We investigate the role of optimism bias in bull price expectations using incentivized lab-in-the-field experiments with Alabama and Tennessee cattle producers. We develop bull price prediction tasks and reward accurate predictions. We find that the EPD information provision prevents optimism bias from contaminating price expectations in the whole sample. However, we also document that, unlike buyers, sellers are prone to unrealistic optimistic expectations, and our results reveal that optimism bias can be moderated by the type of expected progeny difference information utilized, breed characteristics, and regional differences in cattle operations. We contribute to the literature by documenting the role of behavioral biases.

The United States Department of Agriculture Agricultural Marketing Service (USDA AMS) began publishing formula base price information in August 2021. Considerable variation in the types of cattle priced via formula has raised questions about the level of base price transparency that can be gleaned from formula base price reports. This study employs 6 years of transactions to estimate hedonic models assessing the capability of existing data to describe variation in formula base prices. Results suggest factors beyond those reported to USDA AMS by packers influence base prices. We offer suggestions for improved data collection to make hedonic modeling of base prices more effective for reporting market information.

The profitability of U.S. meat producers and the utility of U.S. meat consumers are impacted by the trade of meat. USDA publishes the most prominent publicly available meat trade projections. This study finds USDA projections typically underpredict meat export volumes and overpredict meat import volumes. USDA projections outperform naïve projections for beef and pork exports, but naïve projections at times outperform USDA projections for chicken exports and beef and pork imports, especially at shorter horizons. USDA projections exclude variety cuts, which comprise a sizeable share of beef and pork exports. There remains room for improvement in projecting U.S. meat trade.

Compared to other policy instruments that aim to change consumer behavior, information provision is perhaps the least controversial. An important question is how information in the form of carbon labels can contribute to direct food consumption toward reduced climate impact. From a policy guidance perspective, there is a need to identify how the labeling strategy affects consumers’ ability to identify lower emitting food products and the behavioral change due to carbon information. Key aspects of a carbon label are discussed, as well as the implications of different labeling schemes. Drawing on economic and behavioral theories, we propose that, to assist consumers in identifying changes in consumption that contribute to significant reductions in their climate impact, a carbon label must enable comparisons between product groups and not only within narrowly defined product groups. This suggests mandatory labeling, since producers of high-emission products are less likely to display such labels. However, it is important to consider both costs and benefits of labeling schemes and to consider complementing labeling with other policy instruments.

A typical characteristic of the wine supply chain in the Old World is the significant share of cooperatives in wine-making that coexists with investor-owned firms and on-farm wine-makers. This paper analyzes the determinants of whether grape growers deliver their grapes to a cooperative winery of which they are members, sell their grapes to outside wineries, or make their own wine on their farm. Our analysis is based on data from a typical wine-producing area in Northern Italy. The explanatory variables comprise the potential prices linked to the different grape allocations and various farmer and farm characteristics. The high share of farmers delivering their grapes to cooperatives can, to a large extent, be explained by their higher price relative to one of the spot markets. On-farm wine-making is favored by larger farms and more educated farmers.

In this article, we reconceptualize, using an extended discrete and dynamic Ostrom's classification, the specific intellectual property (IP) regimes that support geographical indications (GIs) as ‘knowledge commons’, e.g. a set of shared collective knowledge resources constituting a complex ecosystem created and shared by a group of people that has remained subject to social dilemma. Geographical names are usually considered part of the public domain. However, under certain circumstances, geographical names have also been appropriated through trademark registration. Our analysis suggests that IP laws that support GIs first emerged in Europe and spread worldwide as a response to the threat of undue usurpation or private confiscation through trademark registration. We thus emphasize the nature of the tradeoffs faced when shifting GIs from the public domain to shared common property regimes, as defined by the EU legislation pertaining to GIs. In the context of trade globalization, we also compare the pros and cons of regulating GIs ex-ante rather than engaging in ex-post trademark litigation in the courts.

Consumers tend to overestimate food risks, and news reporting that draws attention to the deadly aspects of animal disease can cause fear in consumers even when a disease is not a food safety issue. We utilize an online survey experiment with U.S. pork consumers to assess how prior knowledge of African swine fever (ASF) and how news headlines and article content can affect pork purchases. We find that consumers are generally unaware of ASF, and almost half of respondents, who are all typically pork consumers, would be unwilling to purchase pork if there were an ASF outbreak in the United States. Within our experiment consumers who have less prior knowledge of ASF hesitated to buy pork, when first hearing of an outbreak. While additional information that ASF is not a human health threat helped mitigate pork avoidance, the placement of food safety assurance in either the headline or body of the article does not show a significantly different impact on consumer willingness to pay. As part of preparation efforts for a potential outbreak, our results emphasize the role of consumers’ prior knowledge and perceptions of the disease, which relays the importance of media cooperation in proactively informing the public about ASF outbreaks and highlighting the nonimpact on human health.

