The role of farm dependency and size on rural economic growth is examined with data from 2,240 nonmetropolitan U.S. counties for the period 1990–1995. A simple neoclassical model of regional economic growth is set forth with a central question relating to the role of agriculture on rural economic convergence. Traditional neoclassical theory predicts that poor rural areas should grow proportionally faster than rich areas. As interpreted in the academic literature and popular press, a preponderance of small family farms should enhance growth. Results suggest that a higher level of local dependence on production agriculture could lower growth rates.

Regulatory changes by federal and state agencies portend a switch from nitrogen-based livestock manure disposal policies to phosphorus-based policies. This paper estimates the compliance costs of such a policy change for a hypothetical hog-grain farm in North Central Indiana. The farm includes 1,500 acres of cropland and has the capacity to raise 11,970 grow-finish hogs annually. The farm model also has the potential to produce four different crops on six different land types. A nonlinear math-programming model was developed to determine the optimal mix of management activities for a phosphorus-based regulation. The model allows mitigation of compliance costs via the choice between four different pig diets, three alternative methods of manure disposal, changes in timing of manure application, and crop pattern adjustments. This analysis concludes that the new regulation will result in a decrease in whole-farm returns above variable costs, the use of phytase enzyme in pig diets, and an increase in wheat acreage. The model also reveals that it is optimal for the farmer to hire a custom hauler to assist in application of manure in an effort to reduce the degree to which available field days constrain farming activities and land application of manure. The estimated cost to the farmer, as a result of the policy change, ranges between $0.56 and $21.74 per unit of pig production capacity.

We investigate food preference changes in Russia that may have resulted from political, economic, and other changes. Our empirical framework utilizes advances in consumer theory and exploits provincial-level panel data on food consumption and supply shifters to identify price and income effects. Our findings indicate that consumers underwent a structural preference change that began in 2007 and continued into 2014. To illustrate the magnitude of this change, we contrast economic effects for select food commodities across regions. The new insights will be useful in designing timely and effective food and trade policies, as well as informing strategy decisions of agribusiness industry players.

Energy supplementation provides a means of reducing production risk of growing stocker cattle on winter wheat pasture. This study addresses the issue of risk aversion and energy supplement input use. Differences in supplementation practices induced by risk aversion and the effects of cattle and feed market conditions are examined. Results show that supplementation practices are likely to be similar across producers, irrespective of their risk attitudes. Cattle and feed market conditions, however, markedly affect supplementation practices. These findings provide information for assisting stockmen in identifying efficient supplementation strategies.

Search theory is used to present a theoretically defensible model to examine the effectiveness of use value assessment (UVA) in preserving farmland. The model is empirically tractable and supports the findings of past research. The analysis considers the impact of farm income, uncertainty, and the distribution of the offer price on the effectiveness of UVA in preserving farmland and shows, through the effect on the reservation price, that for a given distribution of the offer price, property-tax rate, and the difference between market-value and use-value of land, the preservation of agricultural land only takes place within a relevant range.

Forecasts of economic time series are often evaluated according to their accuracy as measured by either quantitative precision or qualitative reliability. We argue that consumers purchase forecasts for the potential utility gains from utilizing them, not for their accuracy. Using Monte Carlo techniques to incorporate the temporal heteroskedasticity inherent in asset returns, the expected utility of a set of qualitative forecasts is simulated for corn and soybean futures prices. Monetary values for forecasts of various reliability levels are derived. The method goes beyond statistical forecast evaluation, allowing individuals to incorporate their own utility function and trading system into valuing a set of asset price forecasts.

This study developed an intertemporal profit function to determine optimal conservation adoption strategies under alternative scenarios with respect to crop prices, relative yields, discount rates, and other assumptions. Special emphasis was placed on determining from the analysis when the switchover from conventional to soil-conserving practices should take place. Technological change was incorporated by allowing crop yields to vary over time. Our analysis thus provides a new, more precise measurement of the cumulative net benefit differential. The optimal period for switchover from conventional to soil-conserving practices was found to vary depending on the assumptions made about corn prices and discount rates. Empirical results were based on an erosion damage function (EDF) for Western Kentucky corn production.

Laboratory market experiments are used to estimate the incidence of a stylized subsidy in factor market negotiations with university student and agricultural professional subjects. In separate sessions with both groups, prices converged approximately four and a half tokens higher when a 20-token per-unit subsidy was paid to buyers; this equates to 44% of the predicted 10-token split. A proportional market incentive treatment clarifies this subsidy effect. Discrepancies between predicted and observed incidence are similar to previous empirical estimates of subsidy incidence in agricultural land rental markets. A behavioral anomaly as well as buyer-buyer market competition may contribute to experimental results.

Livestock rations are formulated to minimize feed cost subject to nutritional requirements for a target performance level, which ignores the potentially substantial cost of disposing of nutrients fed in excess of nutritional requirements. We incorporate nutrient disposal costs into a modified least-cost ration formulation model to arrive at a joint least-cost decision that minimizes the sum of feed and net nutrient disposal costs. The method is demonstrated with phosphorus disposal costs on a representative dairy farm. Herd size, land availability and proximity, crop rotation, and initial soil phosphorus content are shown to be important in determining phosphorus disposal costs.

