An evaluation of the risk-reducing effectiveness of the Livestock Gross Margin–Dairy (LGM-Dairy) insurance program, using historical futures price data, predicts economically significant reductions in downside margin risk (24–41%) across multiple regions. Supply analysis based on the estimated risk reduction shows a small supply response, assuming minimal subsidization. A decomposition of the simulated indemnities into milk price and feed price components shows comovements in futures prices moderating the frequency and levels of indemnities.

I begin my presentation at today’s “Southern Agricultural Economics Association’s (SAEA) Lifetime Achievement Award Winners’ Symposium” by thanking those who made this award possible. Thank you to members of the selection committee and to my nominator, Dr. Michael Wetzstein, and recommenders, Drs. Steve Blank, Eduardo Seggara, and GailCramer. These individuals have seen me “grow up” in the agricultural economics profession and I am grateful for their guidance, wisdom,and friendship. I am also grateful to the members of the SAEA and the manyopportunities the Association has provided, including serving as an officer for six years and coeditor of the Association’s Journal of Agricultural and Applied Economics with Virginia Tech (VT) colleague, Darrell Bosch, for the past three years.

Increasing volatility in milk and feed prices has led to higher levels of market and financial risk for dairy farmers. We examine dairy farmer use of forward pricing methods for milk sales and feed purchases. Operators with larger herds, higher levels of education, and those farm businesses that were not organized as sole proprietorships were more likely to have used forward pricing. We also examine reasons dairy farm operators had not used these tools to date and find that the most common reason was lack of knowledge. These findings may be used to target educational seminars and outreach to dairy farm managers.

Data envelopment analysis is used to calculate technical, allocative, economic, and scale efficiencies for fields enrolled in the University of Arkansas Rice Research Verification Program. The results reveal most fields have high technical and scale efficiencies, implying inputs are used in minimum levels necessary to achieve given output levels and fields are close to optimal in size. However, most fields exhibit allocative and economic inefficiencies and do not use inputs in the right combinations necessary to achieve cost minimization. Tobit analysis indicated allocative and economic efficiencies could be improved with better variety selection and better irrigation management.

Costs and returns of pasture-based dairy production are compared with those of conventional production using matching samples. Both whole-farm and dairy enterprise-level estimates are made using the U.S. Department of Agriculture's Agricultural Resource Management Survey data. Conventional farms are matched to pasture-based farms on the basis of operation scale, scope, region, and farmer demographics and adoption of technology. Results show for pasture-based production lower net farm income on per-cow, per-hundredweight milk produced, and total bases. On an enterprise basis, results show for pasture-based production, higher net return over operating cost and lower net return over total cost per hundredweight milk produced.

This article analyzes the impacts of different levels of forest productivity scenarios, disturbance risk, and salvageable rates resulting from climate change on the economics of loblolly pine in the southern United States. Potential adaptation strategies examined include reduction in planting density and use of slash pine instead of loblolly pine. Economic returns are most sensitive to changes in disturbance risk and productivity changes as compared with the salvage rate, planting density, or species selection. Loblolly pine with low planting density economically outperforms high-density loblolly pine. Slash pine is generally a less viable option compared with loblolly pine in most cases.

After California voters decided in a state initiative to ban gestation crates and battery cages, some are asking whether other states will host similar initiatives and if they will pass. This study addresses this question by using voting data in California to predict how voters in other states would respond to a similar initiative. Results suggest that a number of states allow such initiatives and possess a demographic profile favorable to the initiative's passage. However, because these states host only a small portion of the livestock population, the impact of such initiatives on the well-being of farm animals is questionable.

The Southern Agricultural Economics Association has made great contributions to our profession. In doing so, it has provided a platform for its members to conduct research, teaching, and Extension education that contributed significantly to the economic growth and success of Southern agriculture and rural communities. I am humbled by the honor received through this Lifetime Achievement Award and want to thank the association and the many colleagues across the profession and in my department at Texas A&M University for their partnership and support over the years. I also want to thankmy wife and family for the contributions they have made to my professional career. Their interest and understanding helped me see through some of the difficult choices and times; and they were there for the celebrations as well. In this article, I have chosen a theme that, to me, has defined much of my professional career. We all have stories or life narratives. This is one of mine.

How can farmers engage in, or influence, downstream marketing activities in a way that increases returns for what would otherwise be a simple sale of a commodity at the market price? The idea of design in the context of marketing decisions of farmers evolved in my mind as the result of early experience on the farm and exposure in college to ideas that have influenced my career ever since.

The effect of negative publicity on consumer demand for brands is examined in the context of recall of a peanut butter brand as a result of pathogen contamination. The recall was associated with negative impacts for the implicated brand and positive effects on the leading competitor brand. Consumers responded to the foodborne illness outbreak within three weeks. The case demonstrates that consumer response is an incentive for companies to prevent safety lapses and that the problems of one brand do not necessarily harm rivals within the category.

Extension faculty have been educating cow-calf producers about value-added calf management programs and the premiums available at auction from these management practices for years. Despite these efforts, producers express doubt regarding the likelihood of premiums and the profitability of value-added management practices. We use matching pairs to calculate the difference in premiums and net returns between adopters and nonadopters and calculate the likelihood of positive net returns (and premiums) for individual practices and practice bundles. The probability of positive net returns ranges from 57% for dehorning to 79% for a certified vac-45 program (calves certified by a third party to be preconditioned for a minimum of 45 days, vaccinated, and dehorned) and probabilities increase with more practices adopted.