Rice is a staple crop in Nigeria. Even with a push to increase domestic production, little is known about the functionality of Nigeria’s open bag markets and the preferences of consumers for specific rice attributes. Our study uses a hedonic price model to identify quality attribute preferences of consumers and potential market failures. Our results indicate that Nigerian consumers prefer rice with homogenous long slender kernels and a low presence of broken rice and are indifferent to chalkiness. The findings are useful as they can inform future strategies for rice breeders, domestic policy makers, and rice exporters.

This study builds upon the existing literature on the Working curve and backwardation to explore the impact of storage regimes on the volatility measures of substitute agricultural commodity markets. We investigate the impact of commodity fundamentals (storage regime and stocks-to-use ratio), commodity-specific financial variables (options hedging pressure-long and -short), world economic activity, market-wide volatility index, seasonality, and time-to-maturity on nearby and deferred implied volatility (IV) series of selected commodity pairs of corn-soybean and winter wheat-spring wheat. Our work confirms that, in some cases, grain and oilseed IV derived from options premia respond to shocks in commodity (and substitute commodity) fundamentals which are in line with the behaviour of volatility in futures markets. Own-storage regime effects on price variability are stronger in the selected markets, while spillover effects from substitute commodity storage regimes show a modest impact on volatilities. We also find some evidence for the stocks-to-use ratio of both corn and soybean to impact both their own and each other’s IV, while options hedging pressure has some impact only on wheat IVs.

Preconditioning cattle, a management practice of preparing cattle for feedlots as well as following a vaccination protocol for common diseases, has been shown to add value to cattle by reducing disease incidence and severity, yet it is not universally adopted. We estimated the benefits to a beef system of preconditioning weaned calves versus not preconditioning under stochastic returns. Purchasing preconditioned calves makes economic sense, but market efficiency requires complete information of the health status of the cattle, feedlot performance, along with the right market mechanisms, which may not be available in all markets.

In the United States, over 70% of milk production is priced under Federal Milk Marketing Orders (FMMOs). A primary purpose of FMMOs is to facilitate orderly allocation of milk as a limited, perishable resource among alternative uses. Fundamental to FMMOs are the regulatory prices applicable to milk used in cheese and whey (Class III), and nonfat dry milk and butter (Class IV). This work examines a novel milk pricing method based on the concept of opportunity cost for milk used in cheese and whey. This novel method may improve the functioning of FMMOs and the U.S. dairy industry.

The Florida orange juice industry has experienced great challenges—declining orange juice consumption and a domestic supply shortage that has led to increasing imports over the past decade. As growers look for a foothold, the question remains whether it is better to continue promoting orange juice (OJ) sales by focusing on the Florida “brand” or whether orange juice, in general, should be promoted using a federal marketing program. This study aims to identify the value of promoting “Florida” on OJ products to help the industry understand the potential benefits of enhancing the image of “Florida” in consumers’ perceptions of OJ.

Many cattle producers and producer organizations are concerned that the live cattle negotiated market has become too thin. The percentage of live cattle procured through direct negotiations has declined below 20%, while the percentage procured through formulas has increased to more than 60%. Most formulas are based on directly negotiated cattle prices. Proposed legislation mandating that a larger percentage of live cattle be procured through negotiations represents a market intervention. We show that live cattle futures prices are good proxies for negotiated cash prices, while being less restrictive for meeting proposed cash cattle procurement percentage requirements.

This study investigates the determinants of coffee prices received by growers in Costa Rica, paying attention to the impact of environmental, regional, quality, and international aspects in a panel data set for the period 2008–2016. We identify three groups of variables that affect domestic coffee prices. Some of them are external to the control of the coffee growers, such as the international price of green coffee or the power of multinationals; others, such as the altitude where the coffee is harvested or the berries' yield, are related to coffee quality but difficult to modify by coffee growers. The focus of our study is on the third group, which refers to differentiation strategies related to environmental certifications. More specifically, we consider two particularly relevant certifications, which are Fairtrade mills and organic coffee. We find that organic coffee berries received higher prices, but Fairtrade mills report lower average prices than other, non-certified, buyers.

