This paper is concerned only with research that is intended to guide, influence, or illuminate public policy choices. As professionals, we economists exhibit an unfortunate contradiction in values. Economists insist on making value judgments because they are needed to do research on public policy issues, and, simultaneously, insist on not discussing them, thereby keeping ourselves ignorant about what we are doing.

Since 1973, the U.S. economy has shifted from a position characterized by abundant and low-cost energy to one of rising energy prices and fragile energy supplies, periodically threatened by an unstable foreign political environment.

This article, heralding the new year, clearly indicated that 1983 would be a period of tight budgets in virtually every state. A survey of 25 state capitals revealed that state revenues have been steadily declining. Policy Reports, a new bimonthly publication, surveyed the 16 states where newly elected governors will be inaugurated in January, 1983, and found that none had advocated a tax increase.

During recent years we have begun to expect increases in prices that farmers pay for inputs. Rising costs of production have adversely affected the profits of many farming operations. The greatest relative change in prices has been in interest rates, but since 1972, and particularly since 1978, energy costs have exhibited a steep climb, as shown in Figure 1 (USDA, p. 427). Energy inputs such as LP gas, which is used heavily by the poultry industry, have shown particularly larger increases. The LP gas price paid by farmers nationwide rose from 38.9 cents per gallon in 1977 to 69.7 cents per gallon in 1981, a 79 percent increase (USDA, p. 422).

Most of the research in agricultural credit in the United States is related to large-scale commercial farming. A number of such studies have tried to estimate the demand for credit (Hesser and Schuh) and/or supply of credit (Melichar).

The microcomputer is becoming an important tool for the land grant institution in serving agriculture. Its applications present clientele with unprecedented opportunities for increasing the use of information systems, analytical and record-keeping tools, and the research results reported by land grant institutions to improve the decision-making process in agriculture.

Recently there has been a trend toward economic deregulation of transportation by the federal government. The Airline Deregulation Act of 1978, the Staggers Rail Act of 1980, and the Motor Carrier Act of 1980 have reduced the regulatory role of the federal government and, in general, place increased reliance on the market for resource allocation. Earlier, the Motor Carrier Act of 1935 exempted from economic regulation the haulage of agricultural commodities moving in interstate commerce. In spite of the historic deregulation of agricultural motor carriage and the recent move by the federal government toward deregulation, the motor carrier deregulation question remains very important in many states.

I have often heard the microcomputer compared to the tractor with respect to its potential impact on agriculture in the United States. From the viewpoint of agriculture as a whole, such comparisons must be regarded as overstated.

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).

The continued volatility of feeder cattle prices sustains interest in hedging strategies. The stocker operator may use technical or fundamental analysis for decision guides in the hedging program. Alternatively, the stocker operator could use profit objectives to guide the operator's hedging decisions. Previous works have developed strategies based on technical tools such as moving averages (Lehenbauer), point and figure analysis (Lehenbauer), and oscillators (Russell and Franzmann). Similarly, strategies have been developed that use fundamental analysis as a decision aid (Brown). However, no work has examined, in detail, strategies based on a management by objective philosophy—although at times the popular press has emphasized this approach (Farm Futures).

Perhaps out of a concern for efficiency, or for other reasons, we develop or adopt rules—the simpler are called “rules of thumb”—to direct and govern much of our behavior. The bases for these rules are many and varied, assumption, conventional wisdom, experience, theory, to mention a few.

The economic distortions that have been caused by federal regulation of natural gas markets have been the subject of many recent studies (Committee for Economic Development [CED]; Brickhill; Hall; MacAvoy and Pindyck; and Means). The most recent policy debate concerns the relative merits of alternatives to the price deregulation schedule of the 1978 Natural Gas Policy Act (NGPA). The range of options runs from freezing natural gas prices at current levels to complete decontrol of natural gas prices by January 1, 1986. Producers of natural gas, pipelines, distribution utilities, and end users all suffer from some sort of economic distortion under the NGPA (CED, pp. 50-60).

The food stamp and other assistance programs for low-income households require continual adjustment if some form of equity across time is to be achieved. For this reason, cost-of-living adjustments and related mechanisms for reflecting changes in prices and the economic status of the target populations have been used in formulae for computing the food stamp bonus and other welfare transfers.

Due primarily to inflation, the desire to own assets for appreciation and new technology, capital needs in agriculture continue to increase rapidly. Accompanying this increase in the need for capital is an increase in the use of credit.

Demand for lignite-energy resources for the production of fuel for generating electrical power in Texas has increased significantly as a result of dramatic real price increases in the more traditional fuels, such as natural gas and crude petroleum (Kaiser).