Source: TEXAS A&M UNIVERSITY submitted to NRP
ANALYSIS OF AGRICULTURAL AND RENEWABLE POLICY ON THE ECONOMIC VIABILITY OF U.S. AGRICULTURE
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
COMPLETE
Funding Source
HATCH
Reporting Frequency
Annual
Accession No.
0099058
Grant No.
(N/A)
Cumulative Award Amt.
(N/A)
Proposal No.
(N/A)
Multistate No.
(N/A)
Project Start Date
May 4, 2011
Project End Date
May 3, 2016
Grant Year
(N/A)
Program Code
[(N/A)]- (N/A)
Recipient Organization
TEXAS A&M UNIVERSITY
750 AGRONOMY RD STE 2701
COLLEGE STATION,TX 77843-0001
Performing Department
Agri Economics
Non Technical Summary
Federal policies affecting agriculture change every time a new farm bill is written. In 2012 the Congress will write a new bill. The impacts of this bill on agriculture need to be analyzed prior to passage to avoid unintended consequences and to help Congress with implementation technical changes in subsequent years.
Animal Health Component
(N/A)
Research Effort Categories
Basic
(N/A)
Applied
(N/A)
Developmental
(N/A)
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
61061103010100%
Knowledge Area
610 - Domestic Policy Analysis;

Subject Of Investigation
6110 - Economy of the United States and sectors thereof;

Field Of Science
3010 - Economics;
Goals / Objectives
The objective of this five-year proposal is to quantitatively analyze the economic impacts of farm policy changes, trade policy changes, renewable fuels policies, and GHG emission abatement policies on U.S. agriculture, U.S. trade flows, and indirect land use changes.
Project Methods
A systems approach will be used to quantify the direct, indirect and unintended economic consequences on farmer viability, U.S. agriculture, food prices, trade flows, land use, and oil prices due to changes in farm policy, trade policy, renewable fuels policy, and GHG emission policy. The proposed approach will utilize the annual Baseline from the FAPRI model and its subsequent farm and trade policy scenario runs as input in the AFPC whole farm simulation model, FLIPSIM, to project the impacts of policy changes on survivability of crop, dairy, and livestock farmers. Renewable fuel policy changes will be analyzed using results from the FAPRI model as well as AFPC's CGE model, WEAM (Bryant, Campiche, Lu, 2010). The WEAM model projects the change in food prices, land use, trade flows, oil prices, and oil trade for changes in renewable fuel policies and GHG emission regulations. A new CGE model will be developed by AFPC to quantify the impacts of policy changes on indirect land use within the U.S. as crop acreages shift to accommodate RFS II fuel production targets. The economic viability of renewable fuels developed from alternative feedstuffs will be analyzed using simulation techniques developed and used for the studies cited above. These firm/industry analyses will use price projections from the FAPRI Baselines and the output will be used in the WEAM model to assess economic impacts of these new industries.

Progress 05/04/11 to 05/03/16

Outputs
Target Audience: Farmers, farm organizations, House and Senate Agriculture Committees, tax payers, biofuels industry. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? Nothing Reported How have the results been disseminated to communities of interest? Presentations to the House and Senate Agriculture Committees and farm organizations on the farm bill options. Journal articles and conference presentations for biofuels research. World wide web for the Policy Center provided the means for disseminating the policy analysis reports. What do you plan to do during the next reporting period to accomplish the goals? Prepare analysis of farm policy options actually passed in the 2014 farm bill. Develop decision aids farmers can use to decide participation in the farm bill. Analyze the economics of alternative feed stocks for biofuels.

Impacts
What was accomplished under these goals? The Agricultural and Food Policy Center has provided numerous farm policy analyses related to the 2013 farm bill to the House and Senate Agriculture Committees. These analyses comparing the various options considered by Congress were based on the Center’s representative farm database and the FLIPSIM model. Analyses of alternative farm policies were shared with farm commodity organizations and the farm community via extension meetings and the Center’s website. Center analyses of biofuels focused on algae to diesel. The research results were presented to DOE and to the algae biodiesel industry through conference presentations and journal articles. The results suggest that under the most recent advances in biology, cultivation, harvesting, and extraction the cost of diesel is greater than $6/gallon. Further advances in science will be required to make algae based diesel competitive with conventional fuels.

Publications

  • Type: Journal Articles Status: Published Year Published: 2013 Citation: Richardson, James W. and Myriah D. Johnson. Economic Viability of a Reverse Engineered Algae Farm (REAF). Algal Research, (2013) http://dx.doi.org/10.1016/j.algal.2013.10.002.
  • Type: Other Status: Published Year Published: 2013 Citation: Richardson, James W., Joe L. Outlaw, George M. Knapek, J. Marc Raulston, Brian K. Herbst, David P. Anderson, Henry L. Bryant, Steven L. Klose, and Peter Zimmel. Representative Farms Economic Outlook for the January 2013 FAPRI/AFPC Baseline. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 13 1, January 2013.
  • Type: Other Status: Published Year Published: 2013 Citation: Richardson, James W., Joe L. Outlaw, George M. Knapek, J. Marc Raulston, Brian K. Herbst, David P. Anderson, and Steven L. Klose. Representative Farms Economic Outlook for the January 2013 FAPRI/AFPC Baseline. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Paper 13 1, January 2013.
  • Type: Other Status: Published Year Published: 2013 Citation: Richardson, James W., Joe L. Outlaw, George M. Knapek, and J. Marc Raulston. Economic Outlook for Representative Cotton Farms Given the August 2013 FAPRI/AFPC Baseline. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Paper 13 2, November 2013.
  • Type: Other Status: Published Year Published: 2013 Citation: Richardson, James W. and Joe L. Outlaw. Economic Contributions of the U.S. Cotton Industry to the U.S. Economy. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Research Paper 13 2, November 2013.
  • Type: Other Status: Published Year Published: 2013 Citation: Monge, J. and Bryant, H.L.: A Detailed Land Rent Database for U.S. Agriculture and Forestry, Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Research Paper 13 1, March 2013.
  • Type: Journal Articles Status: Published Year Published: 2013 Citation: Outlaw, J. L. "The Evolution of the U.S. Farm Bill." International Journal of Agricultural Management, Volume 3, Issue 1, 2013, pp. 1-2.
  • Type: Journal Articles Status: Published Year Published: 2013 Citation: Anderson, D.P. Adventures in Thin Markets, Contracting, and Concentration: Todays Lamb Market. Vol. 67 Western Section American Society of Animal Science. June, 2013.
  • Type: Other Status: Published Year Published: 2013 Citation: Richardson, James W. and Myriah D. Johnson. Economic and Financial Assessment of Algae Biofuels Technologies Developed by NAABB. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 13 2, October 2013.
  • Type: Other Status: Published Year Published: 2013 Citation: Richardson, James W., Joe L. Outlaw, George M. Knapek, J. Marc Raulston, Henry L. Bryant, Brian K. Herbst, and David P. Ernstes. Economic Impacts of the Safety Net Provisions in the Senate (S. 954) and House (H.R. 2642) 2013 Farm Bills on AFPCs Representative Crop Farms. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 13 3, October 2013.
  • Type: Journal Articles Status: Published Year Published: 2013 Citation: Hagerman, A.D., M.P. Ward, D.P. Anderson, J.C. Looney, and B.A. McCarl. Rapid Effective Trace-Back Capability Value: A Case of Foot and Mouth Disease in the Texas High Plains. Journal of Preventive Veterinary Medicine (2013). 10.1016/j.prevetmed.2012.12.011.
  • Type: Journal Articles Status: Published Year Published: 2013 Citation: Power, G.J., D.V. Vedenov, D.P. Anderson, and S. Klose (2013): Market Volatility and the Dynamic Hedging of Multi-Commodity Price Risks. Applied Economics. 45:27, 3891-3903.
  • Type: Other Status: Published Year Published: 2013 Citation: Welch, J.M., D.P. Anderson, J. Robinson, M. Waller, S. Bevers, R, Hogan, S. Amosson, D. McCorkle, J. Smith, and E. Williams. Have Concerns Over Futures Market Integrity Impacted Producer Price Risk Management Practices? Choices. Fourth Quarter, 2013.


Progress 10/01/13 to 09/30/14

Outputs
Target Audience: Target audiences included: Congressional staffers, farmers, ranchers, extension educators, agribusiness, and government employees with USDA associated with farm policy analysis and implementation. Efforts included: publications in refereed journals, extension/agricultural experiment station reports, popular press, professional meeting presentations, publications on the website, and pod casts posted on the website. All of these communication avenues were used to disseminate the results of our research. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? Center personnel held more than 200 meetings to educate farmers and agribusinesses on the farm bill and the AFPC farm bill decision aid. More than 4,000 people were educated in the process. Thousands of hits on the AFPC website were recorded from people viewing research publications on the farm bill, viewing pod casts on the bill, and accessing the decision aid. How have the results been disseminated to communities of interest? The Policy Center website has been used extensively as well as in meetings with clientele. The website is www.afpc.tamu.edu. What do you plan to do during the next reporting period to accomplish the goals? Continue training farmers and landowners on the 2014 farm bill decision aid. Expand efforts to develop a sector agricultural economics and policy model for U.S. agriculture. Presently the model includes crops, dairy, and beef cattle. The poultry sector will be estimated in 2015 and then all sectors will be brought together. Continue farm level policy analyses and presenting reports on the 5 year outlook for representative farms in principal production regions.

Impacts
What was accomplished under these goals? The U.S. Congress passed the 2014 Farm Bill and in February 2014 it was made law. The policy research on this project has focused heavily on educating farmers and agribusinesses as to the implications of the farm bill. More than 200 meetings were held in 2014, reaching more than 2,500 people. The primary education tool has been a web-based Decision Aid offered for free on the afpc.tamu.edu website. The Decision Aid allows farmers and landowners to enter their data as to crops, practices, farm program history, insurance enrollment, and location of the farm/crop unit. The user’s data are stored in the AFPC server so the user can run the yield update, base reallocation, and the ARC-IC, ARC-CO, and PLC elections multiple times over the election period which ends March 31st. The Decision Aid is a Monte Carlo simulation model which simulates national crop prices for all 21 covered commodities plus cotton as well as county and farm yields for the crops analyzed by the user. A Latin hypercube, multivariate methodology is used to insure an adequate sampling is used and to incorporate historical correlation among variables. So far more than 8,900 users have enrolled in the Decision Aid and they have entered more than 13,000 farms. Google analytics shows 13,402 users on Dec 8th with 244,000 page views and an average session duration of 18 minutes. There are users in all 50 states. On the renewable fuels front we published three journal articles on the economics of algae for biofuel. The conclusions are that presently the cost of production is so high there is zero chance of economic profits. Sensitivity analyses show that if the industry/scientists could cut CAPEX 60% and cut OPEX 60% there is better than a 75% probability of economic viability. An economic simulation model of Brazilian sugar cane and ethanol plants was completed. A journal article on the model is in second review. Results suggest that at current world prices for sugar and fuel the industry will continue to be economically viable. The Agricultural and Food Policy Center’s representative farm model (FLIPSIM) was expanded to include all of the final changes in the 2014 farm bill for STAX, SCO, ARC, and PLC. The farm level database used for policy analysis was 30% updated in 2014. The representative farms were used to project economic viability of crop, cattle, and dairy farms under the 2014 farm bill assuming the December 2014 FAPRI Baseline. The lower corn, wheat, and cotton prices reduced the economic viability for grain and cotton farms. However, lower corn and soybean meal prices benefitted cattle and dairy farms relative to the January 2014 baseline. An economic analysis of atoxigenic mitigation methods for aflatoxin in corn in Central Texas was completed. The atoxigenic mitigation methods showed economic benefits in excess of their costs. However, adoption will be delayed as producers who do not use mitigation procedures and buy revenue protection insurance find it more profitable than producers who mitigate aflatoxin and buy revenue protection insurance.

