This study analyzes the potential risk-reduction gains from naive diversification among market advisory services for corn and soybeans. The total possible decrease in risk through naive diversification is small, mainly because advisory prices are highly correlated on average. Moreover, because marginal risk-reduction benefits decrease rapidly with size and the cost of holding the portfolios increases linearly due to services' subscription fees, it is optimal to limit portfolio size to a few advisory programs. Based on certainty equivalent measures and two representative risk-aversion levels, preferred portfolio sizes are between one and three programs.

Student evaluation of teaching (SET) is employed as an aid in improving instruction and determining faculty teaching effectiveness. However, economic theory indicates the existence of externalities in SET scores that directly influence their interpretation. As a test of this existence, a multinomial-choice, ordered data estimation procedure is employed to identify course externalities influencing SET. These externalities include student class standing, required courses, class size, days a class meets, class meeting time, classroom location, and classroom design. Results indicate that externalities have a significant impact on teaching evaluations. Thus, failure to internalize these externalities will lead to biases in SET and questionable use of SET as an aid in instruction improvement and determining faculty effectiveness.

Environmental and consumer groups have called for mandatory labeling ofgenetically engineered (GE) food products in the United States, stating thatconsumers have the “right to know.” Herein, we use a nonhypothetical fieldexperiment to examine the willingness to pay for GE-labeled products, usingthe only second-generation GE product currently on the U.S. market—GEcigarettes. Our results suggest consumers pay less for GE-labeled cigaretteswhen marketing information is absent. But, when presented with marketinginformation on the attributes of the cigarette, we find no evidence thatconsumers pay less for GE-labeled cigarettes.

Florida's open-space land-acquisition program is one of most aggressive in the country, with $3.7 billion paid for 3.8 million acres since 1972. Using data from the Conservation and Recreational Lands (CARL) program, hedonic analyses found that acquiring private lands with valuable natural resources, habitat for rare species, and important historical sites for public preservation is more costly. Development potential and pressure also increased acquisition costs. The presence of additional endangered natural elements and needing to contract with additional landowners, however, were found to decrease the cost. Results provide a basis for landowners and land-acquisition agencies to negotiate.

Agriculture has seen a steady movement toward the increased use of contracts. Agricultural contracts now guide the interrelationships of parties throughout the modern production system, extending well beyond the livestock sector. With this predominance come new issues that require us to reexamine contract theory and the roles of the parties. This review examines legislation, regulations, and recent court rulings in seemingly unrelated areas that have specific relationships to the development of contracts in production agriculture: environmental law and labor law.

Job satisfaction is likely the most studied work-related attitude and isassumed to influence a variety of behaviors. This study analyzes the jobsatisfaction of agricultural employees using Herzberg's theory, which isbroadly employed in management. Fourteen horticultural businessesparticipated in case studies of labor-management practices. Fifteennonsupervisory employee interviews were analyzed regarding job satisfaction.Components of job satisfaction relevant to horticultural employees werefamily-business values, achievement, recognition, work itself, involvement,personal life, interpersonal relationships, job security, supervision,working conditions, organization, safety, compensation, and information.While support for Herzberg's theory is weak, it is useful for classifyingemployees' attitudes.

The poultry industry is the most vertically integrated of U.S. agriculture and food production and is rapidly progressing toward being one of the most concentrated. In 2002, the top 15 broiler states accounted for 94.4% of U.S. production. From 1982–2002, the top four broiler firms had a fivefold increase in Ready-to-Cook (R-T-C) pounds, a tripling of plants and four- and eight-firm concentration ratio increases of 27.9% to 48.2% and 44.1% to 66.6%. In a broad sense, chicken became more affordable, appealing, and available; total R-T-C pounds increased from 234 to 663 million pounds between 1982 and 2002.

With increasingly thin margins and new technologies, it is important that farm managers know their cost of field operations on a per unit basis (e.g., acre, ton, bale). Accurate per unit costs give confidence when constructing enterprise budgets and evaluating new technologies, such as no-till. Custom rates are often used as a proxy for per unit costs; however, this research, using entropy and jackknife estimation procedures, found that custom rates understate total ownership and operating costs by approximately 25% for an average Kansas farm. Estimates from these models are then used to benchmark actual costs against expected cost.

Forward pricing behavior of random samples of Indiana, Nebraska, and Mississippi crop producers was analyzed using Heckman's two-step limited information maximum likelihood estimation procedure. Producers who forward priced during the 1995–1998 period generally expected to forward price in 1999 using similar techniques. Probit models were estimated for cash forward contracts and taking a direct position in futures or options separately and combined. Results provide limited support for the hypothesis that forward pricing should be analyzed as an adoption decision. Variables reflecting risk attitudes do affect the decision to use forward pricing, while variables related to economic position affect the level of forward pricing.

The probability of a business paying various amounts of money for ane-commerce presence ultimately depends on demographic features, experienceswith e-commerce from a buyer's and seller's perspective, technologicalexpertise, and knowledge of e-commerce opportunities and limitations.Estimating functions to assign probabilities associated with the willingnessto pay for an e-commerce presence will assist in forecasting regionallikelihood of certain profiles paying various monetary amounts for ane-commerce presence. In addition, if services are provided at no cost by athird party, value to a society will be maximized by selecting profiles withthe highest willingness to pay.

