The effect of stochastic factors on soil carbon makes the quantity of carbon generated under a sequestration project uncertain. Hence, the quantity of sequestered carbon may need to be discounted to avoid liability from shortfalls. We present a potentially applicable uncertainty discount and discuss difficulties that might arise in empirical use. We insist that the variance in historical crop yields across geographical areas is used to derive a proxy variance for forming an uncertainty discount for carbon projects. Application of our approach suggests that project level uncertainty discounts would be 15-20% for the East Texas region.

This study utilized a semiparametric panel model to estimate environmental Kuznets curves (EKC) for carbon dioxide (CO2) in 15 Latin American countries, using hitherto unused data on forestry acreage in each country. Results showed an N-shaped curve for the region; however, the shape of the curve is sensitive to the removal of some groups of countries. Specification tests support a semiparametric panel model over a parametric quadratic specification.

The appearance of organic produce is often less than perfect because of limited methods of avoiding plant diseases. We combine hypothetical and real auction mechanisms to investigate how cosmetic damage affects Consumers' willingness to pay for apples. We find that 75% of the participants are willing to pay more for organic than for conventional apples given identical appearance. However, at the first sight of any imperfection in the appearance of the organic apples, this segment is significantly reduced. Furthermore, the cosmetic damage has a larger impact on the willingness to pay for organic apples than for conventional apples.

Consumer acceptance and willingness to pay for three nonconventional attributes associated with six processed blueberry products was examined through an in-store conjoint experiment survey. Both credence and experience attributes were considered, including whether the products were produced locally, and whether they were organic or sugar-free. The results indicate heterogeneity in consumer preference and willingness to pay for different attributes across product categories. Local products and organic formulations generally received positive willingness to pay across all products. This information has implications for blueberry growers and retailers who are trying to create and position value-added products for maximum revenue.

There is evidence that consumers are increasingly purchasing food directly from local producers, but little is understood about which market-specific, intrinsic, extrinsic, and demographic attributes influence the probability of preferring to purchase fresh produce through direct-market channels. A multinomial logit model is used to analyze a national dataset of fresh produce consumers with a focus on exploring differences among those that prefer to purchase direct always, occasionally (seasonally and as a secondary source), and never. Results suggest that to increase patronage and loyalty of current customers, producers may emphasize the availability of fresh, superior, vitamin-rich, and locally-grown produce at market locations through booth displays, ads in magazines, radio spots, and electronic newsletters. To attract new customers who do not currently admit a preference for purchasing direct, producers may find greater success by locating in convenient-to-reach venues, showcasing a variety of colorful offerings, and working to enhance the overall aesthetic appeal of market locations.

Scientists and beef industry participants are investigating ways to improve the healthiness of beef. We report results of a nationwide mail survey developed to determine Consumers' preferences for fat content in ground beef and identify how consumers would most like to improve the healthiness of beef. The results from a choice-based conjoint experiment indicate that consumers place significant value on reducing saturated fat and the Omega 6:3 ratio in ground beef, but were relatively unconcerned about conjugated linoleic acid. The relatively new method of best-worst scaling was used to further identify which methods consumers most preferred producers use to improve fat content in beef. The results indicate consumers preferred feeding cattle a grass-fed diet as opposed to supplementing cattle feed with fish-meal or flaxseed to improve the fatty acid content in beef. Although consumers were receptive to the idea of using genetic testing to breed only those cattle with improved fatty acid content, using cloning to achieve this end, was viewed as very undesirable.

Cattle feeding enterprises operate amid variability originating in prices and production. This research explicitly models yield risks related to cattle feeding by relating the mean and variance of yield performance factors to observable conditioning variables. The results demonstrate that pen characteristics, such as entry weight, gender, placement season, and location influence the mean and variability of yield factors, defined as dry matter feed conversion, average daily gain, mortality, and animal health costs. Ex ante profit distributions, conditional on cattle placement characteristics, are derived through simulation methods to evaluate the effects of price or yield shocks on the distributional characteristics of expected profits.

Factors affecting the adoption of crop insurance, forward contracting, and spreading sales are analyzed using multivariate and multinomial probit approaches that account for simultaneous adoption and/or correlation among the three risk management adoption decisions. Our empirical results suggest that the decision to adopt crop insurance, forward contracting, and/or spreading sales are correlated. Richer insights can be drawn from our multivariate and multinomial probit analysis than from separate, single-equation probit estimation that assumes independence of adoption decisions. Some factors significantly affecting the adoption of the risk management tools analyzed are proportion of owned acres, off-farm income, education, age, and level of business risks.

Hurricanes have caused substantial damage in parts of the U.S. Damages are increasing, perhaps as part of a natural cycle or perhaps in part related to global warming. This paper examines the economic damages that hurricanes cause to U.S. agriculture, estimates the increased damage from an increase in hurricane frequency/intensity, and examines the way that sectoral reactions reduce damages. The simulation results show that hurricanes and associated adjustments cause widespread damage and redistribute agricultural welfare. We find that crop mix shifts of vulnerable crops from stricken to nonstricken regions significantly mitigate hurricane damages.

