The 1985 Farm Bill departs from recent farm bills in moving toward more restrictive acreage control. The change from a two- to a five-year average in calculating base acreage and enforcement of limited cross-compliance appear to significantly alter crop mix decisions on representative Alabama cotton farms.

This study investigated the cost structure of the floriculture industry in the United States. Economies of scale and input elasticities were estimated with a normalized quadratic cost function. Results suggest that economies of scale exist in the floriculture industry. As producers become large and more automated, they have a cost advantage relative to smaller producers who are producing the same output product mix. The existence of economies of scale suggests that average grower size can increase in the future as growers increase in size to take advantage of cost efficiencies.

This study investigated farmers' incentive to forward purchase inputs. A model of farmer decision making was used to derive an optimal forward contracting rule. Explicit in the model was the tradeoff between the quantity of input to be purchased in advance, and the remaining portion to be purchased later on the spot market. Results indicated that the primary reasons farmers contract inputs are to reduce risk and to speculate on favorable price moves. A numerical example of fertilizer used in corn production indicated that the size of the price discount was the dominant factor in forward contracting decisions.

Monthly observations on prices from 10 weight/gender classifications of Nebraska beef cattle are studied in an error correction model (ECM) framework. This study attempts a replication of the 2003 paper on Texas prices by Bessler and Davis, where they find medium heifers (600-700 1b) at the center of price discovery. Using the ECM results Nebraska light steers are found to be weakly exogenous, with the innovation accounting results showing marked differences. Industry structure, production choices, and animal type and breeding herd differences between Texas and Nebraska are proposed as plausible reasons for partial (or incomplete) success at replication.

The roots and uses of economic experiments in problem solving and hypothesis testing are explored in the present article. The literature suggests that the primary advantage of economics experiments is the ability to use controlled stimuli to test economic hypotheses. Other literature also suggests that experiments are useful in problem solving settings. The advantages and disadvantages of experiments are discussed.

This study examines the Law of One Price (LOP) in international commodity markets using fractional cointegration analysis. For proper evaluation of the LOP, fractional cointegration analysis seems to be appropriate because of its flexibility in capturing a wider range of mean reversion behavior than standard cointegration analysis. Out of nine pairs of price series examined, fractional cointegration supports the existence of the LOP in eight cases, as compared to three cases using standard cointegration procedures. Overall, these results suggest that there is a long-run tendency for the LOP to hold for commodity prices.

Using input-output tables for 1972 and 1977 we examine direct and indirect energy use in the production of fourteen U.S. agricultural products. We find that between 1972 and 1977 energy use increased in absolute terms but decreased in terms of Btus required per dollar of output.

Although this trend is encouraging in terms of the long-run ability of U.S. agriculture to adjust to higher energy prices, the following caveats should be mentioned; (1) a large part of the decrease in primary energy intensity is attributable to one sector, meat animals, (2) there was a substantial increase in electricity intensity in almost all sectors, and (3) there was an increase in the use of energy embodied in fertilizers and agricultural chemicals in the very important food grain and feed sectors.

This paper considers methods to adversely select on Average Crop Revenue Election (ACRE) and Supplemental Revenue (SURE). In the case of winter wheat, farmers had a large amount of a priori yield and price information before electing 2009 ACRE. Prior to the August 14 sign-up for ACRE, wheat was 3 months into the marketing year. In most years nearly half of the national average price is determined in the first 3 months of the marketing year. With this available information it was clear that Oklahoma, Texas, and Washington wheat would collect the maximum or near the maximum ACRE payment, while there was little chance that ACRE would pay on Colorado wheat.

Farmland reallocation between farmers through rental transactions is critical for improving Japanese rice productivity. This study examined effects of socio-institutional and emotional factors as well as economic factors on rental transactions. A stochastic choice model was applied to contingent valuation data by considering regional heteroscedasticity. Empirical results showed (1) existence of economic inefficiencies, 3% loss of economic surplus due to socio-institutional restriction, which is probably reflected in transaction costs; (2) a 15% reduction in surplus due to emotional reluctance of farmers; and (3) strong influences of rice price, wages, and geographical location on the rental rate and agreement level.

Herein we explore the economic value of delaying inevitable environmental damage due to aquatic invasive species, which is a problem especially relevant to tropic and subtropical regions. We developed an analytical framework and tested it using a stated preference survey. The results suggest that delaying the impacts can be valuable. Other tests reveal characteristics of the willingness-to-pay estimates that are consistent with economic theory.

Since the early 1970s, the economic environment and the agricultural sector in particular have been characterized by constant change. Technologies are rapidly changing from the farm level through the various processing stages to the marketing of food products. New food products and markets, both domestic and international, are continuously emerging (Connor). Unprecedented linkages to world markets and to domestic macroeconomic policies have also been factors shaping the agricultural and nonagricultural sectors in the past 10 to 15 years. For the most part, the effects of these changes on the demand for agricultural products have not generally been empirically determined. Little attention has been paid to keeping abreast of changes and their implications for farmers and processors in any systematic fashion.

