Using Missouri Show-Me-Select Replacement Heifers Inc. sale data, this article uses hedonic modeling to assess the marginal implicit values of physical and genetic characteristics, expected performance characteristics of calves, and market factors to bred heifer price. In 2008, a higher quality standard, known as Tier II, was created combining minimum expected progeny difference (EPD) accuracies for a heifer's sire with previous heifer standards. Heifer characteristics and market factors as well as yearling and carcass weight EPDs were found to significantly influence heifer price. Results suggest that Tier II heifers receive a premium compared with traditional Show-Me-Select heifers.

When consumers have heterogeneous perceptions about product quality, traditional parametric methods may not provide accurate marginal valuation estimates of a product's characteristics. A quantile regression framework can be used to estimate valuations of product characteristics when quality perceptions are not homogeneous. Semiparametric quantile regressions provide identification and quantification of heterogeneous marginal valuation effects across a conditional price distribution. Using purchase price data from a bull auction, we show that there are nonconstant marginal valuations of bull carcass and growth traits. Improved understanding of product characteristic valuations across differentiated market segments can help producers develop more cost-effective management strategies.

Production timing is an essential element in fresh vegetable growers'efforts to maximize profitability and reduce income risks. The present studyuses biophysical simulation modeling coupled with a dual crop (tomatoes,sweet corn) whole-farm economic formulation to analyze the effects ofgrowers' risk aversion levels and price consideration (seasonal or annualprice consideration) in expected net returns and production practices. Thefindings indicate that consideration of seasonal price trends results inhigher expected net returns and greater opportunities to mitigate risk.Furthermore, risk aversion levels substantially influence production timingwhen seasonal price trends are considered.

Using farm-level panel data from the U.S. Census of Agriculture, this research examines whether hog producers with production contracts increased output more, or were more likely to survive in business over 5 years, compared with independent producers. Additionally, this research examines whether independent producers who adopted a production contract grew more than similar independent operations who did not contract. The local availability of contracts serves as an instrumental variable to address the potential endogeneity of the contracting decision. Results indicate that the use and adoption of production contracts affect farm size growth and survival differently depending on the initial size of an operation.

This study examines U.S. crop producers' perceptions of climate change, itseffects on crop agriculture, and likely ways farmers would adapt to weatherextremes. Based on a survey of crop producers in four states, we find that asignificant proportion of farmers do not perceive that climate change hasbeen scientifically proven and do not believe that it will adversely affectaverage crop yields and yield variability. Farmers are likely to diversifycrops, buy crop insurance, modify lease arrangements, and exit farming inresponse to extreme weather caused by climate change.

This study sought to determine whether monthly revisions of U.S. Department of Agriculture current-year corn and soybean yield forecasts are correlated and whether this correlation is associated with crop size. An ex-ante measure of crop size based on percent deviation of the current estimate from out-of-sample trend is used in efficiency tests based on the Nordhaus framework for fixed-event forecasts. Results show that available information about crop size is generally efficiently incorporated in these forecasts. Thus, although this pattern may appear obvious to market analysts in hindsight, it is largely based on new information and hence difficult to anticipate.

This article investigates how information from cotton yield monitors influences the perceptions of within-field yield variability of cotton producers. Using yield distribution modeling techniques and survey data from cotton producers in 11 southeastern states, we find that cotton farmers who responded to the survey tend to underestimate within-field yield variability (by approximately 5-18%) when not using site-specific yield monitor information. Results further indicate that surveyed cotton farmers who responded to a specific question about yield monitors place a value of approximately $20/acre/year (on average) on the additional information about within-field yield variability that the yield monitor technology provides.

Using principal component analysis, a climate index is developed to estimatethe linkage between climate and crop yields. The indices based on threeclimate projections are then applied to forecast future crop yieldresponses. We identify spatial heterogeneity of crop yield responses tofuture climate change across a number of U.S. northern and southern states.The results indicate that future hotter/drier weather conditions will likelyhave significant negative impacts on southern states, whereas only mildimpacts are expected in most northern states.

In this article, possible use of climate forecasts in rainfall index insurance of hay and forage production is considered in a geographical area (southeast United States) relatively heavily impacted by the El Nino Southern Oscillation (ENSO). Analysis of the stochastic properties of rainfall, yields, and the ENSO forecasts using the copula technique shows that the forecast impact depends on the proximity to the Gulf Coast where the impact of the ENSO is more pronounced and earlier in the year. Stochastic modeling shows that the use of skillful long-term climate forecasts by the insured producers creates intertemporal adverse selection that can be precluded by offering forecast conditional premiums. The impacts on the efficiency of the rainfall index insurance and results of sensitivity analysis with respect to model parameters are discussed.

An extension of the Guerrero et al. (2010) net present value (NPV) analysisusing real options analysis (ROA) is offered to improve machineryreplacement decisions. Specifically, the feasibilities of replacing naturalgas irrigation systems with either electric or hybrid (electric/wind)systems are evaluated. Results indicate NPV and ROA criteria can yieldopposite decisions depending on the stochastic nature of the parameters,reversibility of the investment, and flexibility of investment timing. Forpolicy, NPV results indicate that replacing natural gas with a hybrid is onthe cusp of being optimal. However, ROA indicates this NPV implication maynot hold.

This article analyzes the economies of capacity use regarding hot water decontamination to reduce postslaughter risk of pathogens in meat, taking interfarm heterogeneities of Salmonella risk and costs of transportation into account, using Denmark as a case study. If risk reduction goals are stated at the processing plant level, then the exploitation of the favorable cost-effectiveness properties of hot water slaughtering requires fairly ambitious risk reduction goals and thus high use of decontamination capacity. If instead risk reduction goals are formulated for the sector as a whole, the cost-effectiveness properties can be exploited even for relatively low-risk reduction goals.

Combinations of futures and options contracts on milk and feed were simulated to determine their influence on a representative dairy farm's ability to meet cash flow requirements and reduce the variance of net income. Compared with the reference scenario of selling milk and procuring inputs on a monthly cash basis, the risk management activities did not result in a significant change in either the level or variance of net farm income. The results suggest that on average the current marketing procedure of monthly cash milk pricing and monthly feed purchases (and pricing) produces a strong built-in natural hedge for dairy farmers.

Although the negative externalities of large-scale hog production have been well studied, econometric estimates of its potentially positive labor markets effects are lacking. We use the geographic shifts in large-scale hog production between 1992 and 2007 to estimate such production's effects on local farm and nonfarm labor markets. We find that every additional 1000 head at large-scale facilities in a county generates 0.57 additional large-scale hog operation jobs, 0.04 fewer small-scale hog operation jobs, 0.16 fewer nonhog-related agricultural jobs, and 0.59 additional nonfarm jobs, for a total of 0.96 jobs. Our total estimate is lower than previous ones based on input-output modeling.