Publications

  • Type: Other Status: Published Year Published: 2014 Citation: Richardson, J.W., Outlaw, J.L., Knapek, G.M., and Raulston, J.M. 2014. Climate Change Project - Texas Representative Feedgrain Farms. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Research Paper 14 1, February 2014.
  • Type: Other Status: Published Year Published: 2014 Citation: Richardson, J.W., Outlaw, J.L., Knapek, G.M., and Raulston, J.M. 2014. Climate Change Project - Nebraska Representative Feedgrain Farms. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Research Paper 14 2, February 2014.
  • Type: Other Status: Published Year Published: 2014 Citation: Richardson, J.W., Outlaw, J.L., Knapek, G.M., and Raulston, J.M. 2014. Climate Change Project - Iowa Representative Feedgrain Farms. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Research Paper 14 3, February 2014.
  • Type: Other Status: Published Year Published: 2014 Citation: Richardson, J.W., Outlaw, J.L., Knapek, G.M., and Raulston, J.M. Herbst, B.K., Anderson, D.P., Bryant, H.L., Klose, S.L., and Zimmel, P. 2014. Representative Farms Economic Outlook for the January 2014 FAPRI/AFPC Baseline. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 14 1, May 2014.
  • Type: Other Status: Published Year Published: 2014 Citation: Richardson, J.W., Outlaw, J.L., Knapek, G.M., and Raulston, J.M. Herbst, B.K., Anderson, D.P., and Klose, S.L. 2014. Representative Farms Economic Outlook for the January 2014 FAPRI/AFPC Baseline. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Paper 14 1, May 2014.
  • Type: Book Chapters Status: Published Year Published: 2014 Citation: Richardson, J.W. Computer Modeling: Policy Analysis and Simulation. In: Neal Van Alfen, editor-in-chief. Encyclopedia of Agriculture and Food Systems, Vol. 2, San Diego: Elsevier; 2014. pgs. 359-374.
  • Type: Book Chapters Status: Published Year Published: 2014 Citation: Richardson, J.W., Hennessy, T. and ODonoghue, C. 2014. "Farm Level Models" In Handbook of Microsimulation Modelling. Published online: 30 Oct 2014; 505-534. Permanent link to this document: http://dx.doi.org/10.1108/S0573-855520140000293016
  • Type: Conference Papers and Presentations Status: Other Year Published: 2014 Citation: Richardson, J.W. and Outlaw, J.L. 2014. Economic and Nutritional Impacts of Small Irrigation Projects on Small Holder Farms in Ethiopia. Presented paper at the 2014 Hawaii International Conference on Business, Honolulu, Hawaii, May 22-25.
  • Type: Conference Papers and Presentations Status: Other Year Published: 2014 Citation: Johnson, M., Anderson, D., Sawyer, J., Wickersham, T., and Richardson, J. 2014. A Range of Possibilities: Probabilistic Outcomes of Beta Agonist Removal from U.S. Beef Production. Presented paper at the 2014 Western Agricultural Economics Association annual meetings, Colorado Springs, Colorado, June 22-24.
  • Type: Conference Papers and Presentations Status: Other Year Published: 2014 Citation: Raulston, J.M., Knapek, G., Richardson, J., and Outlaw, J. 2014. Drought: A Case Study of Adaptation on a South Texas Cotton and Grain Farm. Presented paper at the 2014 Western Agricultural Economics Association annual meetings, Colorado Springs, Colorado, June 22-24.
  • Type: Conference Papers and Presentations Status: Other Year Published: 2014 Citation: Knapek, G., Richardson, J., Outlaw, J., and Raulston, J.M. 2014. An Evaluation of Farm Bill Alternatives for Western Wheat Farms. Presented paper at the 2014 Western Agricultural Economics Association annual meetings, Colorado Springs, Colorado, June 22-24.
  • Type: Conference Papers and Presentations Status: Other Year Published: 2014 Citation: Herbst, B., Anderson, D., Outlaw, J., and Richardson, J. 2014. What Decision Will Western Dairies Make Under the New Farm Bill Dairy Program. Presented paper at the 2014 Western Agricultural Economics Association annual meetings, Colorado Springs, Colorado, June 22-24.
  • Type: Theses/Dissertations Status: Published Year Published: 2014 Citation: Sampson, J. 2014. Economic Analysis of Atoxigenic Mitigation Methods for Aflatoxin in Corn in Central Texas. Department of Agricultural Economics, Texas A&M University, Ph.D. Dissertation, May.
  • Type: Theses/Dissertations Status: Published Year Published: 2014 Citation: Rhew, C. 2014. Economic Impact Analysis of Exchange Rate, RFS2, and Farm Program Support Changes on the U.S. Crop Sector. Department of Agricultural Economics, Texas A&M University, Ph.D. Dissertation, August.
  • Type: Theses/Dissertations Status: Published Year Published: 2014 Citation: McNair, R.G. 2014. The Renewable Fuel Standard and Ethanol Pricing: A Sensitivity Analysis. Department of Agricultural Economics, Texas A&M University, Master of Science Thesis, May.
  • Type: Theses/Dissertations Status: Published Year Published: 2014 Citation: Maisashvili, A. 2014. Essays on the Effect of Biofuels on Agricultural Markets. Department of Agricultural Economics, Texas A&M University, Ph.D. Dissertation, May.
  • Type: Journal Articles Status: Published Year Published: 2014 Citation: Richardson, J.W., Johnson, M.D., Zhang, X., Zemke, P., Chen, W., and Hu, Q. 2014. A Financial Assessment of Two Alternative Cultivation Systems and Their Contributions to Algae Biofuel Economic Viability. Algal Research 4, pgs 96-104. http://dx.doi.org/10.1016/j.algal.2013.12.003.
  • Type: Journal Articles Status: Published Year Published: 2014 Citation: Richardson, J.W. and Johnson, M.D. 2014. Economic Viability of a Reverse Engineered Algae Farm (REAF). Algal Research, 3: 66-70, http://dx.doi.org/10.1016/j.algal.2013.10.002.
  • Type: Journal Articles Status: Published Year Published: 2014 Citation: Monge, J.J., Ribera, L.A., Jifon, J.L., da Silva, J.A. and Richardson, J.W. 2014. Economics and Uncertainty of Lignocellulosic Biofuel Production from Energy Cane and Sweet Sorghum in South Texas. Journal of Agricultural and Applied Economics, 46,4(November):457-485.
  • Type: Journal Articles Status: Published Year Published: 2014 Citation: Falconer, L.L., Walker, T.W. and Richardson, J.W. 2014. Economic Evaluation of Fertilizer Reduction Incentive Programs for Rice Producers. Journal of the American Society of Farm Managers and Rural Appraisers, Vol. 77, No. 1 (June): 214-228.
  • Type: Journal Articles Status: Published Year Published: 2014 Citation: Richardson, J.W., Johnson, M.D., Lacey, R., Ayler, J., Capareda, S. 2014. Harvesting and Extraction Technology Contributions to Algae Biofuels Economic Viability. Algal Research, 5: 70-78.
  • Type: Journal Articles Status: Published Year Published: 2014 Citation: Monge, J. and Bryant, H. 2014. Development of Regional Social Accounting Matrices with Detailed Land Use Data in the United States. Economic Systems Research. Published online: 10 Mar 2014 (DOI:10.1080/09535314.2014.889663).
  • Type: Journal Articles Status: Published Year Published: 2014 Citation: Campiche, J., Outlaw, J., and Bryant, H. 2014). Agricultural Act of 2014: Commodity Programs. Choices, 2nd Quarter.


Progress 01/01/13 to 09/30/13

Outputs
Target Audience: Farmers, farm organizations, House and Senate Agriculture Committees, tax payers, biofuels industry. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? Nothing Reported How have the results been disseminated to communities of interest? Presentations to the House and Senate Agriculture Committees and farm organizations on the farm bill options. Journal articles and conference presentations for biofuels research. World wide web for the Policy Center provided the means for disseminating the policy analysis reports. What do you plan to do during the next reporting period to accomplish the goals? Prepare analysis of farm policy options actually passed in the 2014 farm bill. Develop decision aids farmers can use to decide participation in the farm bill. Analyze the economics of alternative feed stocks for biofuels.

Impacts
What was accomplished under these goals? The Agricultural and Food Policy Center has provided numerous farm policy analyses related to the 2013 farm bill to the House and Senate Agriculture Committees. These analyses comparing the various options considered by Congress were based on the Center’s representative farm database and the FLIPSIM model. Analyses of alternative farm policies were shared with farm commodity organizations and the farm community via extension meetings and the Center’s website. Center analyses of biofuels focused on algae to diesel. The research results were presented to DOE and to the algae biodiesel industry through conference presentations and journal articles. The results suggest that under the most recent advances in biology, cultivation, harvesting, and extraction the cost of diesel is greater than $6/gallon. Further advances in science will be required to make algae based diesel competitive with conventional fuels.

Publications

  • Type: Journal Articles Status: Published Year Published: 2013 Citation: Richardson, James W. and Myriah D. Johnson. Economic Viability of a Reverse Engineered Algae Farm (REAF). Algal Research, (2013) http://dx.doi.org/10.1016/j.algal.2013.10.002.
  • Type: Other Status: Published Year Published: 2013 Citation: Richardson, James W., Joe L. Outlaw, George M. Knapek, J. Marc Raulston, Brian K. Herbst, David P. Anderson, Henry L. Bryant, Steven L. Klose, and Peter Zimmel. Representative Farms Economic Outlook for the January 2013 FAPRI/AFPC Baseline. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 13 1, January 2013.
  • Type: Other Status: Published Year Published: 2013 Citation: Richardson, James W., Joe L. Outlaw, George M. Knapek, J. Marc Raulston, Brian K. Herbst, David P. Anderson, and Steven L. Klose. Representative Farms Economic Outlook for the January 2013 FAPRI/AFPC Baseline. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Paper 13 1, January 2013.
  • Type: Other Status: Published Year Published: 2013 Citation: Richardson, James W. and Myriah D. Johnson. Economic and Financial Assessment of Algae Biofuels Technologies Developed by NAABB. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 13 2, October 2013.
  • Type: Other Status: Published Year Published: 2013 Citation: Richardson, James W., Joe L. Outlaw, George M. Knapek, J. Marc Raulston, Henry L. Bryant, Brian K. Herbst, and David P. Ernstes. Economic Impacts of the Safety Net Provisions in the Senate (S. 954) and House (H.R. 2642) 2013 Farm Bills on AFPCs Representative Crop Farms. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 13 3, October 2013.
  • Type: Other Status: Published Year Published: 2013 Citation: Richardson, James W., Joe L. Outlaw, George M. Knapek, and J. Marc Raulston. Economic Outlook for Representative Cotton Farms Given the August 2013 FAPRI/AFPC Baseline. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Paper 13 2, November 2013.
  • Type: Other Status: Published Year Published: 2013 Citation: Richardson, James W. and Joe L. Outlaw. Economic Contributions of the U.S. Cotton Industry to the U.S. Economy. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Research Paper 13 2, November 2013.
  • Type: Other Status: Published Year Published: 2013 Citation: Monge, J. and Bryant, H.L.: A Detailed Land Rent Database for U.S. Agriculture and Forestry, Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Research Paper 13 1, March 2013.
  • Type: Journal Articles Status: Published Year Published: 2013 Citation: Outlaw, J. L. "The Evolution of the U.S. Farm Bill." International Journal of Agricultural Management, Volume 3, Issue 1, 2013, pp. 1-2.
  • Type: Journal Articles Status: Published Year Published: 2013 Citation: Welch, J.M., D.P. Anderson, J. Robinson, M. Waller, S. Bevers, R, Hogan, S. Amosson, D. McCorkle, J. Smith, and E. Williams. Have Concerns Over Futures Market Integrity Impacted Producer Price Risk Management Practices? Choices. Fourth Quarter, 2013.
  • Type: Journal Articles Status: Published Year Published: 2013 Citation: Anderson, D.P. Adventures in Thin Markets, Contracting, and Concentration: Todays Lamb Market. Vol. 67 Western Section American Society of Animal Science. June, 2013.
  • Type: Journal Articles Status: Published Year Published: 2013 Citation: Hagerman, A.D., M.P. Ward, D.P. Anderson, J.C. Looney, and B.A. McCarl. Rapid Effective Trace-Back Capability Value: A Case of Foot and Mouth Disease in the Texas High Plains. Journal of Preventive Veterinary Medicine (2013). 10.1016/j.prevetmed.2012.12.011.
  • Type: Journal Articles Status: Published Year Published: 2013 Citation: Power, G.J., D.V. Vedenov, D.P. Anderson, and S. Klose (2013): Market Volatility and the Dynamic Hedging of Multi-Commodity Price Risks. Applied Economics. 45:27, 3891-3903.