This paper examines the supply response of the Greek pork market. A GARCH process is used to estimate expected price and price volatility, while price and supply equations are estimated jointly. In addition to the standard GARCH model, several different symmetric, asymmetric, and nonlinear GARCH models are estimated. The empirical results indicate that among the estimated GARCH models, the quadratic NAGARCH model seems to better describe producers' price volatility, which was found to be an important risk factor of the supply response function of the Greek pork market. Furthermore, the empirical findings show that feed price is an important cost factor of the supply response function and that high uncertainty restricts the expansion of the Greek pork sector. Finally, the model provides forecasts for quantity supplied, producers' price, and price volatility.

Beef tenderness is critical in consumer satisfaction with beef steak products. Current fed cattle valuation systems do not differentiate carcasses based upon tenderness variation. However, considerable research indicates consumers are willing to pay more for tender relative to tough beef steak. This article develops a tenderness-augmentation to current fed cattle grid pricing systems. Using a large set of actual carcasses, we determine that a tenderness-augmented price grid would reorder fed cattle value by on average nearly $5.00/cwt dressed relative to current valuation methods. Substantial opportunity is present to improve beef tenderness through new price signals to producers.

The purpose of this paper is to analyze the marketing performance of wheat farmers in Illinois and Kansas over 1982-2004. The results show that farmer benchmark prices for wheat in Illinois and Kansas fall in the middle third of the price range about half to three-quarters of the time. Consistent with previous studies, this refutes the contention that Illinois and Kansas wheat farmers routinely market the bulk of their wheat crop in the bottom portion of the price range. Tests of the average difference between farmer and market benchmark prices are sensitive to the market benchmark considered. The marketing performance of wheat farmers in Illinois and Kansas is about equal to the market if a 24- or 20-month market benchmark is used, slightly above the market if a 12-month price benchmark is used, and significantly less than the market if the harvest benchmark is used. The sensitivity of marketing performance to the market benchmark considered is explained by the seasonal pattern of prices. While Illinois producers performed slightly better than their counterparts in Kansas, notable differences in performance across these two geographic areas is not observed.

Recent consolidation in agriculture has shifted production toward fewer but larger farms, reshaping business relationships between farmers, processors, input suppliers, and local communities. We analyze growth and diversification of U.S. corn, wheat, apple, and beef farms by examining longitudinal changes in 10 size cohorts through three successive censuses. We fail to reject Gibrat's law in apple and wheat industries and the mean reversion hypothesis in beef and corn industries. Apple and wheat farms diversify over time. The findings suggest that scale economies diminish for large farms across all four industries and scope economies dominate scale economies for large apple and wheat farms.

This study examines the relationship between agricultural profits and farm household wealth across locations and farm sizes in U.S. agriculture. A multiperiod household model is used to develop hypotheses for testing. Results indicate that farmland has out-performed nonfarm investments over the past decade. Thus, households may want to keep their farmland to build wealth, even if it requires them to earn off-farm income. The analysis implies that decision will be made based on farm household wealth factors having little to do with agriculture.

Although Vector Autoregressive models are commonly used to forecast prices, specification of these models remains an issue. Questions that arise include choice of variables and lag length. This article examines the use of Forecast Error Variance Decompositions to guide the econometrician's model specification. Forecasting performance of Variance Autoregressive models, generated from Forecast Error Variance Decompositions, is analyzed within wholesale chicken markets. Results show that the Forecast Error Variance Decomposition approach has the potential to provide superior model selections to traditional Granger Causality tests.

In order to estimate demand elasticities of source differentiated beef in South Korea, this study used the quantity of an endogenous demand system derived through maximizing the economic welfare of market participants including local beef consumers and local and foreign beef suppliers. The demand system is then weighted with respect to quality adjustment parameters to identify the effects of quality differences in source differentiated beef on market demand. As implied by the high relative price of locally produced “Hanwoo” beef, substitutability between local and imported beef is shown to be very weak and the own price elasticity of South Korean beef is shown to be inelastic. Related to quality differences between source differentiated beef, South Korean beef consumers show a preference for Australian beef relative to U.S. and Canadian beef, perhaps due to BSE concerns.

The behavior of agricultural commodity markets can arguably result in markedly asymmetric price cycles, that is, downward cycles of substantially different length and breadth than upward cycles. This study assesses whether asymmetric-cycle models can enhance the understanding of the dynamics and provide for a better forecasting of U.S. soybeans and Brazilian coffee prices. The forecasts from asymmetric cycle models are found to be substantially mode precise than those obtained from standard autoregressive models. The asymmetric cycle models also provide useful insights on the markedly different dynamics of the upward vs. the downward cycles exhibited by the prices of these two commodities.

Counter-seasonal imports of fresh produce facilitate year-round availability in the U.S. and may impact the seasonal structure of market price relationships. Vector autoregression analysis is used to determine the nature and extent of spatial price relationships among four geographically distinct regions in the U.S. fresh peach wholesale market. We evaluate differences in regional spatial price relationships and find statistical evidence that price relationships among regions are different in periods dominated by regional domestic supplies imports compared with periods when counter-seasonal imports dominate the market.