The most useful and practical strategy available for reducing variability of net farm income is ascertained. Of the many risk management tools presently available, five of the most commonly used are simultaneously incorporated in an empirically tested model. Quadratic programming provides the basis for decisionmaking in risk management wherein expected utility is assumed to be a function of the mean and variance of net income. Results demonstrate that farmers can reduce production and price risks when a combination strategy including a diversified crop production plan and participation in the futures market and the Federal Crop Insurance Program (FCIP) is implemented.

Two major programs — allotment-quota and price support — have been in force to support peanut farming since 1952. The purpose is to restrict production of peanuts while supporting the price of peanuts produced. Production is restricted through the allotment-quota program, determined by the Secretary of Agriculture, and converted to a national acreage allotment. However, minimum national acreage allotment has been fixed at 1.61 million acres. The price support program provided that price be supported no lower than 75 percent of the parity price of peanuts. Under the programs, peanuts produced by the grower are sold on the market at the support price for edible uses and excess quantities are sold to the government at the support price. Peanuts purchased by the government are stored and later sold for crushing at the going market price. Because peanuts for crushing command a much lower price than the government acquisition price, the purchase-and-resale operation results in a net loss representing public cost of the peanut price support program.

Previous empirical studies of school choice have been at the national level, or have focussed on northeastern states. We estimate the demand for private education in rural Georgia, using proportion of private school attendance as an indicator variable. We find that income, tuition, race and school quality are important choice determinants. The results provide useful information for rural school administrators, and suggest that a tuition tax credit would have to be substantial to cause a significant exodus from public schools.

The Risk-Rating Model is designed to give extension specialists, teachers, and producers a method to analyze production, marketing, and financial risks. These risks may be analyzed either individually or simultaneously. The risk associated with each enterprise, for all combinations of enterprises, and for any combination of marketing strategies is estimated. Optimistic, expected, and pessimistic returns above variable cost and/or total cost are presented in the results. The probability that total return will be equal to or greater than variable cost and/or total cost is also estimated.

Acceptance and increased interest in rural development as a legitimate concern of land grant institutions is well documented. Although rural development research is not “new” for the discipline of agricultural economics, there is little doubt that the area has experienced renewed and greatly expanded interest at both the national and regional levels by the passage of the 1972 Rural Development Act.

While much has been written on the importance and need for a direct frontal attack on this traditionally underfunded and low priority research area, the sad fact is that the profession is still without a clear sense of direction regarding research and extension needs and priorities. The establishment of state and regional rural development centers is a positive step toward directing and coordinating the limited resources available in this area. Many southern states have demonstrated significant leadership roles in this first step, obviously recognizing the massive rural development problems of the region.

Promotion programs that subsidize advertising for exported agricultural products continue to be used despite much criticism that they are an inefficient use of taxpayer money. At the same time, others have advocated for an increase in funds to support domestic advertising for fruits and vegetables. We investigate the economic and nutritional effects from changes in both export and domestic promotion expenditures for horticultural and nonhorticultural commodities. Simulation results show that even modest decreases in trade promotion expenditures coupled with a corresponding increase in domestic promotion efforts have the capacity to influence domestic market conditions, caloric intake, and nutrient consumption.

Price equations incorporating USDA October crop forecasts and June pecan stocks provided reasonable formulations for pecan price explanation and forecasting. USDA crop forecasts exceeded final reported production in 12 of the 18 seasons from 1970 to 1987, probably resulting in slightly lower prices and crop values. Large crop forecast errors in both direction and level in 1986 and 1987 confounded the price determination process. Nevertheless, producer prices may have been lower absent the October crop forecasts, which somewhat reduce buyers' uncertainty regarding supply. Early crop estimates provided a better explanation of price behavior than postseason revised production data.

An econometric model of the dairy industry was used to estimate the effects on farmers, consumers, and taxpayers of nationwide adoption of the California nonfat solids standards for fluid milk. It was estimated that adoption of the California standards would raise farm-level milk prices by 1 to 5 percent in the short run and by 1 to 2 percent in the long run. The average retail price of fluid milk would rise by 9 to 13 cents per gallon. Dairy program costs fall under most scenarios, but could rise if surpluses fall to levels that would trigger increases in the support price.

This paper introduces and briefly discusses the economics of two important trade and environment policy issues--international harmonization of environmental standards and the use of trade measures for environmental purposes. Both issues are likely to generate lively international debate among environmentalists, industry representatives, and trade negotiators over the next few years. As the international community seeks new multilateral rules in these areas, agricultural producers will want to know how they will be affected. Thus, this paper also examines the potential impacts of environmental policy on the competitiveness of commodities unique to the Southern region of the United States.

In recent years, significant changes have taken place in the food consumption patterns of American consumers. Evidence indicates that the ongoing changes in U.S. household food expenditure patterns occurred in response not only to sudden increases in food prices in the early 1970s and the recent salient inflationary period (Buse and Fleischner; Salathe), but also to demographic shifts, tastes, and preferences (LeBovit).

