Agribusiness Commons^™

The Role Of Premium Subsidies In Crop Insurance, Charalampos Mavroutsikos, Konstantinos Giannakas, Cory Walters

Department of Agricultural Economics: Faculty Publications

This study develops a novel framework of heterogeneous producer attitudes towards risk to analyze different, stated and revealed, roles of crop insurance premium subsidies and underlying policy objectives of the government. The analysis reveals a strong connection and a complementarity between the roles of premium subsidies in increasing producer participation in crop insurance, inducing a desired separating equilibrium in the presence of asymmetric information, and transferring income to agricultural producers participating in the program. Developing an alternative design of premium subsidies that can achieve the stated government objective of increased producer participation and induce any desired separating equilibrium at significantly …

Consumer Valuation Of And Attitudes Towards Novel Foods Produced With New Plant Engineering Techniques: A Review, John C. Beghin, Christopher Gustafson

Department of Agricultural Economics: Faculty Publications

We follow the PRISMA extension for scoping reviews to review the emerging international body of empirical evidence on consumers’ attitudes and willingness to pay (WTP) for novel foods produced with New Plant Engineering Techniques (NPETs). NPETs include genome/gene editing, cisgenesis, intragenesis, and RNA interference. These novel foods are often beneficial for the environment and human health and more sustainable under increasingly prevalent climate extremes. These techniques can also improve animal welfare and disease resistance when applied to animals. Despite these abilities of NPETs, evidence suggests that many, but not all, consumers discount these novel foods relative to conventional ones. Our …

What Determines The Success And Failure Of Environmental Crowdfunding?, Takahiro Kubo, Diogo Veríssimo, Shinya Uryu, Taro Mieno, Douglas Macmillan

Department of Agricultural Economics: Faculty Publications

Online crowdfunding can help address the perennial financial shortfalls in environmental conservation and management. Although many online crowdfunding campaigns fail to collect any funds due to not achieving their targets, little is known about what drives success. To address this knowledge gap, we applied a mixed-methods approach to data from 473 successful and failed campaigns hosted on the online crowdfunding platform Readyfor. We found that fundraising performance varied by topic, with campaigns on pet animal management outperforming those focussed on landscape management and sustainable use. We also found that marketing strategies associated with online findability and increased reach through social …

Relative Valuation Of Food And Non-Food Risks With A Comparison To Actuarial Values: A Best–Worst Approach, Kayode Ajewole, Elliott James Dennis, Ted C. Schroeder, Jason Bergtold

Department of Agricultural Economics: Faculty Publications

This study empirically tests the relative importance that U.S. consumers place on immediate and long-term food and non-food risks. We use a best–worst survey method to elicit relative rankings and weights for each risk in terms of its perceived cost and likelihood. Immediate food risks are perceived to be more costly but less likely than long-term food risks. Immediate non-food risks are perceived to be both more costly and likely than long-term non-food risks. Overall, food risks are perceived to be less expensive than non-food risks. The combination of perceived cost and likelihood is used to define a measure of …

High Bmi Predicts Attention To Less Healthy Product Sets: Can A Prompt Lead To Consideration Of Healthier Sets Of Products?, Christopher Gustafson, Kristina Arslain, Devin Rose

Department of Agricultural Economics: Faculty Publications

While the food environment has been implicated in diet-related health disparities, individuals’ ability to shape the food environment by limiting attention to a subset of products has not been studied. We examine the relationship between BMI category and consideration set—the products the individual considers before making a final choice—in an online hypothetical shopping experiment. Specifically, we focus on the healthiness of the consideration set the individual selected. Secondly, we examined the interaction of a health prompt (versus a no-prompt control) with BMI category on the healthiness of the consideration set. We used linear probability models to document the relationship between …

The Relationship Between Bodyweight Status And Weight Perception Explains Differences In Calories Ordered In A Food Choice Exercise, Jean-Claude Mbarushimana, Christopher Gustafson, Henriette Gitungwa, Eliana Zeballos

