American Journal of Agricultural Economics最新文献

The emerging hemp industry is an example of an important class of agricultural products where the market extent is limited, in hemp's case by laws and regulations, causing technology adoption to interact through prices with market-level equilibrium. In this paper, we show that the equilibrium adoption rate and producer welfare impact of new technology, such as improved hemp genetics and management, are determined by the interaction between market prices and the spatial distribution of returns of both current and new technologies in the farm population. Price changes affect adoption and welfare through shifts in both the location (mean) and dispersion (variance and higher moments) of the spatial distribution of gains to the new technology. We show that an output price change may either increase or decrease the adoption rate of a new technology and in turn impact the elasticity of the market supply function. Additionally, we derive market-equilibrium measures of welfare change for both adopters and non-adopters and show how these welfare measures are affected by the spatial distribution of returns to a new technology. Our finding suggests that the interplay between new technologies and price changes is likely to have empirically important effects on regional supply and farm welfare.

Koutchadé, Obafèmi P., Carpentier, Alain, and Fabienne Femenia (2021). Modeling Corners, Kinks, and Jumps in Crop Acreage Choices: Impacts of the EU Support to Protein Crops. American Journal of Agricultural Economics 103(4): 1502–1524. https://doi.org/10.1111/ajae.12152

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We analyze the role played by the Supplemental Nutrition Assistance Program (SNAP) in alleviating or exacerbating inequality across racial and ethnic groups in food expenditures and in the resources needed to meet basic food needs (the “food resource gap”). To do this, we propose a simple framework that decomposes differences across groups in SNAP benefit transfer levels into three components: eligibility, participation, and generosity. This decomposition is then linked to differences in food expenditures and the food resource gap. Our results reveal that among the three components, differences in eligibility contribute the most to SNAP benefits differentials for Black and Hispanic households relative to White households. Given that SNAP is often a target of policy changes, we employ the framework to provide counterfactual analyses of how selected SNAP policy changes can impact group differences in benefits and, ultimately, disparities in food expenditures and the food resource gap. The proposed framework can be applied to analyze other safety net programs.

Countervailing duties are a trade policy instrument by which importing governments tax imports that are found to benefit from foreign subsidies. Thus, in effect, these duties attempt to remedy market distortions generated by foreign subsidies by further distorting market mechanisms. On March 11, 2021, the U.S. International Trade Commission issued duties ranging between 19.97% and 47.05% on Moroccan phosphate imports upon finding that Moroccan exports had been receiving unfair government subsidies. In this research, we estimate the impacts of these duties on U.S. diammonium phosphate and triple superphosphate fertilizers, as well as long-run downstream prices of five U.S. row crops with the largest phosphate usage. Using these results, we assess the implications for gross receipts in the U.S. fertilizer industry and gross margins for American farmers. We also calculate the implied change in expenditure for agricultural end users. We find that the countervailing duties have increased U.S. phosphate fertilizer prices by approximately 34% over counterfactual levels. This corresponds to an expected downstream price response ranging from around 10% for corn, cotton, and sorghum to between 1% and 4% for soybeans and wheat. This market distortion generates a $23 billion increase in gross receipts for a concentrated domestic fertilizer industry while shrinking gross margins for American farmers by 2% and 8% and increasing agricultural user expenditures by approximately $10.84 billion.

The Supplemental Nutrition Assistance Program (SNAP) aims to improve food security among low-income households and is one of the largest safety net programs in the United States. SNAP benefits are legislated at the federal level and fixed across the contiguous United States. Hence, due to regional food price differences, the real value of SNAP benefits is unequal and could have consequential impacts on program participation. This paper estimates the extent to which SNAP purchasing power differs across states by constructing the first spatially and temporally consistent Thrifty Food Plan (TFP) price index using retail scanner data for the period 2006–2016. We find that the difference in the real value of SNAP benefits between the highest and the lowest cost states ranges from 5% to 9% for a household of four during the sample period. Subsequently, we estimate the effect of real SNAP benefits on program participation. Our results show that a 10% increase in SNAP purchasing power leads to a 0.9 percentage point increase in the SNAP caseload per capita and an 8.1 percentage point increase in the SNAP caseload per eligible individual. We show that these effects would be overlooked if the TFP price index is not corrected for expenditure and outlet biases.

