Since 1973, the U.S. economy has shifted from a position characterized by abundant and low-cost energy to one of rising energy prices and fragile energy supplies, periodically threatened by an unstable foreign political environment.

During recent years we have begun to expect increases in prices that farmers pay for inputs. Rising costs of production have adversely affected the profits of many farming operations. The greatest relative change in prices has been in interest rates, but since 1972, and particularly since 1978, energy costs have exhibited a steep climb, as shown in Figure 1 (USDA, p. 427). Energy inputs such as LP gas, which is used heavily by the poultry industry, have shown particularly larger increases. The LP gas price paid by farmers nationwide rose from 38.9 cents per gallon in 1977 to 69.7 cents per gallon in 1981, a 79 percent increase (USDA, p. 422).

Most of the research in agricultural credit in the United States is related to large-scale commercial farming. A number of such studies have tried to estimate the demand for credit (Hesser and Schuh) and/or supply of credit (Melichar).

Recently there has been a trend toward economic deregulation of transportation by the federal government. The Airline Deregulation Act of 1978, the Staggers Rail Act of 1980, and the Motor Carrier Act of 1980 have reduced the regulatory role of the federal government and, in general, place increased reliance on the market for resource allocation. Earlier, the Motor Carrier Act of 1935 exempted from economic regulation the haulage of agricultural commodities moving in interstate commerce. In spite of the historic deregulation of agricultural motor carriage and the recent move by the federal government toward deregulation, the motor carrier deregulation question remains very important in many states.

In recent years, significant changes have taken place in the food consumption patterns of American consumers. Evidence indicates that the ongoing changes in U.S. household food expenditure patterns occurred in response not only to sudden increases in food prices in the early 1970s and the recent salient inflationary period (Buse and Fleischner; Salathe), but also to demographic shifts, tastes, and preferences (LeBovit).

The continued volatility of feeder cattle prices sustains interest in hedging strategies. The stocker operator may use technical or fundamental analysis for decision guides in the hedging program. Alternatively, the stocker operator could use profit objectives to guide the operator's hedging decisions. Previous works have developed strategies based on technical tools such as moving averages (Lehenbauer), point and figure analysis (Lehenbauer), and oscillators (Russell and Franzmann). Similarly, strategies have been developed that use fundamental analysis as a decision aid (Brown). However, no work has examined, in detail, strategies based on a management by objective philosophy—although at times the popular press has emphasized this approach (Farm Futures).

The economic distortions that have been caused by federal regulation of natural gas markets have been the subject of many recent studies (Committee for Economic Development [CED]; Brickhill; Hall; MacAvoy and Pindyck; and Means). The most recent policy debate concerns the relative merits of alternatives to the price deregulation schedule of the 1978 Natural Gas Policy Act (NGPA). The range of options runs from freezing natural gas prices at current levels to complete decontrol of natural gas prices by January 1, 1986. Producers of natural gas, pipelines, distribution utilities, and end users all suffer from some sort of economic distortion under the NGPA (CED, pp. 50-60).

Due primarily to inflation, the desire to own assets for appreciation and new technology, capital needs in agriculture continue to increase rapidly. Accompanying this increase in the need for capital is an increase in the use of credit.

Demand for lignite-energy resources for the production of fuel for generating electrical power in Texas has increased significantly as a result of dramatic real price increases in the more traditional fuels, such as natural gas and crude petroleum (Kaiser).

Energy use in U.S. production of food and fiber is extensive and has increased rapidly. A threefold increase occurred from 1940 to 1970 (Carter and Yonde). Food and fiber production accounted for about 13 percent of the total energy consumed in the U.S. in 1980 (Duncan and Webb). Of the total energy use in food and fiber production, farm level production directly consumes about 21 percent (U.S. Senate Committee on Agriculture and Forestry).

Rural areas and small towns are facing new challenges as their economies grow and develop. The population influx to nonmetropolitan areas has brought new and increasing demands for community services. Preliminary 1980 census figures indicate that nonmetropolitan counties increased by about 15 percent, whereas metropolitan counties increased by about 9 percent from 1970 to 1980 (Beale).

Considerable research has been conducted to explore economies of size in the livestock auction market industry. Since auction market cost functions are expected to conform to microeconomic theory, conclusions regarding industry economies of size are often derived from estimated long-run average total cost (LRATC) functions (French; Stoddard).

Agriculture is unique with respect to the importance of weather variability on output and profits. Irrigation has long been recognized as a means of increasing yields and profits in the arid west, and recently interest in investments in supplemental irrigation in humid areas has accelerated (Brown and Skinner; Hewitt et al.; Levins; Clouser et al., Worm et al.; Schoney and Massie).

The only pesticides a farmer may use on his crops are those that are registered for such use by the U.S. Environmental Protection Agency (EPA). Registration of a particular pesticide can be withdrawn or partially restricted if the EPA determines that the risk to society outweighs the benefits of continued unrestricted use.

Canada is the most important U.S. export market for frozen concentrated orange juice, accounting for over 8 million gallons of exports each of the past 9 years. Brazil and the U.S. are the dominant suppliers of orange juice in Canada. Prior to 1975, the U.S. held more than 60 percent of the Canadian market.

During the 1960s and through 1973, a single equation demand system resulted in reasonably accurate forecasts of both pork and beef prices at the farm and retail levels (Grimes 1974a, 1974b). Errors in forecasts were primarily attributable to errors in projections of supply variables and, to a lesser extent, projections of consumer income. Some minor errors resulted from random variation, captured in an error variable.

The importance of the role played by household size and the age-sex characteristics of household membership in consumer expenditure and demand studies has been discussed by Barton, Blokland, Buse and Salathe, McClements (1977), Muellbauer (1974, 1980), Prais and Houthakker, and Price.

Recreational pursuits have been discussed by economists and others involved in the planning of public sector investment since early in the 1930s. This discussion developed from a peripheral concern to an intense interest as legislative legitimacy was gained for the use of recreational benefit measures to justify public sector investment in multiple purpose river developments. The history of recreation benefit assessment has been adequately discussed elsewhere. In this paper, the justification for inclusion of recreation benefits in economic analyses is not addressed. However, it is worth noting that emphasis has shifted over time from an almost exclusive concern with recreation opportunities provided by development activities to an emphasis upon the recreation opportunities lost in that process as well.

Current concern about the health effects of American dietary habits has led to recommendations by government officials and nutrition experts that consumers increase their consumption of vegetables (U.S. Congress, Council for Agricultural Science and Technology).