The substitution of capital for labor and new labor-saving technologies has reduced the labor required for farming, yet many farms today depend on hired labor in some form. Common in the literature is the assumption of perfectly substitutable farm labor. This has implications for the operator's off-farm labor decision. Intuitively, different forms of farm labor have different impacts on production. We use the Agricultural and Resource Management Survey to estimate the elasticity of substitution between hired and family labor. The results provide little evidence to support the popular homogeneity assumption and find labor can be unitary and complimentary under certain scenarios.

The impact of initial body condition scores on net returns from retaining beef cull cows for delayed marketing was investigated in a three-year experiment. Cows were retained either on native grass pasture or in a low-input dry lot setting. Net returns are examined across five alternative marketing periods, including culling. Sensitivity of net returns to changes in retention cost is also examined. Although a native grass pasture system was generally more profitable than a low-input dry lot system, thin and medium cows were typically more profitable than cows with higher initial body condition score regardless of the feeding system.

Environmental valuation is the branch of environmental economics in which researchers estimate the economic value of environmental goods and services. Environmental valuation has been practiced for decades. However, there are some ideas in the field of environmental valuation held by many environmental economists and nonenvironmental economists that appear to be outdated. This article discusses three such ideas: 1) that it is better to estimate willingness-to-pay values than willingness-to-accept values; 2) that stated preference valuation methods are questionable because they are based on hypothetical choices rather than real choices; and 3) that it is better to use a repeated-choice question format than a single-choice format in choiceexperiments. We discuss the origins of each idea and why the idea became prevalent in the first place. We then review recent literature, which casts doubt on the idea. We conclude with a reminder for researchers—in environmental economics and in other economic fields—to periodically reassess ideas they currently hold in light of recent research developments and in light of the context in which they are used.

This article investigates the extent to which national brand and private label (store brand) prices behave differently as food price inflation changes. Empirical tests using a range of indices support the hypotheses that rising commodity and fuel prices lead to relatively larger surges in private label prices. When food prices are rising or high, the average price difference between national brands and private labels shrinks. The findings have implications for understanding the welfare effects of private labels. Moreover, they suggest that food price inflation is stronger for low-income households as food prices rise.

A survey of 1599 randomly selected Florida households was conducted in 2012 to evaluate the consumer characteristics and economic impacts of local food purchases through retail stores, restaurants, and direct-to-consumer market channels. The total annual value of local food purchases averaged $1114 per household and represented 20.1% of food purchased for at-home consumption. The total economic impacts of local food purchases in Florida were estimated at 183,625 jobs and $10.47 billion in value-added, including regional multiplier effects for agricultural production and wholesale and retail distribution. These values are significantly higher than found in previous studies in other states.

This research applies an inverse, almost ideal demand model with seasonal adjustments to estimate price–quantity relationships among major cut flower species traded at the Dutch flower auctions. Trigonometric functions are used as a flexible and efficient alternative to standard seasonal dummies. The estimated price and scale flexibilities were all found to be statistically significant with signs as expected. The demand for all flower groups is inflexible, and most of them are quantity substitutes. Based on the estimated values for price and scale flexibilities, a potential for market timing seems to exist, i.e., flower producers may use easily available calendar information to predict prices and quantities.

Promotion programs that subsidize advertising for exported agricultural products continue to be used despite much criticism that they are an inefficient use of taxpayer money. At the same time, others have advocated for an increase in funds to support domestic advertising for fruits and vegetables. We investigate the economic and nutritional effects from changes in both export and domestic promotion expenditures for horticultural and nonhorticultural commodities. Simulation results show that even modest decreases in trade promotion expenditures coupled with a corresponding increase in domestic promotion efforts have the capacity to influence domestic market conditions, caloric intake, and nutrient consumption.

A multiobjective optimization model integrating with high-resolution geographical data was applied to examine the optimal switchgrass supply system in Tennessee that considers both feedstock cost and greenhouse gas (GHG) emissions in the system. Results suggest that the type of land converted into switchgrass production is crucial to both plant gate cost and GHG emissions of feedstock. In addition, a tradeoff relationship between cost and GHG emissions for the switchgrass supply is primarily driven by the type of land converted. The imputed cost of lowering GHG emissions in the feedstock supply system was also calculated based on the derived tradeoff curve.

Biofuel production from lignocellulosic biomass (LCB) is being advocated as an alternative to fossil-based transportation fuels in the United States. LCB-based biofuel production has the potential to mitigate greenhouse gas (GHG) emissions from the transportation sector and to enhance rural economic activity through more intense use of agricultural lands (English et al., 2006). The Renewable Fuel Standard (RFS) established in 2005 and revised in the Energy Independence and Security Act 2007 mandates 21 billion gallons of advanced biofuel (other than ethanol derived from corn starch) available for transportation use by 2022 with 16 billion gallons to be produced from LCB feedstock (U.S. Congress, 2007). Based on the recently revised One Billion Ton Update study (U. S. Department of Energy, 2011), considerable LCB feedstock, including dedicated energy crops, will be required to fulfill this goal. Notwithstanding the potential availability of LCB feedstock to meet the mandate, the cost of LCB feedstock will be an important factor influencing the sustainability of an LCB-based biofuel industrial sector.