Department of Agricultural Economics: Faculty Publications

Understanding food choice is critical to be able to address the rise in obesity rates around the globe. In this paper, we examine the relationship between measured (BMI, using self-reported height and weight) and perceived weight status with the number of calories ordered in a controlled online food choice exercise. A total of 1044 participants completed an online food choice exercise in which they selected ingredients for a sandwich from five categories: meat/protein, cheese, spread/dressing, bread, and vegetables. We examine the number of calories ordered by participants and use linear regression to study the relationship of BMI category relative to …

Food Policy: Stability, Sustainability, And Safety, Gary D. Lynne

Department of Agricultural Economics: Faculty Publications

Everyone needs to eat, and eat well, as it is essential to the process of slowing down the pace to and time of our death, the point of maximum entropy for each person. As a result, it is perhaps the best example of the need to seek one’s Self-interest. It also puts us in the position, however, to more easily Empathize, walk-in-the-shoes of someone who may not have enough food, or the best kind of food, and help in forming a shared Other-interest, too. As a result, we might choose to support, with our tax money, some kind of a …

Is The World Converging To A ‘Western Diet’?, Azzeddine Azzam

Department of Agricultural Economics: Faculty Publications

Objective: To test the nutrition transition hypothesis of global dietary convergence to a ‘Western diet’.

Design: Consumer-waste-adjusted FAO Food Balance Sheets are used to construct for each country a Western Diet Similarity Index (WSI), expressed as a ratio of calories from animal-sourced foods, oils, fats and sweeteners to total per capita calories. β-Convergence and associated speed are estimated by growth regressions using 1992–2013 panel data. Speed of convergence, a non-linear function of income per capita, globalisation and urbanisation, determines the steady-state or long-term global WSI. The long-term global WSI is compared with the WSI of the group of countries with …

Net Return Distributions When Metaphylaxis Is Used To Control Bovine Respiratory Disease In High Health-Risk Cattle, Elliott James Dennis, Ted C. Schroeder, David G. Renter

Department of Agricultural Economics: Faculty Publications

This study’s objective was to estimate net returns and return risk for antimicrobial metaphylaxis options to manage bovine respiratory disease (BRD) in high health-risk feedlot cattle. The effectiveness of antimicrobials for metaphylaxis varies by cattle population. How differing antimicrobial effectiveness translates to net return profitability for heterogeneous cattle populations is less understood. Net returns and return risk were assessed using a net return simulation model adapted to allow for heterogeneity in high health-risk cattle placement characteristics and antimicrobial choice to control BRD. The net return model incorporated how antimicrobials modify BRD health and performance outcomes. Health and performance outcomes were …

Tax Policy: Pay The Price, Gary D. Lynne

Department of Agricultural Economics: Faculty Publications

Taxes are the price we pay in order to obtain many of the outcomes pursued in the shared Other-interest. So, Metaeconomics in contrast to Microeconomics gives a substantive analytical system for dealing with the tax question, because of recognizing the Other-interest. Metaeconomics clarifies that taxation is about paying for, and thus bringing forth the payoffs from that which we share, like recording deeds and titles to private property; enforcing property rights, which is essential to a Market; licensing, registering, and enforcing patents; military, police, and fire services; road and harbor construction and maintenance; dams and reservoirs to provide for water …

Health Policy: Universal Pre-Existing Conditions, Gary D. Lynne

Department of Agricultural Economics: Faculty Publications

Next to food policy, perhaps no domestic policy issue has raised the ire of more people than that related to the healthcare system. The US Affordable Care Act, which was based in and otherwise formulated with a heavy orientation towards the shared Other-interest in health, has been rejected outright by many who see the healthcare system is only to facilitate maximizing one’s own Self-interest. The latter perspective is easily understood, as there is perhaps nothing more in one’s own Self-interest then taking care of one’s health. So, it would be easily expected that many people would consider mainly their own …

Introduction To Metaeconomics, Gary D. Lynne

Department of Agricultural Economics: Faculty Publications

Metaeconomics is fundamentally about the problem of having too much emphasis on the Market or too much emphasis on the Government. It is about the essential need to bring empirical reality and ethics into finding balance: It is essential to achieving a good capitalism. Why? Well, because of the natural tendency to excessive Greed. As DeWaal (2009) would have it, we live in an age of Empathy: Ego based Greed is out. The Greed needs to be tempered, balanced, and perhaps bounded, with Empathy-based ethics. And, as Metaeconomics makes clear, it is because there is a dual nature of human …