Natural causes (such as droughts), non-natural causes (such as competinguses), and government policies limit the supply of water for agriculture ingeneral and irrigating crops in particular. Under such reduced water supplyscenarios, existing physical models reduce irrigation proportionally amongcrops in the farmer's portfolio, disregarding temporal changes in economicand/or institutional conditions. Hence, changes in crop mix resulting fromexpectations about risks and returns are ignored. A method is developed thatconsiders those changes and accounts for economic substitution and expansioneffects. Forecasting studies based on this method with surface water inGeorgia and Alabama demonstrate the relative strength of econometricmodeling vis-à-vis physical methods. Results from a study using this methodfor ground water in Mississippi verify the robustness of those findings.Results from policy-induced simulation scenarios indicate water savings of12% to 27% using the innovative method developed. Although better irrigationwater demand forecasting in crop production was the key objective of thispilot project, conservation of a valuable natural resource (water) hasturned out to be a key consequence.

In his recent article, Onianwa used the absolute price version of the Rotterdam demand model to estimate Mexican and Canadian import demands for U.S. beef products. The specification of the Rotterdam model allows straightforward testing of the basic theoretical properties of demand. Based on theory, a system of demand equations should obey adding up, homogeneity, symmetry, and negativity (Theil 1971, 1975; Deaton and Muellbauer). Adding up is guaranteed or automatically satisfied in the Rotterdam model and other similar demand models like the almost ideal demand system (AIDS). Hence, adding up cannot be tested. Negativity can be checked by calculating the eigenvalues of the Rotterdam Slutsky matrix (all eigenvalues should be nonpositive). The remaining two properties, homogeneity and symmetry, can be straightforwardly tested by using the likelihood ratio test, as in the present paper, or the Wald or Lagrange multiplier tests; homogeneity can also be tested separately for each demand equation using the F-test.

Product placement survey data for 192 Asian-American households in Houston were used to analyze the value of rice quality attributes via the Consumer Goods Characteristics Model (CGCM). Five rice varieties were used for this study: domestic Lemont, Jasmine 85, Toro II, and two different Thai import varieties. For each variety, marginal implicit prices were calculated at the means for seven characteristics: color, texture, aroma, stickiness, flavor, aftertaste, and moisture.

Industrialization of the food and agricultural sectors changes the pattern of external effects. Participants helped or harmed in the process attempt to influence outcomes through markets and politics. Decisions about property rights and boundaries determine benefits and burdens and the relative cost of animal agriculture in different jurisdictions. Prescriptions to redefine property rights are influenced by selective perception of rights to share in the benefits and be protected from costs. Political choices about the appropriate jurisdiction (state versus local) for addressing environmental and nuisance effects of animal agriculture affect whose preferences count and will influence the development of these sectors.

In his 1967 presidential address to the AAEA, Charles E. Bishop raises the question: “Why have agricultural economists not devoted more resources to the study of structural changes in rural communities and to public policies relating to the location of economic activity and of population?”. Later in the address, he partially provides the answer through the comment that “We must reorient our thinking in terms of location and scale of organizations and interrelations among firms and among communities … it will be necessary for us to make basic changes in our philosophical approaches to problems, our analytical tools,…”.

Results indicate that productivity growth has been a prime factor in Florida's ability to retain a competitive position in the United States domestic fresh winter vegetable market. Total factor productivity indexes and productivity growth rates are estimated for the production of four major vegetable crops in one or more of four production areas in Florida. Florida producers have exhibited substantial productivity growth over the 1969-70 to 1981-82 period.

Conversion of biomass to electricity is often not economically feasible as a result of large transportation costs and low output prices. We build a model of an adaptable biorefinery situated at an agri-processing facility that already has biomass on-site and consider the optimal scale of the plant to achieve a price premium by selling peaking power given uncertain biomass deliveries year over year as a result of climatic variability. We find that, for conservative electricity prices, a plant situated near cotton gins in Texas could operate with positive expected net revenue while converting on average only 38% of available biomass for peak electricity prices.

Policy analysis is complicated by the myriad of benefits and costs generatedby the use of natural resources. This study develops three benefits thatmust be considered in the granting of a consumptive use permit for waterfiled by Adena Springs Ranch, east of Ocala, Florida. This ranch is hopingto expand into grass-fat beef; but to do so, it needs additional water forirrigation. Specifically, our analysis considers the potential gain from theranch, the potential negative effect on existing permit holders andenvironmental uses of water, and the possible positive value generated bythe increased surface flow for other recreational users in eastern MarionCounty.

This study focuses on the development of a optimal harvest scheduling mathematical programming model which incorporates within-season changes in perennial crop yields. Daily crop yield prediction models are estimated econometrically for major commercially grown sugarcane cultivars. This information is incorporated into a farm-level harvest scheduling linear programming model. The harvest scheduling model solves for an optimal daily harvest schedule which maximizes whole farm net returns above harvesting costs. Model results are compared for a commercial sugarcane farm in Louisiana.

Crossing of breeds traditionally has been viewed skeptically by cattle producers. Although there has been some crossbreeding between traditional beef breeds, little use of dairy-beef crosses in commercial beef herds has been made. Often such calves have been inferior in quality and have yielded a lower return than the standard beef breeds.

Recently, however, considerable research attention has focused on crossbreeds – crossing standard beef breeds, dairy and beef, and standard and exotic (or new) beef breeds. When all three genetic types are crossed, several positive features have been identified: (1) quality is good – few animals grade prime but most finish at satisfactory weights as high good or choice; (2) greater milking capacity of the part-dairy cow increases the potential for rapid gains, thus permitting more beef to be raised per cow, and (3) genetic growth capability of some exotic breeds is greater so such crosses can take advantage of additional milk.