A stochastic budget simulator and generalized stochastic dominance are used to compare the risk management properties of grazing contracts to futures and option contracts. The results show that the risks of backgrounding feeder cattle are reduced significantly for pasture owners in a grazing contract. However, the risks of the cattle owner in a grazing contract are not significantly reduced. The results also show that generally risk averse pasture owners prefer grazing contracts to integrated production when traditional hedging is used to manage price risks. In addition, grazing contracts compare favorably with put option contracts for some pasture owners.

The objective is to identify significant determinants of performance for food processing firms over the 1992 to 2003 time period, focusing particularly on the issue of family control. Variables measuring firm effects such as asset size, governance, income distribution, and risk are used to explain return on equity. This study builds upon previous research by including a measure of income distribution in the food processing industry. Governance variables are found to be significant determinants of return on equity. The results found no evidence of agency problems in family-controlled firms during this time period.

An interregional input-output model of the Monroe, Louisiana, Functional Economic Area constructed with IMPLAN is used to assess economic linkages between a small urban core and a surrounding rural periphery. The contribution of agriculture, especially in the rural periphery, to the urban core (Ouachita Parish) economy is demonstrated. Also assessed is the possibility of using the core's food processing sector to facilitate periphery economic growth. While results demonstrated stronger rural-urban linkages than have been found in other regions, growth in the urban food processing industry, as currently structured, did not imply rapid growth in the periphery.

Stochastic plateau production functions provide improved fertilizer recommendations based on multi-year agronomic experiments where weather and other stochastic variables change over time. This research assesses the profitability of no-tillage corn production in northeastern Colorado and determines economically optimal nitrogen fertilizer rates. It also proposes an alternative parameterization of the linear response stochastic plateau model which provides a robustness check against traditional parameterizations. Results show the current use of nitrogen fertilizer in the area exceeds estimated economically optimal levels. This suggests that a reduction in nitrogen use could increase expected profits and simultaneously reduce environmental costs.

The Great Plains is the most important wheat producing region in the United States. Dwindling returns and changes in government farm programs have reduced wheat acreage, raising concerns over its future viability. Small farms and marginal areas are particularly vulnerable, including the western Great Plains (WGP). To assess the technical and economic viability of wheat farms, the efficiency of 141 wheat farms in the WGP was estimated. Results found substantial inefficiency among all producer types. The largest source of inefficiency was input use among smaller farms. The smaller farms were the most scale efficient, reducing concerns over their future viability.

This paper examines the impact of federal fiscal-monetary (FM) policy on farm structure. FM policy is multifaceted but is confined here mainly to policies influencing aggregate demand. Inflation is defined as an increase in the general price level. Farm structure refers to farm size and numbers, tenure, legal organization, investment, capital-labor ratio, productivity, and status (part-time or full-time farming).

Stochastic Efficiency with Respect to a Function (SERF) is used to rank transgenic cotton technology groups and place an upper and lower bound on their value. Yield and production data from replicated plot experiments are used to build cumulative distribution functions of returns for nontransgenic, Roundup Ready, Bollgard, and stacked gene cotton cultivars. Analysis of Arkansas data indicated that the stacked gene and Roundup Ready technologies would be preferred by a large number of risk neutral and risk averse producers as long as the costs of the technology and seed are below the lower bounds calculated in this manuscript.

Three Georgia feeder cattle teleauction markets were analyzed from 1977 to 1988 to estimate the impacts of cattle characteristics and market conditions on prices. Cattle characteristic price impacts were similar to those in previous studies. The impact of feeder cattle futures price on teleauction price was positive but varied across markets. Optimal lot size ranged from 143 to 276 head. In one market, 14 lots were necessary to generate positive price impacts. Additional buyers were estimated to have a $.30/cwt per buyer impact on price.

This study examines the motivation behind contracts and vertical integration in the pork industry, and simulates the effects of potential improvements in coordination. Incentives related to lowering costs of measuring and sorting hogs, and protecting against opportunistic behavior associated with specific assets, can result in hog quality improvements. A framework for simulating the effects of increased coordination through contracts and vertical integration was developed and used to evaluate potential improvements in leanness. Although simulations suggest only modest changes in pork prices and supplies, gains in consumers' surplus could be substantial for larger demand shifts due to quality improvements.

The quantity of paper recycled in the U.S. has more than doubled since 1985. International trade theory predicts that this will lead to reduced imports of paper, and a shift in domestic production toward waste paper intensive outputs (e.g., newsprint) and away from higher grade products such as printing/writing paper. Import demand elasticities with respect to input prices were estimated for newsprint, printing/writing, and all paper utilizing 20 years of monthly data. The empirical results confirm the predictions of theory, and illustrate a channel through which recycling may be more beneficial for U.S. industry than the domestic environment.

