Agriculture in the Texas High Plains depends entirely on the Ogallala Aquifer. Texas enacted water conservation legislation to address declining reserves in the aquifer. We developed an integrated regional water policy model that links a hydrology model with an economic optimization model to estimate policy impacts with respect to economic cost and water conservation. Testing the effectiveness of two policies, a groundwater extraction tax and extraction quotas, we observe that neither significantly inhibits groundwater use. Although both policies conserve similar amounts of groundwater, the regional cost of the tax policy to agriculture is more than the quota policy.

The U.S. Geological Survey has determined that irrigation in Arkansas' Delta is unsustainable. This study examines how irrigation restrictions would affect county net returns to crop production. It also considers the effect of planting less water-intensive bioenergy crops—switchgrass and forage sorghum—in the event biofuel markets become a reality. Results suggest that sustainable irrigation restrictions without bioenergy crops would decrease producer returns by 28% in the region. Introducing these alternative crops would both reduce groundwater use and may restore state producer returns, albeit with significant spatial income redistribution to crop production throughout the state.

We develop measures of technical and allocative efficiency of producers in marketing certified organic products. A stochastic output distance frontier and the associated revenue share equations are estimated using comprehensive U.S. data on certified organic producers. Farm-level measures of technical efficiency are calculated and factors that enhance performance are identified. Factors that systematically influence allocative efficiency are assessed. The revenue mix of organic producers is systematically inefficient as both male and female producers rely too heavily on revenue from organic markets relative to conventional outlets.

Dual-purpose winter wheat (fall-winter forage plus grain) production is an important economic enterprise in the southern Great Plains. Grazing termination to enable grain production is a critical decision. The objective is to determine the optimal grazing termination date for dual-purpose wheat. The value of knowing the occurrence of first hollow stem (FHS), a wheat growth threshold for grazing termination, is also determined. Results indicate that for most price situations grazing should be terminated at or before FHS. Marginal wheat returns from extended grazing were negative and the value of FHS information ranges from $1.50 to $10 per acre.

The increase in energy prices between 2004 and 2007 has several potential consequences for aggregate agriculture in the U.S. We estimate the derived input demand elasticities for energy as well as capital, labor, and materials using the differential supply formulation. Given that the derived input demand for energy is inelastic, it is more price-responsive than the other inputs. The results also indicate that the U.S. aggregate agricultural supply function is responsive to energy prices.

The increasing use of agricultural contracts and processor concentration raises concerns that processors may offer lower contract prices in absence of local competition. This study examines the price competitiveness of marketing and production contracts depending on the availability of alternative marketing options. A propensity score matching method is used to compare prices using contract data from a farm-level national survey. The results show that the absence of other contractors or spot markets in producers' areas does not lead to statistically significant price differences in agricultural contracts for most commodities, providing evidence that most agricultural processors do not exercise market power by reducing prices when other local buyers are not available.

Recent high profile incidents and public debates in the United States have highlighted the increasing interest residents have regarding animal rearing and handling practices. This paper examines resident support for national legislation that mirrors Proposition 2, which in November 2008 passed in California. Results suggest perceptions regarding animal welfare information accuracy of livestock industry and consumer groups are particularly influential determinants of voting behavior and demand. The analysis also suggests residents may not fully appreciate price or tax implications when supporting additional animal welfare legislation. Implications for livestock industry and policy makers are provided along with suggestions for additional research.

Beginning January 1, 2015, conventional cage housing for egg-laying hens is scheduled to be prohibited in California. We consider the economic implications of the new hen housing regulations on the California shell egg industry. Our data show that egg production is more costly using noncage systems than conventional cages. The main result of the new regulations will be a drastic reduction in the number of eggs produced in California, a large increase in egg shipments from out of state, little if any change in hen housing for eggs consumed in California, and little change in egg prices in California.

High natural gas prices have agricultural producers searching for alternative energy sources for irrigation. The economic feasibility of electric and hybrid (electric/wind) systems are evaluated as alternatives to natural gas powered irrigation. Texas Panhandle and Southern Kansas farms are assessed with a quarter-mile sprinkler system, three crops, and two pumping lifts. Breakeven points identify the price at which conversion from a natural gas irrigation system to an electric or hybrid system is cost effective. Results indicate electricity is a more feasible energy source for irrigation and policy changes such as net metering are necessary to make hybrid systems viable.

This study examines the dynamic effects of grain prices and energy prices on catfish feed prices and the price of food-sized catfish at the farm level. Using the autoregressive distributed lag model and bounds testing procedure, a long-run relationship between feed and farm prices and their determinants was confirmed. Given the effect of corn and soybean meal prices on catfish feed prices, and catfish fish feed prices on farm prices, the long-run responsiveness of feed prices to a percentage increase in U.S. ethanol production is 0.325, and the responsiveness of catfish farm prices is 0.064. Although both feed and farm prices increase with ethanol production, the relatively small responsiveness of farm prices when compared with feed prices suggests that catfish farmers are worse off. Results are conditional on ethanol production causing an increase in grain prices.