This paper evaluates the impact of an increase in the federal or state minimum wage on the egg industry, where labor is a key input. This analysis uses an for Iowa, a key egg-producing state. When spread across the industry, the total negative effects of the increased minimum wage do not appear to be economically significant. This is due largely to the Iowa egg industry’s current equilibrium wage of $13.50 an hour. Thus, a $15.00 minimum wage adds only $1.50; however, to stay competitive, egg industry employers likely would increase their wage above $15.00. Despite these seemingly small effects, egg producers may struggle in the short run to respond to immediate labor expenses should Iowa or the United States not phase in its minimum wage over the course of several years.

Data from 1,422 feeder cattle teleauction lots were used to assess the impacts on profitability of the Virginia quality assured (VQA) feeder cattle program. The analysis finds higher profits for VQA cattle due to their faster turnover and lower feed costs; however, certification does not have a significant effect on price received by producers. The analysis further suggests that the cost associated with production under VQA should be considered in addition to price effects studied in previous literature.

Adapting agricultural systems to changes in seasonal precipitation is critical for the agricultural sector in Sri Lanka. This paper presents evidence on the adoption drivers and the welfare impacts of agricultural strategies adopted by Sri Lankan rice farmers to adapt to low rainfall conditions. We estimate the causal impact of adopting different adaptive strategies across three different dimensions: (a) sensitivity to water stress, (b) household productivity, and (c) household livelihood conditions. The results highlight important trade-offs faced by farmers between reducing vulnerability to water stress and maximizing profitability and welfare outcomes. These findings are important for informing policies to support climate adaptation among smallholders, and to build and improve the climate resilience of Sri Lanka's rice sector.

In October 2015, the International Agency for Research on Cancer (IARC) released a report classifying processed meat as a type 1 carcinogen. The report prompted headlines and attracted immediate public attention, but the economic impacts remain unknown. In this paper, we investigate the impacts of the IARC report on selected processed meat prices and purchases using retail scanner data from US grocery stores. We compare changes in prices and sales of selected processed meat products to a constructed synthetic control group (using a convex combination of nonmeat food products). We find a significant decrease in bacon prices in the wake of the IARC report release, but we find no evidence of a sales reduction. We find no significant changes in price and sales for ham and sausage. The pattern of price and quantity changes are consistent with downward shifts in demand and outward shifts in supply for bacon and sausage following the release of the IARC report.

Food regulations protect consumer health, mitigate environmental concerns, and promote animal welfare, but they can also hinder innovation, limit entrepreneurship, and generate higher consumer prices. This study examines the number of federal and state regulatory restrictions affecting the beef, pork, poultry, sheep, goat, and seafood industries, including processing, wholesale distribution, and retail sales. We also examine state regulatory heterogeneity associated with animal protein products. Our results suggest that protein supply chains have become subject to tens of thousands of regulatory constraints over the past half-century. We also find substantial heterogeneity in the number of state restrictions associated with animal production, indicative of large differences in the amount of administrative law across states. Results highlight that the patchwork approach of U.S. food policy creates overlapping, cumbersome guidelines for manufacturers, and given the interconnectivity of modern food supply chains, the framework can create additional hurdles for interstate commerce.

Crop revenue insurance is unique, because it involves a guarantee subsuming yield risk and highly systematic price risk. This study examines whether crop insurers could use options instead of, or in addition to, assigning policies to the Commercial Funds of the USDA Federal Crop Insurance Corporation (FCIC) as per the Standard Reinsurance Agreement (SRA) to hedge the price risk of revenue insurance policies. The behavioral model examines the optimal hedge ratio for a crop insurer with a book of business consisting of corn Revenue Protection (RP) policies. Results show that a mix of put and call options can hedge the price risk of the RP policies. The higher optimal hedge ratios of call options as compared to put options imply that the risk of increased liability due to upside price risk can be hedged using options better than downside price risk. This study also analyzed the combination of options with the SRA at 35, 50, and 75% retention levels. The zero optimal hedge ratios at each retention level and the negative correlation between RP indemnities and the option returns when the crop insurer mixed options and SRA suggest that the purchasing of options provides no additional risk protection to crop insurers beyond what is provided by the SRA despite retention limits.