Progress 01/01/12 to 12/31/12

Outputs
OUTPUTS: Analyzed alternative 2012 farm bill options proposed by the House and Senate Ag Committees as to their probable economic impacts on representative crop, cattle and dairy farms. The results of the analyses were shared with economists on the House and Senate Ag Committees, USDA, farm organizations and producers. The House provision for a Price Loss Coverage (PLC) was preferred by most all producers over the Senate plan for a shallow loss coverage program. Further policy analyses were conducted for alternative dairy program changes. The House and Senate proposals were compared for 22 representative dairy farms across the United States. A Policy Baseline was prepared using the January 2012 FARI Baseline. The results showed that grain farms were likely to have higher incomes over the next five years than under the 2011 baseline. Cotton farms were expected to be in worse financial shape along with dairy farms. Research on the economics of micro algae for renewable fuel was extended this past year by expanding the Algae Income Simulator (AISIM). Economic analyses quantified the required cost reductions to make it a economically sustainable investment. Additional research was completed to quantify the economic/market value of past extracted algae residual as an animal feed. The results indicate the market would value PEAR at about $100/ton less than soybean meal. PARTICIPANTS: Dr. James W. Richardson - Co-Project Director - Directed research, prepared reports to Congress, wrote articles, presented papers at professional meetings, and made presentations to commodity groups, Congressional Ag Committees and USDA. Dr. Joe L. Outlaw - Co-Director - Directed research, prepared reports to Congress, wrote articles, presented papers at professional meetings, and made presentations to commodity groups, Congressional Ag Committees and USDA. Dr. David Anderson - Professor and Extension Economist - Conducted research and developed extension programs on impacts of farm programs on dairy, beef, sheep and crop producers. Dr. Henry Bryant - Research Associate Professor - Developed and applied econometric models to analyze impacts of increased demand for biofuel on grain and oilseed prices. Developing a world CGE model to further analyze biofuel impacts. Mr. George Knapek - Program Director for Representative Farms - Managed the updating and use of representative farms for policy analysis. Mr. Marc Raulston - Research Associate - Updated representative crop, beef, and dairy farms by meeting with panels of producers. Used the farms for farm policy analysis. Mr. Brian Herbst - Research Associate - Updated representative crop, beef, and dairy farms by meeting with panels of producers. Used the farms for farm policy analysis. Partner Organization Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri, Columbia. - They share funds from NIFA on the project. AFPC trains graduate students in the science and art of quantitative policy analysis. The graduate students involved in the project are: George Knapek (Ph.D.), Chanhe Rhew (Ph.D.), Aleksandra Maisashvili (M.S.) TARGET AUDIENCES: - Economists and staffers attached to the U.S. Congressional Agriculture Committees. - Leadership of national, regional, and state farm commodity organizations such as: wheat, corn, cotton, rice, soybeans, milk, beef, sheep and goats. - Farmers and ranchers. - Other stakeholders, such as: agricultural input suppliers, processors, and exporters. Efforts: Through the AFPC website www.afpc.tamu.edu we provide free copies of all AFPC reports on farm outlook and policy analyses. Adult education programs for commodity organizations and farmers/ranchers/and other stakeholders were held to present policy analysis results. Briefings for different policy analyses and the Baseline outlook were provided to the House and Senate Ag Committees and to the USDA World Board. Papers were presented at professional meetings and journal articles were published from the research. PROJECT MODIFICATIONS: None

Impacts
The 2012 farm bill analyses for the Senate farm bill and the House Ag Committee were provided to the Congress. The House did not consider their bill on the House Floor so the analyses were never used in floor debate or in Conference. However, the analyses helped the House Ag Committee pass their bill out of Committee. The study described how the alternative options in the House bill would affect the economic survivability of representative farms in major production areas. The dairy analysis was instrumental in helping the House Committee write the dairy title in the bill.

Publications

  • Richardson, James W., Myriah Johnson, and Joe L. Outlaw. Economic Comparison of Open Pond Raceways to Photo Bio-Reactors for Profitable Production of Algae for Transportation Fuels in the Southwest. Algal Research, 2012.
  • Bryant, Henry, Ilia Gogichaishvili, David Anderson, James Richardson, Jason Sawyer, Tryon Wickersham, and Merritt Drewery. The Value of Post-Extracted Algae Residue. Algae Research, Vol. 1, 2012, pgs. 185-193.
  • Richardson, James W., Joe L. Outlaw, George M. Knapek, J. Marc Raulston, Brian K. Herbst, David P. Anderson, and Steven L. Klose. Representative Farms Economic Outlook for the January 2012 FAPRI/AFPC Baseline. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Paper 12 1, March 2012.
  • Richardson, James W., Joe L. Outlaw, George M. Knapek, J. Marc Raulston, Brian K. Herbst, David P. Anderson, Henry L. Bryant, Steven L. Klose, and Peter Zimmel. Representative Farms Economic Outlook for the January 2012 FAPRI/AFPC Baseline. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 12 1, March 2012.
  • Outlaw, Joe L., James W. Richardson, George M. Knapek, J. Marc Raulston, and Brian K. Herbst. Economic Impacts of the Safety Net Provisions in the 2012 Senate and House Farm Bills on AFPCs Representative Crop Farms. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 12 2, July 2012.
  • Outlaw, Joe L., James W. Richardson, J. Marc Raulston, George M. Knapek, Brian K. Herbst. Farm Level Analysis of Selected Provisions of the House Agriculture Committee and Senate Farm Bills Using FAPRI Projected Prices in their August 2012 Farm Bill Analysis. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 12 3, August 2012.
  • Monge, Juan J. and Henry L. Bryant. A Static Computable General Equilibrium Model of Forestry and Agricultural Regional Markets (FARM). Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Research Report 12 3, September 2012.
  • Richardson, James W. and Myriah Johnson. Algae Income Simulation Model: AISIM. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Research Report 12 4, December 2012.
  • Richardson, James W., Joe L. Outlaw, George M. Knapek, J. Marc Raulston, Brian K. Herbst. David P. Anderson, Henry L. Bryant, Steven L. Klose, and Peter Zimmel. Representative Farms Economic Outlook for the December 2012 FAPRI/AFPC Baseline. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 12 4, December 2012.
  • Richardson, James W., Joe L. Outlaw, George M. Knapek, J. Marc Raulston, Brian K. Herbst, David P. Anderson, and Steven L. Klose. Representative Farms Economic Outlook for the December 2012 FAPRI/AFPC Baseline. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Paper 12 4, December 2012.


Progress 01/01/11 to 12/31/11

Outputs
OUTPUTS: Economic impacts of alternative farm programs for the 2012 Farm Bill were completed for 64 representative crop farms. Options considered by the House and Senate Agriculture Committees were analyzed as to their probable economic impacts on feedgrain, wheat, cotton, rice and peanut farms. The policy options analyzed included: continuation of the current farm program, the counter cyclical revenue plan, STAX, target price only, TCO and combinations of these options. The analyses showed that STAX was the best option for cotton given the target price of $.065/lb the CCREV and TP only assumed. A combination of farm policy options of STAX and TP only with TCO or STAX with CCREV and TCO appear to offer farmers the most risk protection against low incomes. Research on algae and corn stover as feedstocks for renewable fuels progressed with several presentations and model enhancements. An economic model for stress testing the economic viability of corn stover to liquid fuels and algae to biodiesel was developed. Basic research on econometrics for measuring causal relationships and for the use of co-integration to analyze cost price squeeze in agriculture were initiated. PARTICIPANTS: Dr. James W. Richardson - Co-Project Director - Directed research, prepared reports to Congress, wrote articles, presented papers at professional meetings, and made presentations to commodity groups, Congressional Ag Committees and USDA. Dr. Joe L. Outlaw - Co-Director - Directed research, prepared reports to Congress, wrote articles, presented papers at professional meetings, and made presentations to commodity groups, Congressional Ag Committees and USDA. Dr. David Anderson - Professor and Extension Economist - Conducted research and developed extension programs on impacts of farm programs on dairy, beef, sheep and crop producers. Dr. Henry Bryant - Research Associate Professor - Developed and applied econometric models to analyze impacts of increased demand for biofuel on grain and oilseed prices. Developing a world CGE model to further analyze biofuel impacts. Mr. George Knapek - Program Director for Representative Farms - Managed the updating and use of representative farms for policy analysis. Mr. Marc Raulston - Research Associate - Updated representative crop, beef, and dairy farms by meeting with panels of producers. Used the farms for farm policy analysis. Mr. Brian Herbst - Research Associate - Updated representative crop, beef, and dairy farms by meeting with panels of producers. Used the farms for farm policy analysis. Partner Organization Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri, Columbia. - They share funds from NIFA on the project. AFPC trains graduate students in the science and art of quantitative policy analysis. The graduate students involved in the project are: George Knapek (Ph.D.), Jiamin Lu (Ph.D.), Chanhe Rhew (Ph.D.), Bart Fischer (Ph.D.), Jose Juan Monge (Ph.D.), Marc Allison (M.S.), Aleksandra Maisashvili (M.S.) TARGET AUDIENCES: - Economists and staffers attached to the U.S. Congressional Agriculture Committees. - Leadership of national, regional, and state farm commodity organizations such as: wheat, corn, cotton, rice, soybeans, milk, beef, sheep and goats. - Farmers and ranchers. - Other stakeholders, such as: agricultural input suppliers, processors, and exporters. Efforts: Through the AFPC website www.afpc.tamu.edu we provide free copies of all AFPC reports on farm outlook and policy analyses. Adult education programs for commodity organizations and farmers/ranchers/and other stakeholders were held to present policy analysis results. Briefings for different policy analyses and the Baseline outlook were provided to the House and Senate Ag Committees and to the USDA World Board. Papers were presented at professional meetings and journal articles were published from the research. PROJECT MODIFICATIONS: None - research is on schedule, report preparation is on schedule.

Impacts
Under the January 2011 Baseline, 37 of the 64 crop farms are considered in good liquidity condition (less than a 25 percent chance of negative ending cash by 2015). Twelve crop farms have between a 25 percent and a 50 percent likelihood of negative ending cash, and the remaining 15 crop farms have greater than a 50 percent chance of negative ending cash. Furthermore, 44 of the 64 crop farms are considered in good equity position (less than a 25 percent chance of decreasing real net worth during the study period). Ten crop farms have between a 25 percent and 50 percent likelihood of losing real net worth, and ten crop farms have greater than a 50 percent probability of decreasing real net worth. The following discussion provides an overall evaluation by commodity considering both liquidity and equity measures. FEEDGRAIN FARMS: Nineteen of the 23 feedgrain farms are in good overall financial condition. Three are classified in marginal condition, and one is in poor condition. WHEAT FARMS: Eight of the 11 wheat farms are classified in good financial condition and three are in marginal condition; no farms are in poor condition. COTTON FARMS: Eight of the 16 cotton farms are classified in good condition, four are in marginal condition, and four are in poor condition. RICE FARMS: Two of the 14 rice farms are projected to be in good financial condition, four are in marginal condition, and eight are in poor condition. DAIRY FARMS: Eleven of the 21 dairy farms are in good overall financial condition. Five are considered to be in marginal condition, and five are in poor condition. BEEF CATTLE RANCHES: Seven of the 12 cattle ranches are classified in good financial condition, four are in marginal condition, and only one is projected to be in poor condition. The economics of fast pyrolysis to create bio-crude oil from corn stover is extremely poor given current costs of production, CAPEX and oil prices. The economics of algae farming to produce biodiesel is very bad. At the present time with current levels of technology and prices for diesel, algae farming to diesel will not make a profit even 1% of the time.

Publications

  • Gogichaishvili, Ilia. Application of Hedonic Price Modeling to Estimate the Value of Algae Meal. Department of Agricultural Economics, Texas A&M University, Master of Science Thesis, May 2011.
  • Rutland, Christopher. Life Cycle Assessment Applied to 95 Representative U.S. Farms. Department of Agricultural Economics, Texas A&M University, Master of Science Thesis, August 2011.
  • McCorkle, D.A., D. Hanselka, and D.P. Anderson. Economic Impact of Agriculture in the 12th Congressional District of Texas. Prepared for the Honorable Kay Granger, 12th Congressional District. Texas AgriLife Extension Service, Department of Agricultural Economics, The Texas A&M University System, College Station, Texas, June 2011.
  • McCorkle, D.A., D.P. Anderson, and D. Hanselka. Impact of Agriculture: Redistricting and the 11th Congressional District of Texas. Prepared for the Honorable Michael Conaway, 11th Congressional District. Texas AgriLife Extension Service, Department of Agricultural Economics, The Texas A&M University System, College Station, Texas, July 2011.
  • Anderson, D.P. June Cattle on Feed - Positive News. Cattle Market Comments. Vol. 7., No. 2. June 20, 2011.
  • Anderson, D.P. Beef Imports From Mexico. Cattle Market Comments. Vol. 7., No. 1. June 17, 2011.
  • McCorkle, D.A., R. Dudensing, D.P. Anderson, D.D. Hanselka, D. Ferguson, D. Freer, and G. Preuss. 2011. The Food and Fiber System and Production Agriculture's Contribution to the Texas Economy. MKT 3579-B, Texas AgriLife Extension Service, The Texas A&M University System, College Station, Texas, February, 2011.
  • Johnson, M., H. Bryant, D.P. Anderson, A. Herring. The Net Effect of Exchange Rates on Agricultural Inputs and Outputs. American Agricultural Economics Association meeting in Pittsburgh, Pennsylvania, July 25, 2011.
  • Richardson, James W. and Myriah Johnson. Economic Comparison of Open Pond Raceways to Photo Bio Reactors for Profitable Production of Algae for Transportation Fuels in the Southwest. Invited presentation for the 1st International Conference on Algae Biomass, Biofuels & Bioproducts. St. Louis, Missouri, July 17-20, 2011.
  • Palma, Marco A., James W. Richardson, Brad E. Roberson, Luis A. Ribera, Joe L. Outlaw, and Clyde Munster. Economic Feasibility of a Mobile Fast Pyrolysis System for Sustainable Bio-crude Oil Production. International Food and Agribusiness Management Review, Vol. 14, Issue 3, 2011.
  • Lien, Gudbrand, J. Brian Hardaker, Marcel A.P.M. van Asseldonk, and James W. Richardson. Risk Programming Analysis with Imperfect Information. Annals of Operations Research, 190: 311-323, 2011.
  • Richardson, James W., Joe L. Outlaw, George M. Knapek, J. Marc Raulston, Brian K. Herbst, David P. Anderson, Henry L. Bryant, Steven L. Klose, and Peter Zimmel. Representative Farms Economic Outlook for the January 2011 FAPRI/AFPC Baseline. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 11 1, March 2011.
  • Richardson, James W., Joe L. Outlaw, George M. Knapek, J. Marc Raulston, Brian K. Herbst, David P. Anderson, and Steven L. Klose. Representative Farms Economic Outlook for the January 2011 FAPRI/AFPC Baseline. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Paper 11 1, March 2011.
  • Fischer, Bart, James Richardson, Joe Outlaw, and Marc Allison. Economic Feasibility of Commercial Algae Oil Production in the U.S. Presented paper at the Southern Agricultural Economics Association Annual Meeting, Corpus Christi, Texas, February 5-8, 2011.
  • Raulston, J. Marc, James W. Richardson, Joe L. Outlaw, and George M. Knapek. The Farm Level Impacts of Replacing Current Farm Programs with a Whole Farm Revenue Program. Presented paper at the Southern Agricultural Economics Association Annual Meeting, Corpus Christi, Texas, February 5-8, 2011.
  • Knapek, George M., James W. Richardson, and Joe L. Outlaw. Investigating the Redundancies in Current Farm Programs. Presented paper at the Southern Agricultural Economics Association Annual Meeting, Corpus Christi, Texas, February 5-8, 2011.
  • Herbst, Brian K., David P. Anderson, Joe L. Outlaw, and James W. Richardson. The Effectiveness of Proposed Dairy Margin Insurance at Managing Margin Risk. Presented paper at the Southern Agricultural Economics Association Annual Meeting, Corpus Christi, Texas, February 5-8, 2011.
  • Richardson, James W. Assessing the Economic Success for Algae Farms Under Alternative Assumptions for Strain Selection, Cultivation, Harvesting and Extraction. Invited presentation for a one-day Pre-Congress Seminar Developing Algae Biofuels. Organized by F.O. Lichts. London, February 15, 2011.
  • Richardson, James W. Outlook for Algae as a Feedstock for Biodiesel Production. Invited presentation for Next Generation Biofuels 2011. Organized by F.O. Lichts. London, February 16-17, 2011.
  • Richardson, James W. and Bart L. Fischer. Economics of Algae for Biofuels. Presented at the Fourth Berkeley Bioeconomy Conference, The State of Biofuel and Biotechnology. M.C. Berkeley Alumni House, March 24-25, 2011.