Conversion of poultry litter to energy can serve as a renewable energy source and provide an alternative to land application in areas where poultry production is intensive. Economies of size may limit a farmer's ability to economically use on-farm conversion. Capital costs can be spread across several poultry farmers to convert poultry litter to energy in a centralized facility. This research determined influences on the amount of litter poultry producers will to sell to a centralized conversion facility, on their willingness to invest in a conversion cooperative, and on the prices for litter required to divert litter from current uses.

Livestock producers can respond to increasing consumer demand for certain production process attributes by providing verifiable information on the practices used. Consumer willingness to pay data were used to inform producer decision-making regarding selection of verification entities for four key production process attributes in the production of pork chops and milk. The potential for informing farm-level decision-making with information about consumer demand for product and production process attributes exists beyond the two products assessed as example cases in this analysis.

This study investigates the potential impacts of food safety outbreaks on domestic shipments, imports, and prices of the produce industry. Three case studies were analyzed to assess these potential impacts: the cantaloupe outbreak of March–April 2008, the spinach outbreak of September 2006, and the tomato outbreak of June–July 2008. Data-determined historical decompositions were conducted to provide a weekly picture of domestic shipment, import, and price fluctuation transmissions. The empirical analysis based on a vector autoregression (VAR) model showed differences in the results depending on the source of the outbreak (domestic vs. imported).

Rapidly declining gasoline prices from their record high during the summer of 2008, while ethanol prices remained relatively high, made it difficult for many bio-fuel policy modelers to fully explain the impacts of U.S. bio-fuel policies on fuel prices. Using profit-maximization models for blenders, refiners, and distillers, we conduct a comparative static analysis to measure the relative magnitudes of the impacts of tax credits and blending mandates on fuel-energy market equilibrium prices. Our results indicate that first, the prices of all fuels including conventional gasoline, ethanol, and blended gasoline decline as the biofuel tax credit increases, but they increase as the rate of the blending mandate increases. Second, the shadow value of a blending mandate represents the marginal rate of substitution between the marginal price change associated with a blending mandate and the marginal price change associated with a bio-fuel tax credit. Therefore, bio-fuel policies can affect the prices of all fuels including conventional gasoline, ethanol, and blended gasoline. Finally, ethanol imports are affected by domestic blender's market-power effects, more than by the import duty imposed to offset the tax credit associated with the use of imported ethanol in the blending process.

Energy prices increased significantly following the first energy price shock of 1973. Agricultural producers found few short run substitution possibilities as relative factor prices changed. Inelastic demands resulted in total expenditures on energy inputs that have closely followed energy price changes over time. A dynamic cost function model is estimated to derive short and long run adjustments within U.S. agriculture between 1948 and 2002 to changes in relative input prices. The objective is to measure the degree of farm responsiveness to energy price changes and if this responsiveness has changed over time. Findings support inelastic demands for all farm inputs. Statistical results support moderate increases in responses to energy and other input price changes in the 1980s. However, demands for all inputs remain inelastic in both the short and long run. Estimation of share equations associated with a dynamic cost function indicates that factor adjustment to input price changes are essentially complete within 1 year.

The U.S. crop subsidies provide incentives for farmers to expand feedstock production, which benefits the biofuel producers by lowering input costs. This study develops a general equilibrium model to analyze the effects of a reduction in the U.S. crop subsidy on biofuel industries and social welfare. The impacts of feedstock policies on the biofuel market are marginal. In contrast, the biofuel mandate has a larger impact and counteracts the effects of the crop subsidy reduction. The mandate increases the demand for feedstock and causes not only grain ethanol, but also cellulosic ethanol production to rise. The mandate exacerbates the distortion, and government spending increases significantly, leading to greater welfare loss.

In response to nutria-linked degradation of much of its coastal wetlands, Louisiana established the Coastwide Nutria Control Program (CNCP) in January 2002. CNCP instituted, among other things, an "economic incentive payment” of $4.00 per delivered nutria tail from registered participants in the program. To examine whether this bounty has had an impact on nutria harvest and whether alternative bounty levels can, in general, generate additional harvesting activities, we developed a bioeconomic supply model that relates Louisiana's annual nutria harvests to a suite of economic and environmental factors. Results suggested that the annual nutria harvest is responsive to both the price received per animal and costs. Results also suggested that the nutria harvest has increased as a result of the bounty, but that the initial bounty of $4.00 per tail may be insufficient to achieve the state's goal of harvesting 400,000 animals per year but that a bounty equal to $5.00 per tail would likely achieve the stated goal.

The distributions currently used to model and simulate crop yields are unable to accommodate a substantial subset of the theoretically feasible mean-variance-skewness-kurtosis (MVSK) hyperspace. Because these first four central moments are key determinants of shape, the available distributions might not be capable of adequately modeling all yield distributions that could be encountered in practice. This study introduces a system of distributions that can span the entire MVSK space and assesses its potential to serve as a more comprehensive parametric crop yield model, improving the breadth of distributional choices available to researchers and the likelihood of formulating proper parametric models.

This discussion highlights some of the strengths and weaknesses of the literature on animal welfare. Most pointedly, the literature on the economics of animal welfare is quite scant. As exemplified by these papers, however, there is a growing body of literature, especially those related to added costs of production and consumer demand for animal welfare attributes.