The differential demand system or Rotterdam model is extended to include lagged consumption through translation parameters, allowing habit and inventory effects. Applications of the model to annual U.S. expenditure and weekly juice sales data illustrate the importance of the time interval of an observation on the relative strengths of the habit inventory.

Recent empirical research and developments in the cattle industry suggest several reasons to suspect structural change in economic relationships determining cattle prices. Standard forecasting models may ignore structural change and may produce biased and misleading forecasts. Vector autoregressive (VAR) models that allow parameters to vary with time are used to forecast quarterly cattle prices. The VAR procedures are flexible in that they allow the identification of structural change that begins at an a priori unknown point and occurs gradually. The results indicate that the lowest RMSE for out-of-sample forecasts of cattle prices is obtained using a gradually switching VAR model. However, differences between the gradually switching VAR model and a univariate ARIMA model are not strongly significant. Impulse response functions indicate that adjustments of cattle prices to new information have become faster in recent years.

Forecast distributions based on historical yields and subjective expectations for 1987 expected crop yields were compared for 90 Western Kentucky grain farms. Different subjective probability elicitation techniques were also compared. In many individual cases, results indicate large differences between subjective and empirical moments. Overall, farmer expectations for 1987 corn yields were below those predicted from their past yields, while soybean expectations were above the historical forecast. Geographical location plays a larger role than crop in comparisons of relative variability of yield. Neither elicitation technique nor manager characteristics have significant effects on the comparisons of the forecasts.

Double-cropping of soybeans and wheat is often promoted by extension personnel. This paper seeks to explain how the decision to adopt double-cropping is made, using a Tobit regression model. Tobit makes use of more of the information in the data set than do logit or probit and explains not only the decision to double-crop but also the rate of adoption. The paper considers factors such as profit and risk perceptions and risk which have not been included in the past models used to explain adoption of technology. The results show that risk perception is important. Contrary to the findings of some other adoption studies, this decision in not influenced by human capital factors. The farmers who double-crop are more highly leveraged and appear to do so both to achieve higher income and as part of a risk diversification strategy. This is consistent with the importance of the location factor, measured as the average number of growing degree days at the farm's location. Growing degree days is a proxy for the actual distribution of returns from double-cropping and is the main factor explaining this decision. Extensive adoption of double-cropping in cooler regions of the Midwest must await technological advances that can increase the profitability of double-cropping by reducing the growing season for wheat and/or beans.

Data from a western Kansas feedlot were analyzed to estimate the quantitative impacts of price and performance variables on profits per head from finishing cattle. Sale prices, feeder prices, and corn prices had the most impact on profit variability over time. Differences in sale prices, feeder prices, and feed conversions were important in explaining the difference in steer and heifer profits over time. Results suggest that breakeven prices should be calculated for a range of fed cattle, feeder, and corn prices, and that these three variables need to be stochastic in representative farm modeling efforts.

This study examined the supply of and demand for married female labor in the southern United States. Special attention was given to differences in labor force participation, labor supply, and quantities of labor supplied and demanded across rural and urban areas. Once state effects were accounted for, decisions to change participation were found not to vary by urban-rural designation. Differences in demand were fully captured by an intercept shifter and the variations in hours supplied by married females between urban and rural areas. Labor supply varied greatly with the effects of key determinants (number of children, work force experience, family income) being strongly different in rural areas. Different policies are needed to promote female labor supply in rural areas as opposed to urban areas.

In this paper, a conceptual model for estimating option price for groundwater quality protection is developed, and the effects of subjective demand and supply uncertainty and other variables on option price are examined. A contingent valuation study to measure option price for groundwater quality protection was conducted in southwestern Georgia. Valuation results suggest that the monetary benefits to citizens of protecting groundwater supplies from agricultural chemical contamination are quite large.

The 1990 Farm Bill contains several measures concerning soil erosion caused by U.S. farmers. Data from a nationwide survey of people conerning their attitudes toward agriculture were used to examine the structure of respondents' preferences for government support-policies to combat soil erosion. Estimates of the influence of socio-economic and demographic variables on policy preferences were computed using a multiple-indicator model. Results show more support for the regulation of soil erosion, including laws and fines, than for government financial support.

Methyl parathion or Penncap M (an encapsulated methyl parathion) are used extensively throughout the United States for controlling stink bug pests in soybeans, Glycine Max (L.) Merrill. However, this insecticide is highly toxic to mammals, birds, and non-target arthropods, and thus is less environmentally sound than other insecticides. For environmental and human health considerations, investigating alternative insecticides for control is desired. For this investigation, research based on field experimental data from Florida, Georgia, and Louisiana during the 1988 and 1989 growing seasons were employed. Results indicate that alternative, currently available, and less toxic insecticides may reduce producer costs, increase yield, and improve soybean quality. These alternative insecticides include Scout (tralomethrin), Karate (lambda-cyhalothrin), Orthene (acephate), and Baythroid (cyfluthrin). In terms of improved profits these alternative insecticides may dominate methyl parathion or encapsulated methyl parathion.