Progress 01/01/10 to 12/31/10

Outputs
OUTPUTS: Research was completed on the economic impacts to crop farmers if the farm program was changed by replacing the direct payment (DP) with a whole farm revenue assurance program. The results for 30 representative crop farms across the U.S. showed that corn/soybean farms in the Midwest would prefer the revenue assurance and to a slight degree wheat farms in the Pacific Northwest would prefer this program. Grain farms in the rest of the U.S. as well as rice, cotton, and peanut farms would prefer the current farm program with direct payments. Results of these analyses were provided to the House Ag Committee and commodity organizations. Research on the economic outlook for representative crop and dairy farms and beef cattle ranches were completed and provided to Congress. Research on the economics of algae farming as a source for the production of renewable fuels was conducted for possible algae farms in the Southwest. Updated 36 of our 98 representative crop, dairy and beef farms for analyzing farm policy issues. During 2010, the WEAM computable general equilibrium (CGE) model received a major upgrade. This model facilitates the evaluation of economy-wide effects of large changes in technology, policy, or resource availability. This newly revised model includes greatly improved internal mathematical representations of economic equilibria, a more recent base year, and a greatly improved land use representation. The revised model facilitates work on new projects including NAABB-DOE and food insecurity effects of biofuels expansion, and underlies a forthcoming round of new publication submissions. PARTICIPANTS: Dr. James W. Richardson - Co-Project Director - Directed research, prepared reports to Congress, wrote articles, presented papers at professional meetings, and made presentations to commodity groups, Congressional Ag Committees and USDA. Dr. Joe L. Outlaw - Co-Director - Directed research, prepared reports to Congress, wrote articles, presented papers at professional meetings, and made presentations to commodity groups, Congressional Ag Committees and USDA. Dr. David Anderson - Professor and Extension Economist - Conducted research and developed extension programs on impacts of farm programs on dairy, beef, sheep and crop producers. Dr. Henry Bryant - Research Associate Professor - Developed and applied econometric models to analyze impacts of increased demand for biofuel on grain and oilseed prices. Developing a world CGE model to further analyze biofuel impacts. Mr. George Knapek - Program Director for Representative Farms - Managed the updating and use of representative farms for policy analysis. Mr. Marc Raulston - Research Associate - Updated representative crop, beef, and dairy farms by meeting with panels of producers. Used the farms for farm policy analysis. Mr. Brian Herbst - Research Associate - Updated representative crop, beef, and dairy farms by meeting with panels of producers. Used the farms for farm policy analysis. Partner Organization Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri, Columbia. - They share funds from NIFA on the project. - Dr. Scott Brown and Dr. Pat Westhoff develop sector forecasts of crop and livestock prices that are used in AFPC's representative farm analyses. - Mr. Peter Zimmel collaborates with George Knapek in updating representative farms. Cornell University Department of Agricultural Economics - Dr. Andrew Novakovic collaborates with AFPC on dairy policy analysis. Collaborator Names None Training etc. AFPC trains graduate students in the science and art of quantitative policy analysis. The graduate students involved in the project are: - George Knapek - Ph.D. - Roland Fumasi - Ph.D. - Jiamin Lu - Ph.D. - Boem Su Park - Ph.D. - Jose Juan Monge - Ph.D. - Marc Allison - M.S. - Aleksandra Maisashvili - M.S. TARGET AUDIENCES: - Economists and staffers attached to the U.S. Congressional Agriculture Committees. - Leadership of national, regional, and state farm commodity organizations such as: wheat, corn, cotton, rice, soybeans, milk, beef, sheep and goats. - Farmers and ranchers. - Other stakeholders, such as: agricultural input suppliers, processors, and exporters. Efforts: Through the AFPC website www.afpc.tamu.edu we provide free copies of all AFPC reports on farm outlook and policy analyses. Adult education programs for commodity organizations and farmers/ranchers/and other stakeholders were held to present policy analysis results. Briefings for different policy analyses and the Baseline outlook were provided to the House and Senate Ag Committees and to the USDA World Board. Papers were presented at professional meetings and journal articles were published from the research. PROJECT MODIFICATIONS: None - research is on schedule, report preparation is on schedule.

Impacts
Results for the December 2010 outlook for representative feedgrain farms shows that 19 of 23 are in good financial condition (less than a 25% chance of cash flow deficits by 2019). Two are classified in moderate condition (25% - 50% chance of cash flow deficits) and two are in poor condition (more than 50% chance of cash flow deficits by 2019). Eight of the 11 wheat farms monitored are in good financial condition with 3 in marginal and none in poor condition. Six of the 16 cotton farms are in good condition, 6 are moderate and 4 are marginal. Four of the 14 rice farms are projected in good condition, five are marginal and six are in poor condition. Ten of the 22 representative dairy farms are in good financial condition, six are in marginal condition and 6 are in poor condition. Seven of the 12 cattle ranches are in good financial condition, four are marginal and only one is projected to be in poor condition by 2019. Economic analyses of what it will take to make algae farming for biodiesel and high valued oil products profitable were done for the Southwest area. Results of individual sensitivity test were reported for four critical management variables in terms of what it will take to guarantee a 90% chance of economic success. The outcomes are as follows in terms of what the current literature value is and the amount that has to be achieved for 90% chance of success. Algae production in g/L/day must increase from a range of 0.039 - 0.058 to a range of 0.106 - 0.159. Lipid content must increase from 20% to 30% to at least 40%. The amount of high value oils (human protein supplements) must increase from 2% to 6.12%. Water depth needs to increase from 8" to 14-16" while maintaining oil production levels. Farm size will be initially optimized at 1,725 acre feet of water. Lastly the harvesting and extraction CAPEX for this larger farm must be less than $12.5 M. Combining these control variables in a system analysis shows a 90% chance of economic success with a 1,125 acre foot of water farm, 14" deep ponds, 5.56% high valued oil, production of 0.1017 - 0.1525 g/L/day, lipid content of 43.11% and harvesting CAPEX of $9.26 M. Work on causal testing reported in previous publications was extended to cover a new testing case. This work allows applied social scientists to reject causal hypotheses of the form H0: A-/->B in favor alternative hypotheses of the form H1: A --> B using only observational data (not experimental data) in the presence of unobserved, causally-related variables.

Publications

  • Richardson, James W., Joe L. Outlaw, George M. Knapek, J. Marc Raulston, Brian K. Herbst, David P. Anderson, and Steven L. Klose. Representative Farms Economic Outlook for the January 2010 FAPRI/AFPC Baseline. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Paper 10-1, March 2010.
  • Klose, Steven L., Joe L. Outlaw, James W. Richardson, Lindsey M. Higgins, and Brian K. Herbst. Equity in Farm Program Government Expenditures. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Research Paper 10-5, September 2010.
  • Richardson, James W., Joe L. Outlaw, George M. Knapek, J. Marc Raulston, Brian K. Herbst, David P. Anderson, Henry L. Bryant, Steven L. Klose, and Peter Zimmel. Representative Farms Economic Outlook for the August 2010 FAPRI/AFPC Baseline. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 10-2, October 2010.
  • Richardson, James W., Joe L. Outlaw, George M. Knapek, J. Marc Raulston, Brian K. Herbst, David P. Anderson, and Steven L. Klose. Representative Farms Economic Outlook for the August 2010 FAPRI/AFPC Baseline. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Paper 10-2, October 2010.
  • Richardson, J.W., J.L. Outlaw, and K. Schumann. Kernal Density Functions to Estimate Parameters to Simulate Stochastic Variables with Sparse Data: What is the Best Distribution. Risk Analysis VII: Simulation and Hazard Mitigation & Brownfields V. (ed.) C.A. Brebbia. Ashurst, Southampton, England. 2010, pages 3-13.
  • Maisashvili, Aleksandre. The Value of Pasture, Rangeland, Forage Rainfall Index Insurance to Texas Ranchers. Department of Agricultural Economics, Texas A&M University, Master of Science Thesis, May 2010.
  • Park, Beom Su. Modeling Structural Changes in Market Demand and Supply. Department of Agricultural Economics, Texas A&M University, Ph.D. Dissertation, August 2010.
  • Kudoyan, Olga. The Incremental Benefits of the Nearest Neighbor Forecast of U.S. Energy Commodity Prices. Department of Agricultural Economics, Texas A&M University, Master of Science Thesis, December 2010.
  • Allison, Marc S. The Future of Biofuels: An Economic Analysis of The Design and Operation of a Microalgae Facility in Texas and the Southwestern United States. Department of Agricultural Economics, Texas A&M University, Master of Science Thesis, August 2010.
  • Campiche, J.L., H.L. Bryant, and J.W. Richardson. Long-run Effects of Falling Cellulosic Ethanol Production Costs on the US Agricultural Economy. Environmental Research Letters, 5(2010) 014018, 8pgs.
  • Park, B.S., J.W. Richardson, and C. Gilliland. Effect of IRC Code 1031 on Texas Agricultural Land Price. Journal of the American Society of Farm Managers and Rural Appraisers, Vol. 73, No. 1 (June 2010): 114-129.
  • Richardson, J.W., J.L. Outlaw, and M. Allison. The Economics of Micro Algae Oil. AgBioForum, Vol. 13, No. 2, Article 4: 119-130, 2010.
  • Richardson, James W., Joe L. Outlaw, George M. Knapek, J. Marc Raulston, Brian K. Herbst, David P. Anderson, Henry L. Bryant, Steven L. Klose, and Peter Zimmel. Representative Farms Economic Outlook for the January 2010 FAPRI/AFPC Baseline. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 10-1, March 2010.


