American Journal of Agricultural Economics最新文献

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.

We examine the relationship between investments in animal breeding and productivity growth on Wisconsin dairy farms using a control function approach. We incorporate farm-level annual investment in breeding and genetics into the law of motion of productivity as in De Loecker (2013) to test the relationship between these investments and realized productivity. Our unique dataset also allows us to look at the effect of choosing bulls with high milk yield potential on productivity. Our results indicate that breeding investments made 3 years prior are associated with higher productivity of the current cohort. However, the farms with the highest level of productivity reap the lowest benefits from breeding investments, suggesting that there are diminishing returns to investing in genetics. When milk output is not quality adjusted, the contribution of breeding to productivity is undetectable, suggesting that breeding and investments in milk quality are related. We conclude that investments in breeding and genetics significantly contribute to dairy farm productivity, especially in terms of milk quality.

Recent extreme events and the disruptions they caused have made food supply chain resilience a key topic for researchers and policymakers. This paper provides input into these discussions by evaluating the efficiency and resilience properties of the leading policy proposals. We develop a conceptual model of a prototype agricultural supply chain, parameterize the model based on the empirical literature, and conduct simulations to assess the impacts on resilience and economic welfare of four key policy proposals: (i) intensified antitrust enforcement to improve market competition, (ii) subsidization of entry of additional processing capacity, (iii) prevention of price spikes through anti-price-gouging laws, and (iv) diversification of production and processing across multiple regions. Results show that some of the policies have potential to improve supply-chain resilience, but their impacts depend on the existing market structure, and resilience gains often come at the cost of reduced efficiency.

We develop a gravity trade model based on a theoretical analysis of heterogeneous firms that engage in horizontal Foreign Direct Investment (FDI) or exporting. The model allows firms' endogenous choice between exporting or FDI to impact the proportion of exporting firms and subsequently bilateral trade. Based on the theoretical results, we propose a three-stage estimation procedure: First, estimate firm selection into horizontal FDI; second, use predicted probabilities from the first stage in the estimation of firm selection into exporting; and third, use predicted probabilities from the previous two stages in the gravity estimation of bilateral trade. We apply this procedure to the European Union (EU) processed food industry, which engages in worldwide FDI and trade. We estimate a baseline model of a standard gravity equation, a two-stage model without FDI selection, and our proposed three-stage model and quantify bias corrections in the coefficient estimates of the trade friction variables in the baseline and two-stage gravity models. The bias corrections can be large. For instance, the inclusion of the proportion of Multinational Enterprises (MNEs) in the trade-selection equation leads to a sign reversal of the distance coefficient estimate and results in an upward bias correction of $��173�\%�$. The three-stage gravity corrects a downward bias of $��31�\%�$ in the coefficient estimate of distance in the baseline but an upward bias of $��77�\%�$ in the two-stage method, which indicates that the two-stage method overcorrects the downward bias in the baseline gravity.