Consumer Reactions To E. Coli And Antibiotic Residue Recalls: Utility Maximization Vs. Regret Minimization, Elliott James Dennis, Kayode Ajewole, Jason S. Bergtold, Ted C. Schroeder

Department of Agricultural Economics: Faculty Publications

Food safety remains a major issue to many consumers. Previous studies examining the economic impact of food safety recalls have focused on Class I recalls. Antibiotic residue in meat products, a Class II recall, has increased in consumer importance yet little is known about how much research and development expenditure should be allocated to reduce antibiotic residue pre- and post-harvest. This study compares demand elasticities and the decrease in willingness to pay in response to either an E. coli (Class I) or antibiotic residue (Class II) recall. We compare and contrast two competing behavioral frameworks, Random Utility and Regret Minimizing. …

The Influence Of Crop Insurance Agents On Coverage Choices: The Role Of Agent Competition, Nathan Delay, Hayley Chouinard, Cory Walters, Philip Wandschneider

Department of Agricultural Economics: Faculty Publications

We examine how competition among crop insurance agents affects coverage choice in the federal crop insurance program. Agents may influence producers’ insurance decisions to maximize their total compensation. We develop a theoretical model of producer–agent interaction to examine how loss potential, agent compensation mechanisms, and market competition affect the coverage level selected. Using crop insurance unit-level datasets from five states, we find evidence that agent market concentration and agents’ market share matter in the insurance coverage decisions of producers but that the economic significance of the influence is relatively small. Agent influence over coverage level, premium, and liability choice is …

Wildlife Viewing: The Impact Of Money-Back Guarantees, Takahiro Kubo, Taro Mieno, Koichi Kuriyama

Department of Agricultural Economics: Faculty Publications

Wildlife sightings are not always guaranteed. To address this risk, tour operators often offer a money-back guarantee as a refund mechanism. However, studies have overlooked the influences of such refund mechanisms on tourists' tour participation decisions and tourism revenue. We conducted choice experiments to examine the impact of such mechanisms using a case of Amami rabbit tourism in Japan. We found that the guarantee significantly influences the tourists’ decision-making and tour revenue. In particular, we found that the expected tourist participation rate and tour guide revenue vary drastically depending on the probability of the rabbit encounter. The maximum expected revenue …

Value Of Arrival Metaphylaxis In U.S. Cattle Industry, Elliott James Dennis, Ted C. Schroeder, David G. Renter, Dustin L. Pendell

Department of Agricultural Economics: Faculty Publications

Although several studies have estimated economic impacts of antimicrobials for growth promotion, little is known about economic impacts of the common animal health management strategy known as metaphylaxis: administering antimicrobials to groups of animals to prevent disease. This article develops a new framework to map animal disease to producer profitability and determine societal economic impacts surrounding metaphylactic use of antimicrobials in beef cattle production. Results indicate the direct net return value of metaphylaxis to the U.S. fed cattle industry is at least $532 million. Beef producer surplus losses of $1.8 billion would be associated with eliminating metaphylaxis.

Measurement Of Commodity Price Risk: An Overview Of Brazilian Agricultural Markets, Daniel Henrique Dario Capitani, Fabio Mattos

Department of Agricultural Economics: Faculty Publications

This study explores different procedures to estimate price risk in commodity markets. Focusing on Brazilian agricultural markets, the paper proposes to assess both dispersion and downside risk measures using five different approaches (volatility, coefficient of variation, lower partial moments, value at risk and conditional value at risk). Results suggest that some commodities have large price variability but small downside risk, while other commodities show small price variability and large downside risk. Thus, there is no single answer to the question of which commodity exhibits more price risk, but rather distinct answers depending on how risk is perceived by different individuals. …

The Economic Impact Of New Technology Adoption On The U.S. Apple Industry, Nichole L. Busdieker-Jesse, Lia Nogueira, Hayri Onal, David S. Bullock

Department of Agricultural Economics: Faculty Publications

We develop a temporal and spatial partial equilibrium model to evaluate the welfare impact of new technology on the apple industry to control fire blight. We show significant benefits of GM technology relative to conventional methods and other new methods such as microencapsulation of biological agents. We also show that the cost-reduction benefits of the technology exceed the yield-increasing benefits.