Progress 01/01/09 to 12/31/09

Outputs
OUTPUTS: Conducted basic research on making better economic decisions under risk. This focused on making the decision to sign up for ACRE or keep the conventional CCP and DP programs. Analysis tools were developed and tested with representative farms. Conducted research on developing a statistically sound method for picking the right distribution for simulating random values from sparse data. Delivered a web-based decision aid for farmers to use in analyzing ACRE on their farming operations. Analyzed the economic impacts of the 2008 farm bill on representative farms. Analyzed the impact of the House's bill on Cap and Trade. Analyzed alternative feedstocks for ethanol including sweet sorghum. PARTICIPANTS: Dr. James W. Richardson - Co-Project Director - Directed research, prepared reports to Congress, wrote articles, presented papers at professional meetings, and made presentations to commodity groups, Congressional Ag Committees and USDA. Dr. Joe L. Outlaw - Co-Director - Directed research, prepared reports to Congress, wrote articles, presented papers at professional meetings, and made presentations to commodity groups, Congressional Ag Committees and USDA. Dr. David Anderson - Professor and Extension Economist - Conducted research and developed extension programs on impacts of farm programs on dairy, beef, sheep and crop producers. Dr. Henry Bryant - Research Assistant Professor - Developed and applied econometric models to analyze impacts of increased demand for biofuel on grain and oilseed prices. Developing a world CGE model to further analyze biofuel impacts. Mr. George Knapek - Program Director for Representative Farms - Managed the updating and use of representative farms for policy analysis. Mr. Marc Raulston - Research Associate - Updated representative crop, beef, and dairy farms by meeting with panels of producers. Used the farms for farm policy analysis. Mr. Brian Herbst - Research Associate - Updated representative crop, beef, and dairy farms by meeting with panels of producers. Used the farms for farm policy analysis. Partner Organization Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri, Columbia. - They share funds from NIFA on the project. - Dr. Scott Brown and Dr. Pat Westhoff develop sector forecasts of crop and livestock prices that are used in AFPC's representative farm analyses. - Mr. Peter Zimmel collaborates with George Knapek in updating representative farms. Cornell University Department of Agricultural Economics - Dr. Andrew Novakovic collaborates with AFPC on dairy policy analysis. Collaborator Names None Training etc. AFPC trains graduate students in the science and art of quantitative policy analysis. The graduate students involved in the project are: - George Knapek - Ph.D. - Roland Fumasi - Ph.D. - Jiamin Lu - Ph.D. - Boem Su Park - Ph.D. - Jose Juan Monge - Ph.D. - Marc Allison - M.S. - Brandon Listrics - M.S. - Aleksandra Maisashvili - M.S. - Olga Kudoyan - M.S. TARGET AUDIENCES: - Economists and staffers attached to the U.S. Congressional Agriculture Committees. - Leadership of national, regional, and state farm commodity organizations such as: wheat, corn, cotton, rice, soybeans, milk, beef, sheep and goats. - Farmers and ranchers. - Other stakeholders, such as: agricultural input suppliers, processors, and exporters. Efforts: Through the AFPC website www.afpc.tamu.edu we provide free copies of all AFPC reports on farm outlook and policy analyses. Adult education programs for commodity organizations and farmers/ranchers/and other stakeholders were held to present policy analysis results. Briefings for different policy analyses and the Baseline outlook were provided to the House and Senate Ag Committees and to the USDA World Board. Papers were presented at professional meetings and journal articles were published from the research. PROJECT MODIFICATIONS: None - research is on schedule, report preparation is on schedule.

Impacts
Results of the 2008 farm bill study showed that while prices remained high, grain farmers, who are risk averse, would sign up for ACRE; but when grain prices fall to the $3.50-$4.00/bu. level for corn they do not elect ACRE. Cotton farmers are much better off staying with conventional DP and CCP programs than opting for ACRE. Rice farmers will also prefer to stay with conventional DP and CCP because the benefit of a full DP offsets the stochastic benefits of ACRE provisions. Under the December 2009 Baseline, 19 of the 64 crop farms are considered in good liquidity condition (less than a 25 percent chance of negative ending cash by 2015). Six crop farms have between a 25 percent and a 50 percent likelihood of negative ending cash, and the remaining 39 crop farms have greater than a 50 percent chance of negative ending cash. Furthermore, 24 of the 64 crop farms are considered in good equity position (less than a 25 percent chance of decreasing real net worth during the study period). Twelve crop farms have between a 25 percent and 50 percent likelihood of losing real net worth, and 28 crop farms have greater than a 50 percent probability of decreasing real net worth. The following discussion provides an overall evaluation by commodity considering both liquidity and equity measures. An analysis of the economic impacts of the House bill for Cap and Trade (HR 2454) was conducted for 98 representative farms. The results showed farms that are largely dependent on feedgrains and wheat would have greater ending cash reserves in 10 years under the Cap and Trade bill. Farms that grow rice, cotton and/or depend on irrigation would be financially worse off under HR 2454 after 10 years. Dairy farms and beef cattle ranches would be worse off financially unless they sell large quantities of feedgrains as a secondary enterprise. The study considered that farms could receive carbon credits if they switched to no-till farming practices, and that crop prices will change due to land use changes, energy input prices will increase, and the production costs of farming with no-till will change due to using chemical use and reducing diesel consumption. The full report is available on the www.afpc.tamu.edu website.

Publications

  • Bryant, H.L., Bessler, D.A. and Haigh. M.S. 2009. Disproving Causal Relationships Using Observational Data, Oxford Bulletin of Economics and Statistics, 71(2009): 357-374.
  • Dicks, M.R., Campiche, J.L., De La Torre Ugarte, D., Hellwinckel, C., Bryant, H.L. and Richardson, J.W. 2009. Land Use Implications of Expanding Biofuel Demand, Journal of Agricultural and Applied Economics, 41(2009):435-453.
  • Lien, G., J.B. Hardaker, M.A.P.M. van Asseldonk, and J.W. Richardson. 2009. Risk Programming and Sparse Data: How to Get More Reliable Results. Agricultural Systems, 101 (2009): 42-48.
  • Lien, G., J.B. Hardaker, M.A.P.M. van Asseldonk, and J.W. Richardson. 2009. Risk Programming Analysis with Imperfect Information. Annals of Operations Research, forthcoming (2009).
  • Richardson, J.W., R.J. Fumasi, C. Gilliland, J.L. Outlaw, and C. Miller. 2009. Impacts of Farm Income and Personal Income on Texas Land Values, 1965-2004. Journal of the American Society of Farm Managers and Rural Appraisers, Vol. 72, No. 1 (June 2009): 16-24.
  • Meyer, J., J.W. Richardson, and K.D. Schumann. 2009. Stochastic Efficiency Analysis with Risk Aversion Bounds: A Correction. The Australian Journal of Agricultural and Resource Economics, 53 (2009), pp 521-525.
  • Richardson, J. W. 2009. Career Planning: Is the Land Grant System for You Journal of Allied Agricultural Economics, 41,2 (August 2009): 333-336.
  • Dicks, M.R., J. Campiche, D. De La Torre Ugarte, C. Hellwinckel, H.L. Bryant, and J.W. Richardson. 2009. Land Use Implications of Expanding Biofuel Demand. Journal of Agricultural and Applied Economics, 41,2 (August 2009): 1-19.
  • Richardson, J.W., J.L. Outlaw, and M. Allison. 2009. The Economics of Micro Algae Oil. AgBioForum, forthcoming 2009.


Progress 01/01/08 to 12/31/08

Outputs
OUTPUTS: Conducted basic research on making better economic decisions under risk. This focused on making the decision to sign up for ACRE or keep the conventional CCP and DP programs. Analysis tools were developed and tested with representative farms. Conducted research on developing a statistically sound method for picking the right distribution for simulating random values from sparse data. Analyzed the economic impacts of the 2008 farm bill on representative farms. Analyzed the impact of ethanol production on food and feed prices. Analyzed alternative feedstocks for ethanol including sweet sorghum. PARTICIPANTS: Dr. James W. Richardson - Co-Project Director - Directed research, prepared reports to Congress, wrote articles, presented papers at professional meetings, and made presentations to commodity groups, Congressional Ag Committees and USDA. Dr. Joe L. Outlaw - Co-Project Director - Directed research, prepared reports to Congress, wrote articles, presented papers at professional meetings, and made presentations to commodity groups, Congressional Ag Committees and USDA. Dr. David Anderson - Associate Professor and Extension Economist - Conducted research and developed extension programs on impacts of farm programs on dairy, beef, sheep and crop producers. Dr. Henry Bryant - Research Assistant Professor - Developed and applied econometric models to analyze impacts of increased demand for biofuel on grain and oilseed prices. Developing a world CGE model to further analyze biofuel impacts. Mr. George Knapek - Program Director for Representative Farms - Managed the updating and use of representative farms for policy analysis. Mr. Marc Raulston - Research Associate - Updated representative crop, beef, and dairy farms by meeting with panels of producers. Used the farms for farm policy analysis. Mr. Brian Herbst - Research Associate - Updated representative crop, beef, and dairy farms by meeting with panels of producers. Used the farms for farm policy analysis. Mr. Roland Fumasi - Research Associate - Updated representative crop, beef, and dairy farms by meeting with panels of producers. Used the farms for farm policy analysis. Mr. Brian Frosch - Research Associate - Develop biofuels models to analyze the economic impacts of alternative feedstocks on firm survival. Partner Organization Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri, Columbia. - They share funds from CSREES on the project. - Dr. Scott Brown and Pat Westhoff develop sector forecasts of crop and livestock prices that are used in AFPC's representative farm analyses. - Mr. Peter Zimmel collaborates with George Knapek in updating representative farms. Cornell University Department of Agricultural Economics - Dr. Andrew Novakovic collaborates with AFPC on dairy policy analysis. Collaborator Names None Training etc. AFPC trains graduate students in the science and art of quantitative policy analysis. The graduate students involved in the project are: - Jody Campiche - Ph.D. - Lindsey Higgins - Ph.D. - George Knapek - Ph.D. - Roland Fumasi - Ph.D. - Jiamin Lu - Ph.D. - Brittany Morris - M.S. - Phillip Mervish - M.S. - Marc Allison - M.S. - Chris Boyer - M.S. - Matthew Gleinser - M.S. - Brandon Listrics - M.S. - Elizabeth Marley - B.S. TARGET AUDIENCES: - Economists and staffers attached to the U.S. Congressional Agriculture Committees. - Leadership of national, regional, and state farm commodity organizations such as: wheat, corn, cotton, rice, soybeans, milk, beef, sheep and goats. - Farmers and ranchers. - Other stakeholders, such as: agricultural input suppliers, processors, and exporters. Efforts: Through the AFPC website www.afpc.tamu.edu we provide free copies of all AFPC reports on farm outlook and policy analyses. Adult education programs for commodity organizations and farmers/ranchers/and other stakeholders were held to present policy analysis results. Briefings for different policy analyses and the Baseline outlook were provided to the House and Senate Ag Committees and to the USDA World Board. Papers were presented at professional meetings and journal articles were published from the research. PROJECT MODIFICATIONS: None - research is on schedule, report preparation is on schedule.

Impacts
Results of the 2008 farm bill study showed that while prices remained high, grain farmers, who are risk averse, would sign up for ACRE; but when grain prices fall to the $3.50-$4.00/bu. level for corn they do not elect ACRE. Cotton farmers are much better off staying with conventional DP and CCP programs than opting for ACRE. Rice farmers will also prefer to stay with conventional DP and CCP because the benefit of a full DP offsets the stochastic benefits of ACRE provisions. The results of research on ethanol from sweet sorghum indicate that returns on investment for sweet sorghum plants in Texas would be much lower than if ethanol is made from corn. The South Texas and Coastal Bend regions have reasonable probabilities of generating positive net present values for sweet sorghum to ethanol. The Blacklands of Texas will likely generate low rates of return and regions north of the Blacklands would likely generate negative returns for sweet sorghum to ethanol production. The food vs. fuel analysis showed that there are many economic forces which are responsible for higher feed and fuel prices, not just ethanol. The study showed that the small fraction of ag products in the consumers dollar is so small that doubling grain prices causes only small percentage increases (< 3%) in food price. Other factors identified as causing food and feed price increases are: weaker dollar, increased income growth in China and India, world shortfall in wheat production, and higher oil prices.

Publications

  • Richardson, James W., Joe L. Outlaw, George M. Knapek, J. Marc Raulston, Brian K. Herbst, Roland J. Fumasi, David P. Anderson, Henry L. Bryant, Steven L. Klose, and Peter Zimmel. 2008. Representative Farms Economic Outlook for the January 2008 FAPRI/AFPC Baseline. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 08-1, February.
  • Richardson, James W., Joe L. Outlaw, George M. Knapek, J. Marc Raulston, Brian K. Herbst, Roland J. Fumasi, David P. Anderson, and Steven L. Klose. 2008. Representative Farms Economic Outlook for the January 2008 FAPRI/AFPC Baseline. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Paper 08-1, February.
  • Anderson, David P., Joe L. Outlaw, Henry L. Bryant, James W. Richardson, David P. Ernstes, J. Marc Raulston, J. Mark Welch, George M. Knapek, Brian K. Herbst, and Marc S. Allison. 2008. The Effects of Ethanol on Texas Food and Feed. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Research Paper 08-1, April.
  • Bryant, Henry L., Joe L. Outlaw, David P. Anderson, James W. Richardson, and George M. Knapek. 2008. Analysis of the Effects of Short Corn Crop Scenarios on the Likelihood of Meeting the Renewable Fuel Standard. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Paper 08-2, June.
  • Richardson, James W., Joe L. Outlaw, George M. Knapek, J. Marc Raulston, Brian K. Herbst, David P. Anderson, and Steven L. Klose. 2008. Representative Farms Economic Outlook for the December 2008 FAPRI/AFPC Baseline. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Paper 08-3, December.
  • Richardson, James W., Joe L. Outlaw, George M. Knapek, J. Marc Raulston, Brian K. Herbst, David P. Anderson, Henry L. Bryant, Steven L. Klose, and Peter Zimmel. 2008. Representative Farms Economic Outlook for the December 2008 FAPRI/AFPC Baseline. Texas AgriLife Research, Texas AgriLife Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 08-2, December.
  • Gleinser, Matthew Alan. 2009. A Probabilistic Inventory Analysis of BioMass for the State of Texas for Cellulosic Ethanol. Department of Agricultural Economics, Texas A&M University, Master of Science Thesis, May.
  • Richardson, J.W. and J.L. Outlaw. 2008. Ranking Risky Alternatives: Innovations in Subjective Utility Analysis. In: C.A. Brebbia and E. Beriatos (eds.) Risk Analysis VI, Simulation and Hazard Mitigation. WIT Transactions on Information and Communication, Vol 39, WIT Press, pgs. 213-224.
  • Elrod, Christopher P. 2008. An Empirical Simulation Analysis on Cotton Marketing Strategies in West Texas. Department of Agricultural Economics, Texas A&M University, Master of Science Thesis, August.
  • Morris, Brittany Danielle. 2008. Economic Feasibility of Ethanol Production From Sweet Sorghum Juice in Texas. Department of Agricultural Economics, Texas A&M University, Master of Science Thesis, December.