Economists and others need estimates of future cash price volatility to use in risk management evaluation and education programs. This paper evaluates the performance of alternative volatility forecasts for fed cattle, feeder cattle, and corn cash price returns. Forecasts include time series (e.g. GARCH), implied volatility from options on futures contracts, and composite specifications. The overriding finding from this research, consistent with the existing volatility forecasting literature, is that no single method of volatility forecasting provides superior accuracy across alternative data sets and horizons. However, evidence is provided suggesting that risk managers and extension educators use composite methods when both time series and implied volatilities are available.

We combine econometric and financial analyses of the NAHMS 2000 Swine Surveydata to examine whether evidence exists for reducing risk by usingantibiotics for growth promotion (AGP) in the U.S. swine industry. Astochastic dominance analysis of alternative lengths of time (days) of AGPapplication reveals that AGP used in the range of 65–75 days is preferred byrisk-averse producers. Risk is reduced and profits are increased from use ofAGP. The combined impacts of increased average daily gain and decreasedvariability in pig live weight increase producer profits by $2.99 per pigmarketed.

Hedonic price models are estimated to determine if there are incentives to supply higher quality tomatoes. Price premiums are associated with extra-large tomatoes originating from shipping points located closer to consumption points. Price differences between mature-green and vine-ripe tomatoes are not significant. Vine-ripe tomatoes are favored by consumers in the summer while mature-green tomatoes are favored the rest of the year. The U.S. Department of Agriculture should consider changing the present tomato grading system, which is based on shape and smoothness, to include a flavor indicator based on harvest maturity.

Concerns over declining farm numbers, shifts in farm size distribution, and associated infrastructural problems have led to a heightened awareness of structural considerations within policy making circles. Future policy decisions will have substantial structural consequences for the agricultural industry. Often, however, the indirect effects of grain pricing policies on the livestock sector have been overlooked in these policy decisions. The incorporation of price effects into a Markov chain analysis of pork farm size distributions and the simulation of those projections to the year 2000 under various price scenarios should provide some insight into the future structure of livestock farming in the South.

The importance of the role played by household size and the age-sex characteristics of household membership in consumer expenditure and demand studies has been discussed by Barton, Blokland, Buse and Salathe, McClements (1977), Muellbauer (1974, 1980), Prais and Houthakker, and Price.

This study uses a mixed logit model to analyze monetary and nonmonetary factors that influence location choice behavior of the U.S. Gulf of Mexico shrimpers. Shrimpers' responses to economic conditions are compared and contrasted for two periods related to changing economic conditions in the industry. Results show that even though shrimpers are generally revenue driven in choosing a fishing site, their past experience also plays an important role. Further, changes in economic conditions appear to exhibit an influence on the risk attitudes of some shrimpers.

As the hunt for renewable energy sources from agriculture intensifies, many agricultural producers are contemplating what crops to grow in the foreseeable future. On the one hand, there are traditional food crops, such as soybean, corn, and wheat, which have recently enjoyed a spike in prices, primarily because of the seemingly ever-growing demands of the corn to ethanol industry. On the other hand, there are the lesser-known perennial energy crops, such as switchgrass. Although much information on various aspects of switchgrass production exists, this paper discusses the adaptation of existing production and processing information to Arkansas conditions as a potential alternative to crop production.

An expected utility model that includes output price and yield uncertainty was used to estimate cotton, com, and soybean acreage response equations for the Southeast. The model appeared to fit the soybean and corn data well, resulting in own-price elasticity estimates of 0.317 for com and 0.727 for soybeans. When applied to cotton acreage, however, the model did not yield satisfactory results. When elasticity was allowed to change over time, however, statistical results for the cotton equation improved, yielding an own-price elasticity of 0.915 at data means.

Many areas of the US recently endured a severe drought and management strategies to cope with the lack of forage production varied. A multi-period mathematical model is presented that estimates the outcomes of two common producer responses to changes in precipitation, partial liquidation and purchasing hay, given fluctuating cattle prices over a long term planning horizon. Results were further summarized with regression analysis and selected elasticities were calculated to reflect the sensitivity of outcomes to variability in precipitation and livestock prices. Although little impact was seen from utilizing additional hay as a strategy during drought, producers who follow this strategy are in a position to market more animals immediately post drought in general, resulting in better long run financial outcomes. Elasticity estimates suggest that profitability is more sensitive to variability in prices but that optimal choices of management strategies are more sensitive to variability in precipitation.

This paper presents findings from an analytical scheme that offers a promising alternative to traditional procedures of modeling acreage response. The scheme addresses the two-step decision process in which program and nonprogram planting decisions are modeled separately, conditional on the decision to participate. This provides a more realistic and intuitive portrayal of producers' decision making process. The model is applied at the regional level to assess the impact of farm programs on acreage response for corn in the Cornbelt and Lake States, and for wheat in the Northern Plains. The impacts of policy variable changes on participation and planted acreage are also analyzed.

Many farmers face borrowing limits that depend on their household income and net worth. Given such credit constraints, an increase in off-farm income should allow farmers to borrow more, thus influencing production decisions and productivity. To test this hypothesis, the education level of the farm operator’s spouse is used to identify exogenous variation in off-farm income. Findings indicate that higher off-farm income leads to more borrowing, capital expenditures, capital input intensity, farm labor use, output, farm income, and productivity. Results suggest that Federal programs that promote access to credit for limited-resource farmers may increase farm investment and productivity.