Nebraska Cash Corn Prices And Basis Patterns, Jessica J. Johnson, Cory Walters

Department of Agricultural Economics: Faculty Publications

Local cash grain prices can be broken down into two components, futures and basis.1 The futures portion is determined by buyers and sellers of futures contracts, which often represents factors influencing global supply and demand. The basis portion represents factors influencing the local elevator. For any grain marketing decision, sale or purchase, there is a corresponding basis. Understanding the forces driving basis and how to maximize returns from basis is central to making informed grain marketing decisions. The purpose of this publication is to provide an understanding of how basis works for a primary commodity grown in Nebraska, aimed at …

Requiring Pollutant Discharge Permits For Pesticide Applications That Deposit Residues In Surface Waters, Terence J. Centner, Nicholas Eberhart

Department of Agricultural Economics: Faculty Publications

Agricultural producers and public health authorities apply pesticides to control pests that damage crops and carry diseases. Due to the toxic nature of most pesticides, they are regulated by governments. Regulatory provisions require pesticides to be registered and restrictions operate to safeguard human health and the environment. Yet pesticides used near surface waters pose dangers to non-target species and drinking water supplies leading some governments to regulate discharges of pesticides under pollution discharge permits. The dual registration and discharge permitting provisions are burdensome. In the United States, agricultural interest groups are advancing new legislation that would exempt pesticide residues from …

Introduction To Risk Management: Understanding Agricultural Risks, Production, Marketing, Financial, Legal, Human, Laurence Crane, Gene Gantz, Steve Isaacs, Doug Jose, Rod Sharp

Department of Agricultural Economics: Faculty Publications

This handbook is designed to improve the risk management skills of American farmers and ranchers. There is a broad array of established risk management tools ready to be used and new tools are always being developed. By learning about and using these tools, crop and livestock producers can build the confidence needed to deal with risk and exciting opportunities of the future.

Contents

Overview of risk management planning

Steps in risk management planning

Manging production risk

Managing marketing risk

Managing financial risk

Managaing legal rtisk

Managing human risk

Accounting For Product Substitution In The Analysis Of Food Taxes Targeting Obesity, Zhen Miao, John C. Beghin, Helen H. Jensen

Department of Agricultural Economics: Faculty Publications

We extend the existing literature on food taxes targeting obesity. We systematically incorporate the implicit substitution between added sugars and solid fats into a comprehensive food demand system and evaluate the effect of taxes on sugars and fats. The approach conditions how food and obesity taxes affect total calorie intake. The proposed methodology accounts for the ability of consumers to substitute leaner low-fat and low-sugar items for rich food items within the same food group. This substitution is integrated into a calibrated demand system in addition to the substitution among food groups, using recent food intake data and existing demand …

Key Findings Of The Ntm-Impact Project, David Orden, John Beghin, Guy Henry

Department of Agricultural Economics: Faculty Publications

This special issue of The World Economy presents research findings from the European Commission–funded project “Assessment of the impacts of non-tariff measures (NTM)—on the competitiveness of the EU and selected trade partners” (NTM-Impact). Directed toward the EU and its trade partners, the project’s first overall objective was to collect and analyze new data on NTMs for key and representative agri-food products. This involved three components: creating a large symmetric international database on the diverse types of governmental standards and regulations used to address food safety and quality issues, constructing measures of heterogeneity among these standards and regulations; and evaluating the …

The 2010 Economic Impact Of The Nebraska Agricultural Production Complex, Eric Thompson, Bruce Johnson, Anil Giri

Department of Agricultural Economics: Faculty Publications

Nebraska’s agricultural production complex is remarkable in both its sheer volume of production and its diversity. The state is a national leader in the production of major crop and livestock commodities. It is also home to major input industries tied to agriculture as well as sectors processing agricultural production into value-added products, all of which contribute to its economic significance. Moreover, the growth of the state’s agriculture over the past decade has been phenomenal. In 2010, total farm cash receipts exceeded $20 billion for the first time, essentially double the 2000 level. And while the nation’s economy was hit by …

Economic Impact Of Stable Flies (Diptera: Muscidae) On Dairy And Beef Cattle Production, David B. Taylor, Roger D. Moon, Darrell R. Mark