Progress 01/01/07 to 12/31/07

Outputs
OUTPUTS: Conducted basic research on teaching farm managers how to incorporate risk into their analyses and how to make better decisions under risk. The use of target probabilities presented in the form of StopLight charts was suggested for beginners in the area of risk management. It was shown that StopLight charts can be easily interpreted by beginners and that they generally return the same risk ranking as more sophisticated procedures which are hard to describe to non-economists and require complicated mathematical calculations. PARTICIPANTS: Dr. James W. Richardson - Co-Project Director - Directed research, prepared reports to Congress, wrote articles, presented papers at professional meetings, and made presentations to commodity groups, Congressional Ag Committees and USDA. Dr. Joe L. Outlaw - Co-Project Director - Directed research, prepared reports to Congress, wrote articles, presented papers at professional meetings, and made presentations to commodity groups, Congressional Ag Committees and USDA. Dr. David Anderson - Associate Professor and Extension Economist - Conducted research and developed extension programs on impacts of farm programs on dairy, beef, sheep and crop producers. Dr. Henry Bryant - Research Assistant Professor - Developed and applied econometric models to analyze impacts of increased demand for biofuel on grain and oilseed prices. Developing a world CGE model to further analyze biofuel impacts. Mr. George Knapek - Program Director for Representative Farms - Managed the updating and use of representative farms for policy analysis. Mr. Marc Raulston - Research Associate - Updated representative crop, beef, and dairy farms by meeting with panels of producers. Used the farms for farm policy analysis. Mr. Brian Herbst - Research Associate - Updated representative crop, beef, and dairy farms by meeting with panels of producers. Used the farms for farm policy analysis. Mr. Roland Fumasi - Research Associate - Updated representative crop, beef, and dairy farms by meeting with panels of producers. Used the farms for farm policy analysis. Mr. Brian Frosch - Research Associate - Develop biofuels models to analyze the economic impacts of alternative feedstocks on firm survival. Partner Organization Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri, Columbia. - They share funds from CSREES on the project. - Dr. Scott Brown and Pat Westhoff develop sector forecasts of crop and livestock prices that are used in AFPC's representative farm analyses. - Mr. Peter Zimmel collaborates with George Knapek in updating representative farms. Cornell University Department of Agricultural Economics - Dr. Andrew Novakovic collaborates with AFPC on dairy policy analysis. Collaborator Names None Training etc. AFPC trains graduate students in the science and art of quantitative policy analysis. The graduate students involved in the project are: - Jody Campiche - Ph.D. - Lindsey Higgins - Ph.D. - George Knapek - Ph.D. - Roland Fumasi - Ph.D. - Jiamin Lu - Ph.D. - Brittany Morris - M.S. - Phillip Mervish - M.S. - Marc Allison - M.S. - Chris Boyer - M.S. - Matthew Gleinser - M.S. - Brandon Listrics - M.S. - Elizabeth Marley - B.S. TARGET AUDIENCES: - Economists and staffers attached to the U.S. Congressional Agriculture Committees. - Leadership of national, regional, and state farm commodity organizations such as: wheat, corn, cotton, rice, soybeans, milk, beef, sheep and goats. - Farmers and ranchers. - Other stakeholders, such as: agricultural input suppliers, processors, and exporters. Efforts: Through the AFPC website www.afpc.tamu.edu we provide free copies of all AFPC reports on farm outlook and policy analyses. Adult education programs for commodity organizations and farmers/ranchers/and other stakeholders were held to present policy analysis results. Briefings for different policy analyses and the Baseline outlook were provided to the House and Senate Ag Committees and to the USDA World Board. Papers were presented at professional meetings and journal articles were published from the research. PROJECT MODIFICATIONS: None - research is on schedule, report preparation is on schedule.

Impacts
Economic models of the financial risk associated with ethanol production plants in the U.S. were developed. The models were tested on corn based ethanol plants, sugarcane juice ethanol plants and a wheat based plant. Economic impact (IMPLAN) models of farm program impacts on the U.S. economy were developed and used to analyze the effects of changes in government payments for program crops. Results showed that reducing payments for direct and CCP programs and increasing CSP could increase economic activity in some states while greatly reducing economic activity in predominate agricultural production states. Risk management techniques were used to analyze ethanol production from wheat in South Africa. The methodology of stochastic financial models developed for the U.S. proved very useful in South Africa, and helped the local stakeholders understand the policy concessions necessary to make ethanol production economically feasible. Modeling efforts were expended to incorporate risk into analyzing the proposed risk management accounts in the 2007 Farm Bill. Results of the analyses showed that farmers in higher risk areas benefit less from this program because they do not generate sufficient reserves in the good years to cover the low incomes during the bad years.

Publications

  • Richardson, J.W. and J.L. Outlaw. 2007. Training Commercial Farmers How to Analyze and Rank Risky Alternatives. Proceedings of the 16th International Farm Management Association Congress: 300-316.
  • Richardson, J.W., W.J. Lemmer, and J.L. Outlaw. 2007. Bio-Ethanol Production from Wheat in the Winter Rainfall Region of South Africa: A Quantitative Risk Analysis. International Food and Agribusiness Management Review. Volume 10, Issue 2, pgs 181-204.
  • Outlaw, Joe L., James W. Richardson, George M. Knapek, J. Marc Raulston, Brian K. Herbst, Roland J. Fumasi, David P. Anderson, Steven L. Klose, and Peter Zimmel. 2007. Representative Farms Economic Outlook for the January 2007 FAPRI/AFPC Baseline. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 07-1, February.
  • Richardson, James W. and Brian K. Herbst. 2007. Economic Comparison of the Farm, Nutrition, and Bioenergy Act (H.R. 2419) to Fairness in Farm and Food Policy Amendment to H.R. 2419. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Paper 07-9, July.


Progress 01/01/06 to 12/31/06

Outputs
Focus on research in 2006 was to develop and update data bases for analysis of the 2007 farm bill. Forty representative crop, cattle and dairy farms were updated for policy analysis purposes. A second area of research involved developing a feedlot simulation model for analysis of policy and management plans. The economic data base to support the model was developed for the Texas High Plains. An economic simulation model was developed to project how CBO scores the farm bill. This model was used to project how much savings in government payments to program crops due to higher grain prices in the December FAPRI Baseline. Economic models of ethanol production in Texas from grain, cellulosic materials, and sugarcane were developed and used to project economic feasibility. Analyses of continuing the 2002 farm bill through 2011 were completed as a Baseline for 2007 farm bill analyses.

Impacts
Higher prices for grains caused by increased ethanol demand will reduce the government outlays for farm program payments to the 9 program crops. Estimated budget savings with a continuation of the farm bill is $30 billion over the next 10 years. These savings are from lower CCP and MLG/LDP payments. Ethanol production in the U.S. from sugarcane juices and molasses is economically feasible as long as ethanol prices remain above $1.75/gallon. This result is much more favorable than the report from USDA on the same subject. Our analysis assumed sugarcane growers planted more cane and produced ethanol from juice, not from sugar. The economic baseline for 66 representative crop farms and 33 dairy and beef ranches showed mixed results. Feedgrain, oilseed, and wheat farms show much stronger cash flows and equity positions in December 2006 than they have shown since 1996. Cotton and rice farms do not show significant signs of improvement. A majority of cotton and rice farms will have significant cash flow problems and loss of equity over the next five years. Dairy and beef operations appear to be in better cash flow and equity position than a year ago.

Publications

  • Richardson, James W., Joe L. Outlaw, George M. Knapek, J. Marc Raulston, Brian K. Herbst, Roland J. Fumasi, David P. Anderson, and Steven L. Klose. Representative Farms Economic Outlook for the December 2006 FAPRI/AFPC Baseline. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Paper 06-8, December 2006.
  • Outlaw, Joe L., James W. Richardson, George M. Knapek, J. Marc Raulston, Brian K. Herbst, Roland J. Fumasi, David P. Anderson, Steven L. Klose, and Peter Zimmel. Representative Farms Economic Outlook for the December 2006 FAPRI/AFPC Baseline. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 06-4, December 2006.
  • Richardson, James W., Joe L. Outlaw, George M. Knapek, J. Marc Raulston, Brian Herbst, James D. Sartwelle, III, David P. Anderson, Steven L. Klose. Representative Farms Economic Outlook for the January 2006 FAPRI/AFPC Baseline. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Paper 06-1, February 2006.
  • Outlaw, Joe L., James W. Richardson, Brian K. Herbst, George M. Knapek, David P. Anderson, James D. Sartwelle, III, J. Marc Raulston, Steven L. Klose, Peter Zimmel. Representative Farms Economic Outlook for the January 2006 FAPRI/AFPC Baseline. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 06-1, February 2006.
  • Outlaw, Joe L., James W. Richardson, Brian K. Herbst, George M. Knapek, David P. Anderson, James D. Sartwelle, III, J. Marc Raulston, Roland J. Fumasi, Steven L. Klose, Peter Zimmel. Representative Farms Economic Outlook for the August 2006 FAPRI/AFPC Baseline. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 06-2, August 2006.
  • Richardson, James W., Joe L. Outlaw, George M. Knapek, J. Marc Raulston, Brian Herbst, James D. Sartwelle, III, David P. Anderson, Steven L. Klose. Representative Farms Economic Outlook for the August 2006 FAPRI/AFPC Baseline. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Paper 06-3, August 2006.
  • Richardson, James W., Brian K. Herbst, Joe L. Outlaw, David P. Anderson, Steven L. Klose, and R. Chope Gill, II. Risk Assessment in Economic Feasibility Analysis: The Case of Ethanol Production in Texas. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Research Report 06-3, September 2006.
  • Richardson, James W., J. Marc Raulston, George M. Knapek, and Joe L. Outlaw. Analysis of the Economic Viability for Representative Wheat Farms Given Alternative Farm Policies Proposed by the National Association of Wheat Growers. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Paper 06-2, May 2006.
  • Richardson, James W., Joe L. Outlaw, George M. Knapek, and J. Marc Raulston. Economic Outlook for Representative Cotton Farms Given the August 2006 FAPRI/AFPC Baseline. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Paper 06-4, August 2006.
  • Lau, Michael H., James W. Richardson, Joe L. Outlaw, Mark T. Holtzapple, and Rene F. Ochoa. The Economics of Ethanol from Sweet Sorghum Using the MixAlco Process. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Research Report 06-2, August 2006.
  • Bryant, Henry L., Joe L. Outlaw, James W. Richardson, Lindsey M. Higgins, and Jody L. Campiche. Effects of Recent Fossil Energy Market Developments on U.S. Ethanol. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Paper 06-5, September 2006.
  • Richardson, James W., Joe L. Outlaw, George M. Knapek, Roland J. Fumasi, and J. Marc Raulston. Economic Outlook for Representative Ranches Given the August 2006 FAPRI/AFPC Baseline. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Paper 06-6, October 2006.
  • Richardson, James W., Joe L. Outlaw, George M. Knapek, Brian K. Herbst, and J. Marc Raulston. Economic Outlook for Representative Dairies Given the August 2006 FAPRI/AFPC Baseline. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Paper 06-7, October 2006.


Progress 01/01/05 to 12/31/05

Outputs
The focus on research in 2005 was to develop improved methods for incorporating risk into farm management and policy analysis. Experience in developing and delivering a Monte Carlo simulation model to producers via the web was reported at a regional conference and in a journal article. The effort proved to be much more difficult than when the project was proposed. However, the benefits to farmer/landowner decision makers is worth the effort, if the issue is of national importance. Research on a methodology to simulate experiment station test plot yield results in whole farm simulation models was explored. The research was applied to demonstrating how risk averse decision makers would rank organic vs. traditional production systems. The research was on application of SERF (stochastic efficiency with respect to a function) and Monte Carlo simulation. The effects of rapidly rising energy and fertilizer prices on the economic viability of crop farms was analyzed using the FLIPSIM model and the representative crop farms developed by AFPC.

Impacts
Results of the analyses were presented at two regional meetings and one international meeting. The new methodologies contributed to better understanding of how to model decision making under risk. The fuel and fertilizer cost increase paper will significantly benefit producers and lenders by showing how higher energy prices will affect producers, unless they change the way they farm. The higher energy prices will likely lead more farmers to use no-till and dryland rather than irrigated farming practices. A theoretical extension to SERF was developed and demonstrated in a dissertation. The extension demonstrates how confidence intervals and Student -t tests can be applied to SERF rankings of risky alternatives to calculate the confidence of rankings by decision makers with different levels of risk aversion.

