Agriculture Commons^™

Will Saf Turbocharge The Corn Ethanol Market?, Richard Perrin, Lilyan Fulginiti, Felipe Miranda De Souza Almeida

Cornhusker Economics

The long-run outlook for the corn ethanol industry is questionable, due to a transition to electric and hybrid vehicles. One source of hope for the long run is the potential demand for producing Sustainable Aviation Fuel (SAF). SAF is a key component in the United States Aviation Climate Action Plan, a path to net-zero greenhouse gas (GHG) emissions in the aviation industry by 2050. Demand for ethanol for SAF offers hope to the ethanol industry, but it depends a great deal on policy decisions that are being made now. Here we sketch out this story.

Based on the information available …

Crop-Livestock Diversification And Efficiency In Agriculture, Jay Parsons, Maroua Afi

Cornhusker Economics

Diversification is a familiar strategy for managing risk in agriculture. It can take several forms including growing more than one crop or operating a farm with both crop and livestock enterprises. As with other strategies for managing risk, diversification comes with a unique set of costs. Managing a farm with multiple enterprises creates additional overhead as well as additional demands on management, labor, land, capital, and other resources. Diversification adds complexity to an operation and too much complexity can lead to inefficiencies.

Corn Grain Marketing Strategy Unbiasing For 2023, Matt Stockton, Shannon Sand

Cornhusker Economics

Discusses cognitive biasing errors that may be employed--in the context of corn market strategizing--such as the Dunning-Krueger effect, availability or distancing bias, gambler's fallacy, and anchoring bias.

Deficit Irrigation Management For Irrigated Corn In Nebraska: Economically Viable?, Lia Nogueira, Cory Walters, Emily O'Donnell, Wesley Peterson, Suat Irmak

Cornhusker Economics

In this study we determine the economic value of deficit irrigation management using both technological and methodological advancements. The use of soil moisture probes represents the technological improvement. We provide improvements in the methodology as follows. Regarding data, we employ a field-size study, instead of plots, where the irrigation decision is determined by the moisture level in the soil measured through a soil moisture probe. Regarding the understanding of the yield response to water, although we examine the commonly used quadratic function, we improve upon this specification by also examining an alternative response function, the linear response stochastic plateau. Our …

Carbon Farming: A Preliminary Economic Analysis Of Carbon Credits For No-Till And Cover Crops, Drew Havens, Richard K. Perrin, Lilyan E. Fulginiti

Cornhusker Economics

Summary Based on experimental data about the amount of carbon sequestered and estimated implementation costs, our preliminary results show that the average cost of sequestering carbon via no-till (about $22 per ton of CO₂e) appears to be much lower than the $51 per ton social value of sequestering that ton. In contrast, our preliminary results show that the average costs of sequestration via adoption of cover crops is much higher, about $60 per ton. Depending on how accurate soil carbon models are in predicting sequestration on individual fields to qualify them for enrollment, reimbursement costs for planting cover …

2023 Nebraska Crop Production Budgets Higher Costs And Risks, Glennis Mcmclure

Cornhusker Economics

The Nebraska crop budgets are available for the 2023 production season. The 84 budgets indicate cost of production increases. Estimated average economic or total costs per bushel for 2023 corn production are expected to be at least 23% to 25% greater than last year. Soybeans are estimated to be 13% to 19% more in economic costs per bushel, with wheat production costs having jumped over 20% compared to last year and running as high as 63% higher over the last two years combined. Cost scenarios for individual producers can vary based on their timing of input purchases and price variabilities.

Hedging Your Average Crop Price Using Seasonals, Cory Walters, Richard K. Preston

Cornhusker Economics

In this article, we connect what the industry says and what producers say to improve the disconnect and the decision-making environment associated with hedging. We accomplish this by inspecting the distribution of producer prices with and without hedging in the fall as the distribution contains both yearly outcomes (producer concern) as well as the average outcome (another point of view). Computer models are used to lift the mystery surrounding the role of hedging. Computer models help understand complex processes, allowing for a better decision environment, leading to improved financial standing and stability. Our model reproduces the risk profile that individual …

Role Of Social Network On Technology Adoption: Application To Nebraska Producers In The Face Of Undesirable Vegetation Transitions, Sabrina Gulab, Holly K. Nesbitt, Simanti Banerjee, Theresa Floyd

Cornhusker Economics

Conclusion

Producers need to have access to information regarding new conservation practices and technologies to ensure land management in the face of ecological threats in general and vegetation transitions (VTs) in the context of our study. This study investigates the role of an individual producer's social network on the willingness to seek information about technologies and management practices and the likelihood of new technology adoption with special attention to risk attitudes and producer spillover effects. Our results provide evidence that network composition and information obtained through a producer's social network don't influence an individual's willingness to seek information about new …

Historical Corn Price Evolution Implications For Pre-Harvest Hedging, Cory Walters, Richard K. Preston

Cornhusker Economics

Commodity markets evolve through information provided by participating buyers and sellers and throughout this process the conditions in which commodity markets work are revealed. Producer pre-harvest commodity marketing can be further developed by incorporating information on how commodity markets work, leading to better farm financial performance.

We investigate how commodity markets have historically evolved from spring to fall. While changes in future prices appear random in any given year, observing average daily prices over 32 years could uncover a seasonal tendency. In the past 32 years, the average daily price tends to be higher in the spring than the fall, …

The Storm In World Fertilizer Markets Continues, John C. Beghin

Cornhusker Economics

This article updates the recent article on world fertilizer markets by Beghin and Nogueira (2021), which noted the perfect storm affecting global fertilizer markets through high demand, droughts affecting fertilizer supply, high fossil energy prices, COVID 19-related supply-chain disruptions, and trade policies, all conspiring to elevate fertilizer nominal prices to levels not seen since 2008. In the last 10 months, the Ukraine-Russia war and associated trade sanctions have exacerbated the disruptions in fossil energy, grain, vegetable oil, and fertilizer markets already present in 2021. On the more hopeful side, some United States trade policy developments will help reduce US fertilizer …