Department of Agricultural Economics: Faculty Publications

Stable flies, Stomoxys calcitrans (L.), are among the most damaging arthropod pests of cattle worldwide. The last estimate of their economic impact on United States cattle production was published 20 yr ago and placed losses at $608 million. Subsequently, several studies of effects of stable flies on beef cattle weight gain and feed efficiency have been published, and stable flies have become increasingly recognized as pests of cattle on pasture and range. We analyzed published studies and developed yield-loss functions to relate stable fly infestation levels to cattle productivity, and then estimated the economic impact of stable flies on cattle …

How Coupled Are Decoupled Farm Payments? A Review Of The Evidence, Arathi Bhaskar, John C. Beghin

Department of Agricultural Economics: Faculty Publications

This survey paper explores the literature on decoupling of farm programs that has emerged in the last 10 years. The paper identifies and assesses the various channels of potential coupling of decoupled farm payments and provides a taxonomy of coupling mechanisms found in theoretical and empirical papers. Coupling of decoupled payments is pervasive but effects when measurable are small, with the exception of the impact on land values. The paper points to unresolved issues on potential coupling mechanisms for further research.

Domestic subsidies to agriculture were brought under the discipline of global trade rules for the first time in the …

Externalities From Roaming Livestock: Explaining The Demise Of The Open Range, Terence J. Centner, Ronald C. Griffin

Department of Agricultural Economics: Faculty Publications

Fence-in laws in most states require ranchers to pay for fences to keep their livestock from trespassing onto others' property. Some states, or jurisdictions within states, have a fence-out rule that requires ranchers' neighbors to pay for fences to keep livestock out. Both rules are Pareto optimal. Using a potential Pareto criterion, we show that a preference for fence-out in some areas may end as conditions change, such as increased nonranching land uses. Changed conditions may have legal consequences. Specific fence-out and fence cost-sharing provisions may be potentially Pareto inefficient and may be challenged for being unconstitutional under the due …

Obligations And Penalties Under Lemon Laws: Automobiles Versus Tractors, Terence J. Centner, Michael E. Wetzstein

Department of Agricultural Economics: Faculty Publications

Distinctive new provisions of tractor lemon laws which create obligations and provide penalties for defective self-propelled agricultural equipment are contrasted with provisions of automobile lemon laws. Lemon-law obligations involve both producers' guarantees to provide consumers with a serviceable vehicle and producers' promises to remedy defects. Due to fewer manufacturer obligations under the tractor lemon laws as opposed to automobile lemon laws, tractors may be expected to have more defects than automobiles. Yet the tractor lemon laws contain fewer penalties in the form of restitution remedies. The inconsistences of these obligations and penalties suggest tractor laws may be inefficient.

Sb 545. Costs Of Distributing Dry-Bulk Fertilizer: Effects Of Plant Size, Plant Utilization, Use Density, And Method Of Delivery And Application, Dale G. Anderson, James Miller

Department of Agricultural Economics: Faculty Publications

1. About 1.8 million tons (1.6 million t) of fertilizer were applied by ~ ebraska farmers in 1978, an increase of nearly 800 percent over 1954 levels. Slightly more than one-third of recent usage was dry-bulk fertilizer.

2. Utilization of plant capacity was the most important of the cost factors analyzed. Even at capacity output, average fixed costs accounted for half to two-thirds of average total costs. Increasing plant output from 50 percent to 100 percent of capacity saved from $12.23 to $17.01 per ton ($13.48 to $18.75/t), depending on plant size and type of application/delivery system.

3. Economies of …

Grain Transportation Problems In Nebraska: Causes And Cures [Proceedings Of The Nebraska Grain Transportation Seminar], Dale G. Anderson, Dean Linsenmeyer, Michael S. Turner

Department of Agricultural Economics: Faculty Publications

The Nebraska feed grain and soybean harvest of 1979 was one which will not soon be forgotten by those who participated in its production and marketing. Yields and production broke all previous records. Record export demands for the crop placed record service requirements on transportation and handling systems. Record movements of grain from farms to elevators and to inland and export terminals were reported. At the same time, complaints of inadequate capacity to store and transport the grain were perhaps also of all-time record proportions. Corn and milo accumulated in open piles on farms and at country collection points. Problems …