Publications

  • Lien, G., O. Flaten, A. Korsaeth, K.D. Schumann, and J. W. Richardson. 2005. Comparison of Risk in Organic, Integrated and Conventional Cropping Systems in Eastern Norway. Contributed Paper at the International Farm Management Association (IFMA) 15th Congress, Cuiaba/Pantanal, Brazil, August.
  • Asheim, L.J., J.W. Richardson, K.D. Schumann, and P.A. Feldman. 2005. Stochastic Optimization: An Application to Sub-Arctic Dairy Farming. Contributed Paper at the International Farm Management Association (IFMA) 15th Congress, Cuiaba/Pantanal, Brazil, August.
  • Lien, G., Flaten, O., Korsaeth, A., Schumann, K.D., Richardson, J.W., Eltun, R. 2005. Comparison of risk between cropping systems in Eastern Norway. Selected Paper at the XIth International EAAE Congress, August 24-27, Copenhagen.
  • Schumann, Keith. Resampling Confidence Regions and Test Procedures for Second Degree Stochastic Efficiency with Respect to a Function. Department of Statistics, Texas A&M University, PhD in Statistics. August 2005.
  • Richardson, J.W. and Joe L. Outlaw. 2005. Web Delivery of a Monte Carlo Simulation Model: The Base and Yield Analyzer Experience. Journal of Agricultural and Applied Economics, 37,2(August):425-431.
  • Lien, G., Flaten, O., Korsaeth, A., Schumann, K.D., Richardson, J.W., Eltun, R., Hardaker, J.B. 2005. Comparison of Risk in Organic, Integrated and Conventional Cropping Systems in Eastern Norway. Journal of Farm Management: Journal of the Institute of Agricultural Management. Forthcoming.
  • Raulston, J.M., G.M. Knapek, J.L. Outlaw, J.W. Richardson, S.L. Klose, and D.P. Anderson. 2005. Impacts of Rising Energy Prices on Incomes of Representative Farms in the Western United States. Western Economics Forum, forthcoming. Richardson, J.W. 2005. Simulation for Applied Risk Management. Department of Agricultural Economics, Texas A&M University, College Station, Texas, January.
  • Richardson, J.W., K. Schumann, and P. Feldman. 2005. Simetar: Simulation for Excel to Analyze Risk. Department of Agricultural Economics, Texas A&M University, College Station, Texas, January.
  • Richardson, J.W. 2005. Base and Yield Analyzer (BYA). Invited paper for Southern Agricultural Economics Association Annual Meeting, Little Rock, Arkansas, February 5-9.
  • Feldman, P.A., J. W. Richardson, K. D. Schumann, and S. Klose. 2005. Coefficient of Variation Stationarity in Probabilistic Forecasting. Contributed Paper at The 25th International Symposium on Forecasting, San Antonio, Texas, June 12-15.


Progress 01/01/04 to 12/31/04

Outputs
The focus on research in 2004 was on analyzing the impact of risk on agbusiness and agriculture. An article that outlines a new method for ranking risky alternatives, Stochastic Efficiency With Respect to Risk (SERF) was published. The methodology was demonstrated in several articles, theses and dissertations. In addition, methodological work was done on developing new methods for simulating random variables from sparse data sets using kernel density estimation techniques. Major efforts were devoted to simulating multivariate non-normal probability distributions using Kopulas. This methodology appears to work and to be easier to use than existing methods. A second area of activity was to examine the equitability of farm program payments across program crops. This study was presented at the National Public Policy Conference and to the Chief Economist for the House Ag Committee.

Impacts
Results of analyses using these new methods were presented at several professional meetings. The new research methodologies are being adopted by other researchers, indicating their worth. The farm bill equity paper is being posted to the www.afpc.tamu.edu website as are other publications for this project.

Publications

  • Duncan, Anthony. 2004. Probability of Economic Success for Netherlands Dairy Farmers Moving Operations to the United States. Department of Agricultural Economics, Texas A&M University, Master of Science.
  • Higgins, Lindsey. 2004. An Assessment of the Equitability of Farm Program Payments. Department of Agricultural Economics, Texas A&M University, Master of Science.
  • Lau, Michael. 2004. Location of an Agribusiness Enterprise with Respect to Economic Viability: A Risk Analysis. Department of Agricultural Economics, Texas A&M University, Ph.D. Dissertation.
  • Outlaw, Joe L., J. Marc Raulston, James W. Richardson, James D. Sartwelle, III, and Brian K. Herbst. 2004. Economic Outlook for Texas Representative Cotton Farms Given the August 2004 FAPRI/AFPC Baseline. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 04-4.
  • Outlaw, Joe L., James W. Richardson, Brian K. Herbst, David P. Anderson, James D. Sartwelle, III, J. Marc Raulston, Paul Feldman, Keith Schumann, Steven L. Klose, Robert B. Schwart, Jr., and Peter Zimmel. 2004. Representative Farms Economic Outlook for the December 2004 FAPRI/AFPC Baseline. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 04-5.
  • Richardson, James W., Joe L. Outlaw, David P. Anderson, J. Marc Raulston, Brian Herbst, James D. Sartwelle, III, Robert B. Schwart, Jr., Keith Schumann, Paul Feldman, and Steven L. Klose. 2004. Representative Farms Economic Outlook for the December 2004 FAPRI/AFPC Baseline. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Paper 04-4.
  • Raulston, J. Marc, Joe L. Outlaw, James W. Richardson, Steven L. Klose, and James D. Sartwelle, III. 2004. Impact of Alternative Property and Sales Tax Policies on Texas Representative Cotton Farms. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Paper 04-5.
  • Gambrell, Stefphanie M. 2004. Predicting the Life Cycle of Rice Varieties in Texas. Department of Agricultural Economics, Texas A&M University, Master of Science.
  • Hardaker, J.B., J.W. Richardson, G. Lien, and K.D. Schumann. 2004. Stochastic Efficiency Analysis With Risk Aversion Bounds: A Simplified Approach. The Australian Journal of Agricultural and Resource Economics, 48:2, pp. 253-270.
  • Richardson, James W., Joe L. Outlaw, David P. Anderson, J. Marc Raulston, Brian Herbst, James D. Sartwelle, III, Robert B. Schwart, Jr., Keith Schumann, Paul Feldman, and Steven L. Klose. 2004. Representative Farms Economic Outlook for the January 2004 FAPRI/AFPC Baseline. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Paper 04-1.
  • Outlaw, Joe L., James W. Richardson, Brian K. Herbst, David P. Anderson, James D. Sartwelle, III, J. Marc Raulston, Paul Feldman, Keith Schumann, Steven L. Klose, Robert B. Schwart, Jr., and Peter Zimmel. 2004. Representative Farms Economic Outlook for the January 2004 FAPRI/AFPC Baseline. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 04-1.
  • Outlaw, Joe L., James W. Richardson, Brian K. Herbst, David P. Anderson, James D. Sartwelle, III, J. Marc Raulston, Paul Feldman, Keith Schumann, Steven L. Klose, Robert B. Schwart, Jr., and Peter Zimmel. 2004. Representative Farms Economic Outlook for the August 2004 FAPRI/AFPC Baseline. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 04-2.
  • Outlaw, Joe L., James W. Richardson, J. Marc Raulston, James D. Sartwelle, III, Brian K. Herbst, Steven L. Klose, and Peter Zimmel. 2004. Economic Outlook for Representative Cotton Farms Given the August 2004 FAPRI/AFPC Baseline. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 04-3.


Progress 01/01/03 to 12/31/03

Outputs
Analyzed the economic impact of the counter cyclical payment (CCP) in the 2002 farm bill on rice farmers in Texas. Because the CCP and Direct Payment (DP) were at the max in 2002/03 many Texas rice farmers were facing the prospect of losing their leases for rice land. The high CCP and DP are earned without planting a crop and actually exceeded expected (uncertain) returns that landowners could get from renting the land to a tenant for producing and marketing a crop. As a result, many landlords opted to idle their land and not grow rice. The Texas rice region has lost an average of 17,000 acres per year for the past 5 years. Five new representative Texas cotton farms were developed to bring the Ag and Food Policy Center's data base up to 10 Texas cotton farms. The new cotton farms were used for a payment limitation study AFPC prepared at the USDA-Chief Economist, Keith Collins, request. Collins chaired the Payment Limitation Commission and asked AFPC to respond to 5 questions as to the economic consequences of alternative payment limitations. An August 2003 Baseline for Texas cotton farms was prepared using a FAPRI Baseline. The study compared the economic outlook for Texas cotton farms in different regions.

Impacts
Improvements in cotton prices significantly reduced the probability of cash flow deficits for Texas cotton farms across the State. Nine of the ten Texas cotton farms are classified in marginal economic viability. Two of the ten are in a severe cash flow situation and can expect greater than a 50 percent chance of cash flow deficits over 2004- 08. Texas rice farmers who lease cropland will be faced with either paying higher cash leases or accepting a smaller percent of the crop to maintain planted acres. Texas rice acres are expected to decline 5,000 to 10,000 acres in 2004 as a result of high DP and CCP's. More restrictive payment limitations and counting marketing loan gains against the loan deficiency payment limitations would affect cotton and rice farmers more adversely than feedgrain, oilseed, and wheat producers. Cotton and rice farms receive higher per acre government payments due largely to the higher value and higher per acre costs of production for these crops.

Publications

  • Richardson, James W., Joe L. Outlaw, J. Marc Raulston, David P. Anderson, James D. Sartwelle, III, Paul Feldman, Keith Schumann, Brian K. Herbst, and Steven L. Klose. "Economic Outlook for Texas Representative Cotton Farms Given the August 2003 FAPRI/AFPC Baseline." Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 03-5, October 2003.
  • Richardson, James W., Joe L. Outlaw, J. Marc Ralston, Brian K. Herbst, and David P. Anderson. "Farm Level Projections of the Impacts of Payment Limitations: Revised." Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Paper 03-2, June 2003.
  • Ribera, L.A., F.M. Hons, and J.W. Richardson. "An Economic Comparison Between Conventional and No-Tillage Farming Systems in Burleson County, Texas." Agronomy Journal. 2004.


Progress 01/01/02 to 12/31/02

Outputs
?The 2002 farm bill included a provision for farmers to update their base acres and farm payment yields. AFPC in collaboration with USDA-FSA, developed a software decision aid (BYA) to help farmers make the update decision. The counter cyclical payments portion of government payments is stochastic so a simulation model was developed to properly analyze the situation. The BYA tool was made available on the AFPC and FSA web sites. Additionally, FSA has made the program available in the county FSA offices.

Impacts
?The BYA decision aid has been run more than 330,000 times on the web site and has been used to analyze more than 125 million acres. Given an increase in government payments of $5 to $10 per acre due to BYA for a $3.7 to $7.5 billion dollar impact on farm income over the life of the farm bill.

Publications

  • Kristinek, Jennifer J. and David P. Anderson. "Exchange Rates and Agriculture: A Literature Review." Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 02-2, February 2002.
  • Richardson, James W., David P. Anderson, and Joe L. Outlaw. "A Brief Summary of U.S. Farm Program Provisions." Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 02-5, August 2002.
  • Richardson, James W., Joe L. Outlaw, and Steven L. Klose. "Base and Yield Update Option Analyzer with CCP Risk." Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 02-6, October 2002.
  • Richardson, James W., Joe L. Outlaw, and Steven L. Klose. "Base and Yield Update Option Analyzer." Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 02-7, October 2002.
  • Gill, II, Robert Chope. "A Stochastic Feasibility Study of Texas Ethanol Production: Analysis of Texas State Legislature Ethanol Subsidy." Department of Agricultural Economics, Texas A&M University, Master of Science, December 2002.
  • Richardson, J.W. "Simulation for Applied Risk Management with An Introduction to the Software Package Simetarc: Simulation for Excel to Analyze Risk." Department of Agricultural Economics, Texas A&M University, College Station, Texas, July 2002.
  • Richardson, James W., Keith Schumann, and Paul Feldman. "Simulation for Excel to Analyze Risk." Department of Agricultural Economics, Texas A&M University, College Station, Texas, July 2002.


Progress 01/01/01 to 12/31/01

Outputs
Research into the economic impacts of alternative options for the 2001/02 farm bill on representative crop farms was of major research concern in 2001. An article outlining the impacts on farmers in the South was prepared and published on this topic. Impacts of the 1996 farm bill on the pattern of crop acreage across the US was the focus of a report prepared under this project. Equity of farm programs across commodities was investigated by examining the fraction of variable costs of production covered by AMTA payment rates and marketing loan rates. Basic research for this project involved development and documentation of a simulation language that runs in Excel. The policy facilitated our development and application of Monte Carlo simulation models for policy analysis. The system has been adopted by researchers in USDA-AMS, Purdue, and U. of Arkansas as well as FAPRI, Columbia, Mo.

Impacts
Shifts in acreage of soybeans and cotton to the Southeast have been exacerbated by the freedom to farm provisions in the 1996 farm bill. Results of the equity analysis showed that soybeans is the most highly subsidized program crop.

