This paper considers the effect of economic progress in the nonfarm sectors of urban-industrial areas on the viability of the current farm structure in the United States. These urban-industrial areas may be located in nonmetropolitan counties that are often considered part of “rural America” (Bender, et al.) Furthermore, they are best defined as those areas of nonmetropolitan America that have clusters of employment opportunities. These clusters are increasingly dominated by an array of trade and service activities although they are of lower order in the central place hierarchy than found in metropolitan areas. For example, basic medical services may be provided but there is an insufficient local market to justify many specialized medical services.

My purpose in this presentation is to give an overview or perspective on the financial situation in U.S. agriculture. Since descriptions of the situation are generally available (Easterbrook, J. Lee, Melichar-1985, ERS-USDA, van Blokland), I'll only briefly review the problem and its roots. The major emphasis of my presentation is devoted to two areas: difficulties in addressing current financial problems of the sector, and issues which deserve consideration for the future.

The effects of rail deregulation on feed transportation in the Northeast are examined through construction of a spatial equilibrium model of the Northeastern feed industry. Short-run and long-run effects of deregulation are analyzed through incorporation of rail rate structures for 1981 and 1984, respectively, into model simulations and comparison with pre-deregulation base year results (1980). The results show that the Northeast feed economy has generally benefited from rail deregulation which has led to lower transportation costs, lower feed costs and an enhanced competitive position relative to the Southeastern U.S.

Linear programming model is used to investigate the economic feasibility of utilizing stony lands for crop production in South-Western Quebec where stoniness is the major constraint. Results for the representative farms indicate that income variations are due to economies of size, differences in crop yields (experimental or farm level) and type of reclamation method used. The market values for stony lands (determined by regression technique) are higher compared with the productive values. Analysis also indicates that crop production is feasible within the parameters defined and that it is more economical to develop unutilized stony land rather than purchase prime agricultural land at current market prices. Parametric programming procedures indicate that the solutions are more sensitive to crop yields and prices than reclamation costs.

During the period of transition that culminated in our professional organization being renamed the Northeastern Agricultural and Resource Economics Association (formerly the Northeastern Agricultural Economics Council), discussion centered upon such issues as the composition of the executive committee, the election procedures for officers, financial stability, and membership involvement. As a result of such discussions, a questionnaire was designed to ascertain Association members’ attitudes towards the organization in three areas of interest: members’ professional background, members’ evaluation of the annual meeting, and attitudes towards our Journal. The objective of this survey was to establish attitudinal data for background information for future discussions concerning our Association.

The demand for electricity in the residential sector is estimated to have become less elastic for the recent period of rising real prices as compared to earlier periods of stable or falling real price. Several possible reasons for this are investigated and we conclude that demand appears to be asymmetric with respect to price in both the short and long run. We then examine whether or not this is an important factor for forecast accuracy and public policy.

Over-application of manure on cropland can cause water quality degradation. This paper reports a modeling approach for assessing tradeoffs among manure storage and handling systems as they relate to the nutrient loadings in cropland runoff, including nitrate losses to groundwater. The CREAMS simulation model provided estimates of nutrient losses. A linear optimization model was used to determine the income-nutrient loss tradeoffs. Six-month storage was profitable for farmers with average-size dairy herds, but compared to daily spreading caused increased nitrate leaching through the soil to groundwater resources. Twelve-month storage systems decreased farm profitability while decreasing the total nitrogen losses from farm fields.

Considerable attention has been given to the proper measurement, estimation, and analysis of the technological structure of aggregate U.S. agriculture (Binswanger, Brown, Ray, and Antle). During the last decade, duality theory-motivated studies have also analyzed regional farm production (Saez, and Shumway). Except for the Saez study, no attempt has been made to analyze the farm production structure of the Northeast region.1

Some of the implications of ethical preferences for traditional welfare analyses of existence values are discussed in this paper and illustrated with a lexicographic model for preference structures. Although willingness-to-pay and willingness-to-sell are well-defined, their connection with Hicksian surpluses is lost when a person is motivated by an ethical commitment to others’ welfare. Researchers need to expand contingent valuation methods to collect information on underlying motives and types of preferences in order to identify respondents who fit the neoclassical model of egoistic man.

The declining importance of tobacco production in Connecticut and Massachusetts, the likely reduction in the acreage needed to support a shrinking dairy industry, and the growing concern with agricultural land preservation have brought about considerable interest in expanding vegetable production in Southern New England. Furthermore, the proximity to major metropolitan areas gives the cited region a major advantage in the production of vegetables for the fresh market (Swackhamer).

In this paper we estimate the price and income elasticities for five sweet spreads using a two-stage budgeting procedure. The first stage modeled the consumer's budget decision as a Tobit model, where total sweet spread expenditures are based on income and demographic variables. The second stage, including only those households with nonzero first stage expenditures, was treated as a standard consumer allocation problem using the AIDS model. To incorporate population demographics, the AIDS model was expanded by specifying the constant term as a linear function of demographic variables. The coefficients for the prices and expenditures are highly significant and demand is elastic for all five goods. The most significant demographic effects are due to household size, and female food shopper. The theoretical restrictions of homogeneity and symmetry were tested and rejected for the complete system.

First-degree and second-degree stochastic dominance were used to separate a panel of 112 dairy farms with ten annual observations per farm into successful and less successful groups using four different performance measures. Logit regression using 16 independent variables was then used to determine important farm characteristics leading to farm success. High milk production and controlling hired labor and purchased feed expenses were important. The selective adoption of new technologies was also important. Optimal debt-asset ratios varied over the 10-year period.

Vermont agricultural cooperatives were surveyed to investigate key factors contributing to cooperative success. Most of the cooperatives were formed within the last 15 years. Financial, organizational, and operational data were collected for selected years from 1974–1984.

Average annual changes in gross sales were used to divide cooperatives into low-growth and high-growth groups. Selected variables were identified to classify individual cooperatives into low- or high-performance groups with discriminant analysis.

Management experience and adoption of multi-year plans were the two factors found to have the most significant influence on cooperative sales growth.