Producers' preferences for cottonseed with respect to price, seed type, yield, and fiber quality are examined by a willingness-to-pay approach via mail surveys. Results indicate a positive willingness to pay (WTP) for technology relative to conventional cottonseed, and WTP increases with the level of technology. Yield and quality also show a positive WTP. Larger farms have a higher WTP for technology, and farms with more farm labor have a lower WTP for technology. These results suggest economies of size in technology adoption (biotechnology is not size-neutral) and that labor and biotechnology are direct substitutes.

Bovine somatotropin (BST), a new technology capable of enhancing a cow's ability to produce milk by 7-23 percent, is expected to be available for commercial use soon. Ex ante survey procedures are used to determine the potential effect of BST on the size distribution of dairy farms in the Southeast. Results of logit analysis indicate a positive link between farm size and (1) farmers' knowledge of BST and (2) intentions to adopt early, suggesting BST will not be scale neutral. An estimated “price elasticity” of -1.8 to -2.1 indicates an elastic demand for the input Price, therefore, may be an effective instrument for attenuating the scale bias.

In this article, we examine disclosure as a tool to mitigate the effects of asymmetric information in a Thoroughbred yearling market. If disclosures influence market price, information contained therein must be valuable to buyers and hence diminish asymmetric information. Using public auction data, we find that disclosures do not influence price in a segment of the auction in which an implicit quality certification is available. However, in the other segment, we find evidence that some disclosures may provide valuable information to buyers.

This paper considers an application of the differential approach to Japanese demand for beef imports from 1970 to 1993. Results of homothetic demand and negative (significant) own-price elasticities indicate that the Japanese did not discriminate against Australian beef, but the decrease in Australia's trade shares was due to changes in relative prices.

DuPont Quality Grains is focused on improving grain quality for end users, rather than on farm production traits. A major DuPont program is high oil corn. Feed corn has a huge market, and, because it requires no intermediate processing, any enhanced value is measurable by end users. Standard commodity markets do not function for capturing the value of enhanced grains, and so DuPont works with end users, elevators, farmers, and seed companies to create market channels. As biotechnology commercializes more value-enhancing traits targeted to specific agricultural customers, vertical value chains will become shorter and more coordinated while standard commodity markets will diminish.

Extension faculty have been educating cow-calf producers about value-added calf management programs and the premiums available at auction from these management practices for years. Despite these efforts, producers express doubt regarding the likelihood of premiums and the profitability of value-added management practices. We use matching pairs to calculate the difference in premiums and net returns between adopters and nonadopters and calculate the likelihood of positive net returns (and premiums) for individual practices and practice bundles. The probability of positive net returns ranges from 57% for dehorning to 79% for a certified vac-45 program (calves certified by a third party to be preconditioned for a minimum of 45 days, vaccinated, and dehorned) and probabilities increase with more practices adopted.

Market channel alternatives that include garden centers, landscapers, mass merchandisers, and rewholesalers have contributed to the growth of ornamental crops sales in the United States. The impact of growers' business characteristics on shares of sales to these channels by firm size was estimated using the two-limit Tobit model. Important explanatory variables were regions of the United States, sales of plant groups, kinds of contract sales, and channel diversity. There were important differences in behavior by grower size. Overall, the results indicate a stronger than expected role for the rewholesaler channel as a preferred channel for ornamental plant sales.

This study estimates the contribution of both urban-rural fringe location and lake proximity on residential property values in three upstate counties of South Carolina through estimation of spatial hedonic housing price models. Location in the urban fringe and the urban–rural interface are found to have a positive impact on residential housing values relative to either urban or more rural locations. Lakes in the upstate contribute positively to housing values to the extent that the house has a view of a lake, lake access, or lake frontage.

Key determinants of monthly wholesale prices for 12 beef cuts include the quantity of the specific cut, stickiness in prices, marketing costs, quantities of pork and chicken, and seasonality. Seasonal patterns across the respective cuts are very different. Relative to the price in December, prices at the wholesale level in other months can be as much as 6 percent lower to as much as 21 percent higher.

In August 1994, the Secretary of Agriculture announced the termination of the marketing order and the associated flow-to-market, or prorate, controls for fresh California and Arizona (CA/AZ) lemons. Lemon growers and handlers have expressed concern over the impact of this decision on retail-FOB margins. This study presents an econometric model of fresh lemon marketing margins that tests for the presence of buyer and seller market power during previous periods of marketing order suspension. The results show that buyer and, to a lesser extent, seller market power cause retail-FOB margins to widen during periods of prorate suspension.