A growing global population and the challenges of climate change have made the need to develop new and improved wheat varieties increasingly important. Creating varieties that are more disease resistant and tolerant to changing environmental conditions such that they will be widely adopted requires breeders to understand the needs of producers. Existing literature suggests that time-invariant traits such as disease resistance and brand matter in crop adoption decisions; however, studies using common panel data approaches are unable to identify the individual effects of time-invariant variables, as they are captured by fixed effects dummies. This study uses a recently developed econometric approach—the fixed effects filter model—that can estimate the effects of time-variant, slowly changing, and time-invariant traits. Using wheat variety adoption in the Canadian Prairies as our empirical setting, we find that both time-variant traits, such as varietal adaptability, and time-invariant traits, such as resistance to stripe rust infection, are positively correlated with adoption. We also find that seed brand has a statistically significant effect on adoption. Prior panel data studies on crop adoption have not given much consideration to time-invariant variety characteristics like disease tolerance and seed brand, but a better understanding of their impact on adoption can assist breeders in responding to emerging problems, particularly new diseases, more quickly and more efficiently. This will also enhance the work by crop research institutions, prevent considerable economic loss to farmers, and improve crop production.

Most U.S. beef packers with multiple plants now openly employ multi-plant coordination. Using a Salop Circular City framework that includes negotiated and formula pricing, we demonstrate that multi-plant coordination leads to wider spreads between downstream beef prices and upstream fed cattle prices if multi-plant coordination markdowns outweigh multi-plant coordination efficiencies. Taken together with market concentration, geography and transportation costs, and cattle cycles and related beef packer capacity utilization, multi-plant coordination helps explain persistently wide farm-to-wholesale beef price spreads. We find that, as cattle inventories decline, a multi-plant coordinator will permanently shut down a plant before the same plant run as a separate profit center will shut down, which is consistent with packer behavior in recent years. We also demonstrate that adding a strategically-located packing plant, owned by an entrant firm, can narrow price spreads. This framework is important for ongoing policy discussions regarding the structure, conduct, and performance of the beef packing industry.

Are diversified firms more resilient to negative market shocks than specialized firms? We answer this question in the context of the COVID-19 pandemic by analyzing data from small- and medium-sized firms in the U.S. agrifood supply chain. We first develop revenue-based measures of firms' vertical (across supply-chain segment) and horizontal (within supply-chain segment) diversification. We then compare post pandemic outcomes of more diversified and less diversified firms using several inverse-probability weighting techniques. We find that vertical diversification reduces firms' resilience, whereas horizontal diversification increases firms' resilience.

Persistent agricultural price fluctuations in developing countries have revived interest in the theory of endogenous price instability. We examine the underlying cause of price instability in Pakistan's broiler and chick markets. To this end, we utilize findings from our fieldwork and estimates from unobserved component-models to formulate a theoretical model of endogenous price fluctuations in the chicken supply chain of Pakistan. Under standard assumptions, we derive hypotheses from our theoretical model that can be tested by using vector autoregressions and weekly data on broiler and chick (farm-gate) prices in Pakistan. Our empirical estimates conform to the predictions of our theoretical model, and evidence of endogenous dynamics in observed prices is robust to alternative specifications and estimation methods. We use numerical simulations to illustrate that empirically grounded parameterizations of our theoretical model can emulate the salient features of broiler and chick price fluctuations in Pakistan. The accumulation of evidence from our descriptive, empirical, and numerical analysis builds a compelling case for the endogenous nature of price instability in Pakistan's chicken supply chain.