and farm characteristics, including interactions among them, were identified as significant. Risk aversion was found to diminish with more experience in farming and to increase with more leasing of farm land. Risk aversion was also found to decline with larger farm size and to increase with higher dependency of farm operators on farm income.

This study examines the effects of alternative government farm programs and hypothetical price variability levels on two Texas cotton farms which were simulated stochastically over a 10-year period. Results indicate that a combination of high price variability and participation in government programs stimulates growth and wealth accumulation.

Several studies have estimated plant nutrient demand functions for nitrogen, phosphate, and potash. All included own-price effects but excluded prices of jointly applied nutrients. In this study, nutrient demand functions, which include prices of all three nutrients, are estimated for Tennessee by seemingly unrelated regression. Results suggest that cross-price eflfects are important in determining plant nutrient demand, at least in the case of Tennessee, and that multicollinearity need not be a hindrance in all cases to including cross-price eflfects in plant nutrient demand models.

Selected risk programming solutions (i.e., profit maximization, Target-MOTAD, and MOTAD) are tested in an economic environment outside the data set from which they were developed. Specifically, solutions are derived from either a longer 10-year (1965-74) or shorter 6-year estimation period (1969-74), and then, they are tested for consistent risk-income characteristics over a later 10-year period (1975-84). Risk solutions estimated from earlier periods perform well in the later test period in spite of different economic conditions between time periods. However, favorable performance may be related to the specific example used in this analysis. Further testing for other farm situations is needed before general conclusions can be reached.

Florida is typical of many southeastern states in that it exports feeder cattle and imports carcass and boxed beef. The objective of this paper is to estimate the cost of retaining feeder cattle in Florida, feeding these cattle to slaughter weights, slaughtering them, and distributing the meat to retail outlets. A mixed integer programming model is developed. The optimal number and location of feedlots and slaughter plants are determined. The results indicate that at production levels exceeding 600,000 head, the cost of producing carcass beef in the State is comparable to the average for the United States.

Although apparently preferred by farmers to direct hedging as a forward pricing mechanism, forward contracting has received little attention in the literature dealing with optimal forward pricing levels. An often-cited reason for producer preference for forward contracting is the absence of basis risks under that forward pricing alternative. This paper presents models of optimal forward contracting and hedging under price and yield uncertainty within a mean-variance framework. The results indicate that basis certainty does not explain preferences for forward contracting.

A model with omitted resource constraints is suggested as an alternative to a risk aversion model for explaining economic behavior. This paper uses two standard mathematical programming models to further explore this issue. One model is a standard profit maximization linear programming model and the other is a risk averse quadratic programming model with part of the constraints deleted. Theoretical investigation of these models demonstrates that risk aversion can substitute for omitted resource constraints. A small empirical model is then solved under both formulations. With resource constraints deleted, positive risk aversion is necessary to obtain a similar enterprise organization as under profit maximization with complete constraints. These two solutions are then interpreted with the theoretical optimality conditions.

Systematic approaches to validation of linear programming models are discussed for prescriptive and predictive applications to economic problems. Specific references are made to a general linear programming formulation, however, the approaches are applicable to mathematical programming applications in general. Detailed procedures are outlined for validating various aspects of model performance given complete or partial sets of observed, real world values of variables. Alternative evaluation criteria are presented along with procedures for correcting validation problems.

Whole farm simulation analysis and econometric techniques are employed in an analysis of crop rotations and tenure arrangement strategies. The FLIPSIM model is used to analyze a representative Texas Upper Gulf Coast rice and soybean farm. Probit analysis is then used to determine the impact of net cash farm income, land tenure, and crop rotation on probability of survival. Results suggest that, although the simulation model is useful in providing information on the effect at the farm level of following the different strategies, probit results provide greater understanding into the returns and risk inherent to each strategy.

An analysis of a typical crop and livestock farm in North Florida is presented. The analysis incorporates the potential competition and complementarity among crop and beef cattle enterprises. A Target MOTAD model is developed to account for risk in a decision framework.

The results indicate that when income risk is ignored, peanuts, watermelon, and stocker cattle are the only enterprises included in the optimal solution. When income risk is heavily weighted, the optimal solution includes peanuts, watermelon, stocker cattle, cow-calf, and irrigated soybeans. The results suggest that the persistence of cow-calf production may be explained as a stabilizer of income.

The agricultural sector has operated in a period of high real interest rates for over half a decade. Some are concerned that this has limited capital availability and stagnated the historic capital for labor substitution occurring in the sector. This study proposes new procedures for estimating the aggregate production function of United States agriculture. Improvements include incorporation of total returns and revised measures of both durable and nondurable capital inputs. Results indicate increasing capital productivity has occurred, but encouraging further capital substitution may not benefit agricultural producers.

Regular hired farm workers, performing 150 days or more of farm work annually, became increasingly important in the 1970's. The number of regular hired workers in the United States increased by almost 50 percent during the decade, while the number of seasonal workers, operators, and unpaid family workers declined. Pricing of regular hired labor is investigated through estimation of three nested wage determination models in a case study analysis for Georgia. Micro-level data on individual workers were used to analyze the effects of general human capital, farm worker duties, local labor market conditions, and farm characteristics on wage rates.