This paper examines the industrialization process of U.S. agriculture by examining the trends in the number of farms, the concentration of production during the last decade, and the dynamics of farm survivability, entry, and exit underlying aggregate statistics. We next examine vertical coordination as part of the industrialization process and highlight contracting in the poultry industry. The analysis provides evidence that production is continuing to be concentrated on a smaller number of farms at a relatively rapid rate, in spite of the stability in the number of farms. Although contracting clearly dominates the broiler industry, it is less prevalent in egg and turkey production, where other forms of vertical coordination are likely established.

Herbicide-resistant (HR) rice technology is a potential tool for control of red rice in commercial rice production. Using an ex ante mathematical programming framework, this research presents an empirical analysis of HR rice technology adoption under uncertainty. The analysis accounts for stochastic germination of red rice and sheath blight to model a profit maximization problem of crop rotation among HR rice, regular rice, and soybeans. The results demonstrate that risk attitudes and technology efficiency determine adoption rates and optimal rotation patterns.

We analyze the effects of crop insurance and the Marketing Loan Program onoptimal nitrogen use and acreage allocation for a case cotton–sorghum farmin Texas. A mathematical programming model is used to solve for the optimalnitrogen fertilizer rate, crop acreage allocation, coverage level, and priceelection factor, along with participation in the crop insurance and theMarketing Loan Program for both crops. Results show that depending on thecrop and farmer risk aversion, these federal risk management programsincrease or decrease optimal fertilizer rates –6% to 3%, increase optimalcotton acreage 94% to 144%, and decrease sorghum acres up to 50%.

From production to retail, information systems have become increasingly important in the agrifood system. Retailers use information systems to improve inventory management and increase efficiency in production and logistics. Innovations in agribiotechnology and food safety issues highlighted by incidences related to Starlink corn and “mad cow disease” have raised consumer concerns about their food products. In addition to food safety concerns, consumers are increasingly willing to pay premiums for nonobservable quality characteristics in their food products. This paper outlines a framework for evaluating the implications of traceability for the organization of the agricultural system and highlights potential organizational responses to traceability issues.

The United States leads the world in agricultural biotechnology research, adoption, commercialization, and exports. Our biotech commodities are highly dependent on international markets. Thus, any biotech policy changes by key importing countries may affect U.S. agricultural biotech product exports. This article identifies key markets for U.S. agricultural exports including biotech commodities and discusses current and proposed biotech policies in key markets for U.S. agricultural exports focusing on Canada, Mexico, Japan, the European Union (EU), and China. Among these markets, labeling of biotech products is voluntary in Canada and Mexico but is mandatory in Japan, the EU, and, most recently, in China. For the EU, U.S. corn exports were almost completely shut out, while U.S. soybean exports also declined because of the EU's biotech policies. The World Trade Organization dispute filed by the United States has yet to be finalized. China's biotech regulations raised concern by U.S. agricultural exporters. However, through U.S. Department of Agriculture education programs, U.S.–China negotiations, and China's domestic soybean shortage, China's biotech regulations do not appear to have had long-run impacts on U.S. soybean exports to China.

This paper reports results from a U.S. national telephone survey ongenetically modified foods (vegetable oil, cornflakes, and salmon). Thesurvey featured a contingent valuation in which respondents chose betweenthe GM and non-GM alternatives with an option of indifference. The binomialand multinomial logit models yielded estimated willingness to pay (WTP) toavoid the GM alternatives. Respondents were willing to pay 20.9%, 14.8%,28.4%, and 29.7% of the base prices to avoid GM vegetable oil, GMcornflakes, GM-fed salmon, and GM salmon, respectively. The inclusion ofindifference option could increase the sample size and moderate the meanWTP.

Land use changes and timberland use by ownership and forest type in Alabama and Georgia between 1972 and 2000 are analyzed using a modified multinomial logit approach. Low average land quality, federal cost-share incentives, and favorable returns to forestry relative to agriculture were the main factors associated with timberland increase. Higher forestry returns helped increase industrial timberland but not nonindustrial private forests. An increase in hardwood forests at the expense of softwood and mixed forests was driven by increasing hardwood returns. Increasing softwood returns and tree planting assistance programs alleviated declines in softwood forests. Because factors influencing timberland use changes differ by ownership and forest type, treating all timberland as one major category may lead to incorrect predictions.

The effect of policy decisions on the competitiveness of genetically modified (GM) crops was examined. The United States has been an early innovator in the development and use of biotechnology crops and has expanded its export market share of the three major GM crops: soybeans, cotton, and corn. Cotton, soybeans, and corn are all grown in the southern states, but these states have an apparent comparative advantage only in the production of cotton, which may be strengthened with the adoption of genetically modified cotton. The influence of biotechnology on the competitiveness of soybeans and corn for the southern states through the introduction of genetically modified organisms (GMOs) is not clear but is probably negligible.