Over 90 percent of interstate produce movements are by truck. In recent years, concerns have been raised regarding the adequacy of motor carrier services. Reasons for these concerns include the possibility of increased costs or service erosions resulting from relaxed economic regulations, an eroding road infrastructure, increasing congestion, more stringent safety regulations, demographic trends suggesting the onset of an increasingly severe driver shortage, and declines in rail capacity devoted to produce haulage. In this study, trends in the adequacy of trucking services for trucking during the 1980s was examined employing data sets developed by the USDA regarding haulage from five growing areas to six metropolitan areas across the United States, and a case study based on over 9,000 interviews with drivers hauling Rorida produce, conducted between 1982 and 1989. The results of the study suggest that there have been no erosions in service adequacies.

Recreation trends indicating an increasing demand for quality recreation experiences suggest the need for special consideration of quality in analysis of fee access recreation. By viewing quality as a subjective latent variable, this paper uses a simultaneous equation framework to consider the use of subjective versus objective appraisals of quality in fee-based recreation access analysis.

Recreation demand studies have traditionally utilized a two-step valuation method, estimating conditional recreation participation probabilities and then intensity of use decisions. These two steps of analysis are combined to estimate the use value of natural resource recreation sites. The purpose of this paper is to provide a method by which use value can be estimated solely from the participation decision. The one-step resource valuation method allows estimation of use values from coefficients of the logistic regression recreation participation equation. The benefits of the method are the reduced data and effort required to value natural resource areas.

Output supplies and input demands were estimated for each of five South Central states. The model structure in each state was based on prior parametric tests of homothetic separability, and estimates were generally consistent with a competitive, profit-maximizing industry. Considerable diversity among states was evident in selected production relationships. These results further document the non-uniform ways in which producers respond to government farm programs and market information.

An eleven-region stochastic coefficient econometric model was estimated and used in an optimal control framework to evaluate the effectiveness of the dairy price support program and marketing orders in reducing and stabilizing government purchases of dairy products. The results showed significant pressure on the reduction of the support price both in the presence and absence of Class I differentials. The optimal control model also showed that the drop in price support levels did not dramatically alter the regional distribution of milk production.

Quality factors affecting fed cattle prices were examined during a six-month period in southwestern Kansas. Transaction prices were significantly affected by the percentage of cattle expected to grade choice times the choice-to-select carcass price spread, finish uniformity, average weight, dressing percentage, breed, number of cattle purchased by a single packer on a given day, the packer, the feedyard, the day-of-the-week the cattle were sold, and the number of bids received. Asking prices were significantly affected by many of the same factors. Asking and transaction prices reflected approximately 25 percent of the packer value differentials for expected carcass quality grades.

A model of the political economy of agricultural policy formulation was used to analyze the current stalemate in the Uruguay Round of Multilateral Trade Negotiations. The combination of social welfare increasing and transferring policies in the European Community and the U.S. is one of the primary causes of the deadlock in trade negotiations. The Community's farm policy of high internal price supports, limited market access, and export subsidies represents short-term equilibria in the market for social-welfare policies which distribute benefits to producers at the expense of consumers and taxpayers. Thus, the opportunity for internal reform of the CAP leading to a compromise in the GATT negotiations is problematic at best. However, international commitments to agricultural policy reform will force the Community to make concessions which will bring equivalent change in domestic policy.

Variability in feed prices and crop yields are important sources of risk to dairy farmers. A simulation model of a representative dairy farm was used to evaluate crop insurance and hedging as risk management strategies. These strategies lowered expected net returns but also reduced risk. The preferred set of strategies at lower levels of risk aversion included hedging and crop insurance, although a base scenario in which no risk management strategies were employed was also efficient. The preferred strategy at higher levels of risk aversion was a combination of crop insurance and hedging.

Stochastic simulation was used to analyze revenues and costs for a small-scale catfish processing plant under various combinations of operating capacity utilization and price paid for live fish. The probability for a positive level of daily net income ranged from 11 to 100 percent depending on the price paid for live fish and level of operating capacity utilized. Daily average total cost per pound of live fish processed changed by 2.10 percent given a 10 percent change in live fish processed. Short-term cyclical patterns in revenues and costs suggest a need for financial planning to provide for possible year-end revenue shortfalls.

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.

Seasonal price premiums have been proposed as a means of dampening the highly seasonal patterns of milk production in Florida. A Markov decision bio-economic model of the breeding and replacement decisions was solved via stochastic dynamic programming and used to analyze the potential supply response to seasonal price premiums. The results of the analysis suggest that the seasonal milk supply in Florida is highly price inelastic.