The effects of the exchange rate, the U.S. agricultural price, the domestic income, and the interest rate on the U.S. net farm income are investigated in a cointegration framework. For this purpose, the Phillips-Hansen fully-modified cointegration (FM-OLS) procedure is applied to annual data for the period 1957-2008. Results suggest that there exists the long-run equilibrium relationship between the U.S. net farm income and the selected macroeconomic variables. We also find that the exchange rate and U.S. agricultural price are more important than other variables in determining the U.S. net farm income.

The study uses interval regression to investigate factors affecting farmers’ willingness to pay for soil testing services in Northern Haiti. The model reveals that factors such as the type of crops grown, group membership, farmers’ educational level, access to credit, gender, contact with extension services or any institution, type of soils, income level, participation in soil testing program and farm size affect the amount to be paid for soil testing services. These results imply that the training module on soil testing and financial support in form of subsidies or access to credit should be provided to farmers.

State marketing programs for food and agricultural products are largely driven by consumers’ desires to purchase in-state products. Evaluations of state marketing programs have largely ignored consumer location and proximity to surrounding states, measures of ethnocentrism, and the presence of other geographic marketing labels. This study examines willingness to pay for own and out-of-state labels for a generic commodity, milk, within an eight-state region. The results show that an aggregate model conceals consumer heterogeneity in marginal willingness to pay values for state brands as compared to a disaggregate model, even when using random parameter logit models.

The production structure of 165-hen and 200-tom turkey flocks is investigated using a translog (dual) variable cost function. The partial static equilibrium elasticities of scale, input demand, input substitution, and cross price elasticities of demand are calculated. The elasticity of scale is found to be not significantly different from one over the range of 5,900 to 9,822 birds for the hen flocks and over the range of 7,765 to 11,043 birds for the torn flocks. In general, the input demand elasticities are inelastic with the exception of the input fuel. The cross-price elasticities are in general inelastic.

This paper examines the issues surrounding the patenting of life forms, specifically the social and private costs and benefits of the Plant Variety Protection Act (PVPA) (Plant Variety Protection Act, 1970). The PVPA is a current issue, encompassing all the elements of the economic, social, and moral controversy aroused by the broader issue of patenting life forms generally.

The subsequent sections of the paper outline the specific issues surrounding the PVPA, discuss the issue of plant patenting, present the arguments favoring and opposing plant patenting, and, finally, present an analysis of the major issues of the PVPA.

The proposed Free Trade Area of the Americas would join the world's two largest processed orange producing regions: Brazil and the United States. Because the United States currently imposes a sizeable tariff on imported processed orange products, there is concern by U.S. orange growers over possible adverse effects resulting from tariff elimination. A model of the world processed orange market is developed as a spatial equilibrium model with implicit supply functions based on the dynamic behavior of orange production. The model is used to estimate the impact of U.S. tariff elimination on U.S. production, grower and processor prices, and imports. The results suggest a sizeable price impact on U.S. producers if the tariff is eliminated.

One of the U.S. Department of Agriculture Rural Development's most popular programs is the funding for public water and sewer infrastructure projects in rural communities. This article reviews the water and sewer infrastructure projects funded in the state of Oklahoma between 1990 and 2000 and evaluates their impact on different measures of economic growth over both the short (one to 10 years) and long (10 to 20 years) term. Evaluation techniques include multivariate regression and average treatment effects. Results suggest that although most economic growth measures (population, income levels, and poverty levels) are not impacted by the program, housing values do show a statistically significant increase in communities receiving water or sewer infrastructure funding over the long term.

Federal subsidies for nonprice export promotion of farm products have been criticized on the grounds that they merely substitute taxpayer dollars for private promotional expenditures. This “displacement hypothesis” is tested by estimating export demand and advertising-goodwill re-lations using time series data for 1975-2008. The displacement hypothesis receives some support in that three of the nine tests show an inverse relationship between industry and government expenditures. However, the remaining tests show no relationship. These results, coupled with the finding of Kinnucan and Cai (2011) that expenditures for export promotion may be too high when consumer impacts are taken into account, suggest it is time to let the Market Access and Foreign Market Development programs operated by the U.S. Department of Agriculture lapse.

This study compares equivalent annual rents for two alternative land uses in a region where farming and timber plantations coexist. The comparison is motivated by the possibility that rising timber prices may stimulate timber processors to compete for farmland. Prices, costs, and market rents are assumed to first follow existing trends and then to reach steady state values. Market rents are projected and capitalized for agriculture. Internal soil rents are capitalized for timber. The results show timber to have a comparative advantage on high fertility sites and suggest that timber might become a competitive land use at the intensive margin of the region's farmland base.