Publications

  • Adams, G. and J.W. Richardson. 2001. Exploring Options for a New Farm Bill. Journal of Agricultural and Applied Economics, 33, 2(August):261-270.
  • Anderson, David P., James W. Richardson, and Edward G. Smith. 2001. Post-Freedom to Farm Shifts in Regional Production Patterns. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 01-6, February.
  • Smith, Edward G., James W. Richardson, and Paul Feldman. 2001. Mereta Miles Preliminary Merger Analysis. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Series 01-7, July 6.
  • Smith, Edward G., James W. Richardson, Ronald D. Knutson, Abner W. Womack, David P. Anderson, and Joe L. Outlaw. 2001. Equitability of Government Support Across Major Crop Commodities A Method of Comparison. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 01-7, July.
  • Sartwelle, III, James D., James W. Richardson, and Keith D. Schumann. 2001. Progress Report to the TNRC for Analysis of the Economics of Atrazine Remediation for Representative Grain Farms in the Aquilla Watershed, Hill County Texas: Subtasks 4.0 - 4.4. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Research Report 01-1, September.
  • Sartwelle, III, James D., James W. Richardson, and Keith D. Schumann. 2001. Economics of Atrazine Remediation for Representative Grain Farms in the Aquilla Watershed, Hill County, Texas. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center Research Report 01-2, December.
  • Richardson, J.W. 2001. Simulation for Applied Risk Management with An Introduction to the Software Package Simetar: Simulation for Excel to Analyze Risk. Department of Agricultural Economics, Texas A&M University, College Station, Texas, August.
  • Richardson, James W., Keith Schumann, and Paul Feldman. 2001. Simulation for Excel to Analyze Risk. Department of Agricultural Economics, Texas A&M University, College Station, Texas, August 30.


Progress 01/01/00 to 12/31/00

Outputs
Analysis of technology assessment for new crops in Texas, new varieties and new production practices were undertaken using Monte Carlo simulation procedures. Methodology for new simulation techniques were developed and tested for technology assessment and policy analysis. A procedure for simulating intra- and inter- temporal non-normal probability distributions was developed. The procedure is completely generalizable to handle N random variables over T forecast periods and does not collapse as N or T gets large. Presentations of the procedure were made at a professional meeting and at seminars in three universities. A whole farm revenue insurance (WFRI) product was designed and analyzed in comparison to MPCI. The WFRI product insures farmers income for a farm rather than a single crop. The insured income equals a 5 year olympic average of value of production based on current planted acres, number of cows or number of sows bred. If such a program would have a cut-off or trigger at 80 or 90 percent of average historical value of production, it would exceed the benefits of MPCI at its most popular levels of coverage. The draft report on this project was in review at the end of the year (2000). To complete the study a new method for simulating inter and intra temporal random numbers for non-normal distributions was developed and published.

Impacts
The whole farm safety net research has received interest by Congress as a replacement for traditional price and income supports. Such a change in programs could result in more efficient expenditures by the federal government for supporting farm incomes, saving billions of dollars over the next farm bill cycle.

Publications

  • Richardson, J.W. 2000. Simulation: A Tool for Decision Making Under Risk. Department of Agricultural Economics, Texas A&M University, College Station, Texas (mimeo).
  • Seidenberger, Matthew G. 2000 (May). Applications of Simulation Modeling in Loan Portfolio Analysis for Small, Rural Texas Banks. Department of Agricultural Economics, Texas A&M University, Master of Agribusiness Professional Paper.
  • Anderson, D.P., Wilson, P.N. and Thompson, G.D. 2000. The Adoption and Diffusion of Level Fields and Basins. Journal of Agricultural and Resource Economics. 24(1):186-203.
  • J.L. Outlaw and Anderson, D.P. 2000 (May 1). A Comparison Between Conventional and Conservation Tillage Costs and Returns in Selected Areas of Texas . Texas Agricultural Extension Service.
  • Anderson, D.P, Rister, M.E., Smith, E.G., Lacewell, R.D., and Aguilar, V. 2000 (February 29). The Economic Feasibility of Sugarcane Production and Processing in Southeast Texas. Rice Technical Working Group Meeting. Biloxi, Mississippi.
  • Rister, M.E., Clawson, E.L., Anderson, D.P., Outlaw, J.L., Falconer, L., McClung, A.M., and Stansel, J.W. 2000 (February 29). The Economics of Challenger New Rice Varieties Versus That of Defender Existing Rice Varieties. Rice Technical Working Group Meeting. Biloxi, Mississippi.
  • Outlaw, J.L. and Anderson, D.P. 2000 (February 2). Evaluating Minimum Tillage and Round-Up Ready Cotton Production Programs Across Texas. Southern Agricultural Economics Association meeting in Lexington, Kentucky.
  • Outlaw, J.L., Anderson, D.P., and Harris, B.L. 2000 (June). Farm Level Effects of Water Management Policies: A Case Study of the Edwards Aquifer. Ed. John Robinson. Emerging Environmental Issues in Southern Agriculture Case Studies and Materials for Policy Education. Southern Extension Public Affairs Committee.
  • Anderson, D.P. 2000 (February). The Role of Producer Organizations and Trade Dispute Mitigation. Proceedings of the Fifth Agricultural and Food Policy Systems Information Workshop. Policy Harmonization and Adjustment in the North American Agricultural and Food Industry. Edited by R.M.A. Loyns, R.D. Knutson and K. Meilke, and A. Yunez-Naude.
  • Klose, S.L., Outlaw, J.L., Richardson, J.W. 2000 (March 25). Incorporating Spatial Correlation in Farm Level Risk Analysis." Presented at the SERA-IEG-31 Annual Meeting, Gulf Shores, AL.
  • Richardson, J.W., Klose, S.L., and Gray, A.W. 2000 (August). An Applied Procedure for Estimating and Simulating Multivariate Empirical (MVE) Probability Distributions in Farm-Level Risk Assessment and Policy Analysis. Journal Agricultural and Applied Economics, Vol. 32, No. 2, (299-315).
  • Gempesaw, C.M. II and Richardson, J.W. 2000. The Use of Simulation in Management Decision Making: The Case of Poultry and Aquaculture Production. Edited by G.W. Zobrist and J.V. Leonard. Chapter 7 in Simulation Systems. Amsterdam: Gordon and Breach Science Publishers.


Progress 01/01/99 to 12/31/99

Outputs
A significant part of the research for this project involved development of research methodologies. Simulation techniques were improved to refine incorporation of risk in farm level simulation models. A book on simulation was written based on this research. Research on the impacts of eliminating Organophosphates and Carbomates was completed with numerous publications coming out as research reports. These reports focused on the economic impacts that would likely occur to: apples, carrots, corn, cotton, wheat, rice, sorghum, soybeans, tomatoes, table and raisin grapes, oranges, and peanuts.

Impacts
(N/A)

Publications

  • Musick, Joe. Impacts of the Elimination of Organophosphates and Carbamates on Rice Production. TAES/TAEX/TAMU/Department of Agricultural Economics, Agricultural and Food Policy Center Research Report 99-10, April 1999.
  • Patrick, Carl and Lawrence Falconer. Impacts of the Elimination of Organophosphates and Carbamates From Grain Sorghum Production. TAES/TAEX/TAMU/Department of Agricultural Economics, Agricultural and Food Policy Center Research Report 99-11, April 1999.
  • Wiese, Richard, Glenn A. Helmers, and Saleem Shaik. Impacts of the Elimination of Organophosphates and Carbamates From Soybean Production. TAES/TAEX/TAMU/Department of Agricultural Economics, Agricultural and Food Policy Center Research Report 99-12, April 1999.
  • Gilreath, Phyllis, Scott Smith, and Timothy G. Taylor. Impacts of the Elimination of Organophosphates and Carbamates From Tomato Production. TAES/TAEX/TAMU/Department of Agricultural Economics, Agricultural and Food Policy Center Research Report 99-13, April 1999.
  • Peel, Michael D. and Dwight Aakre. Impacts of the Elimination of Organophosphates and Carbamates on Wheat Production. TAES/TAEX/TAMU/ Department of Agricultural Economics, Agricultural and Food Policy Center Research Report 99-14, April 1999. Taylor, C. Robert and H. Arlen Smith. Aggregate Economic Evaluation of the Elimination of Organophosphate and Carbamate Pesticides. TAES/TAEX/TAMU/Department of Agricultural Economics, Agricultural and Food Policy Center Research Report 99-15, April 1999.
  • Richardson, James W. Simulation: A Tool for Decision Making Under Risk. Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Texas A&M University, Department of Agricultural Economics, Agricultural and Food Policy Center, June 1999.
  • Ferguson, James J. and Gary F. Fairchild. Impacts of the Elimination of Organophosphates and Carbamates on Orange Production. TAES/TAEX/TAMU/Department of Agricultural Economics, Agricultural and Food Policy Center Research Report 99-6, April 1999.
  • Feldman, Paul A. Farm Level Technology Assessment in Sub-Saharan Africa: A Case Study in Mali. Department of Agricultural Economics, Texas A&M University, M.S. Thesis. August 1999.
  • Byram, T.D., J.W. Richardson, and W.J. Lowe. Predicting Seed Yields from Loblolly Pine Seed Orchards: A Simulation Approach Using TimpSim. Southern Journal of Applied Forestry, Vol. 23, No. 2. May 1999. Rister, M.E., E.G. Smith, V.M. Aguilar, D.P. Anderson, and R.D. Lacewell. An Economic Evaluation of Sugarcane Production and Processing in Southeast Texas. TAES/TAEX. Environmental Issues/Sustainability DET 99-01. May 1999.
  • Kristyn L. Stone, Ronald D. Knutson, C. Parr Rosson, III, David P. Anderson. Forces Shaping Canada-US Agricultural Trade. TAES/TAEX/TAMU/Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 99-4. June 1999.
  • Anderson, D.P., P.N. Wilson, and G.D. Thompson. The Adoption and Diffusion of Level Fields and Basins. Journal of Agricultural and Resource Economics. 24(1):186-203, 1999.
  • Williams, Kathleen and Herbert Hinman. Impacts of the Elimination of Organophosphates and Carbamates on Red Delicious Apple Production in Washington. TAES/TAEX/TAMU/Department of Agricultural Economics, Agricultural and Food Policy Center Research Report 99-1, April 1999.
  • Brandenberger, Lynn. Impacts of the Elimination of Organophosphates and Carbamates From Carrot Production. TAES/TAEX/TAMU/Department of Agricultural Economics, Agricultural and Food Policy Center Research Report 99-2, April 1999.
  • Wiese, Richard, Glenn A. Helmers, and Saleem Shaik. Impacts of the Elimination of Organophosphates and Carbamates From Corn Production. TAES/TAES/TAMU/Department of Agricultural Economics, Agricultural and Food Policy Center Research Report 99-3, April 1999.
  • Sansone, Chris and Jackie Smith. Impacts of the Elimination of Organophosphates and Carbamates From Cotton Production. Texas Agricultural Experiment Station, TAES/TAEX/TAMU/Department of Agricultural Economics, Agricultural and Food Policy Center Research Report 99-4, April 1999. Peacock, William L. Impacts of the Elimination of Organophosphates and Carbamates on Table Grape and Raisin Grape Production. TAES/TAEX/TAMU/Department of Agricultural Economics, Agricultural and Food Policy Center Research Report 99-5, April 1999.
  • Rodriquez-Kabana, Rodrigo and C. Robert Taylor. Impacts of the Elimination of Organophosphates and Carbamates From Peanut Production. TAES/TAEX/TAMU/Department of Agricultural Economics, Agricultural and Food Policy Center Research Report 99-8, April 1999. Wiese, Maury V. and Joseph F. Guenthner. Impacts of the Elimination of Organophosphates and Carbamates From Potato Production. TAES/TAEX/TAMU/Department of Agricultural Economics, Agricultural and Food Policy Center Research Report 99-9, April 1999.
  • Knutson, Ronald D., Edward G. Smith. Impacts of Eliminating Organophosphates and Carbamates From Crop Production. TAES/TAEX/TAMU/Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 99-2, April 1999.
  • Knutson, Ronald D., Edward G. Smith. Economic Impacts of the Elimination of Organophosphates and Carbamates on Texas Agriculture. TAES/TAEX/TAMU/Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 99-3, April 1999. Knutson, Ronald D. Economic Impacts of Reduced Pesticide Use in the United States: Measurement of Costs and Benefits. TAES/TAEX/TAMU/Department of Agricultural Economics, Agricultural and Food Policy Center Issues Paper 99-2, August 1999.
  • Laughlin, Charles Tudor. An Application of Agribusiness Strategic Planning Under Risk. Department of Agricultural Economics, Texas A&M University, M.S., August 1999.
  • Outlaw, J.L., D.P. Anderson, B.L. Harris. Farm Level Effects of Water Management Policies: A Case Study of the Edwards Aquifer. Paper Presented at the Southern Agricultural Economics Extension Committee meeting. Clearwater, FL. June 14-16, 1999.
  • Anderson, D.P., D. McCorkle, R.B. Schwart, and D. O'Brien. Using Options to Hedge Farm and Ranch Inputs. Texas Agricultural Extension Service. L-5251, RM2-13.01. February, 1999.
  • Anderson, D.P., D. McCorkle, R.B. Schwart, and D. O'Brien. Using Options to Hedge Farm and Ranch Inputs - Curriculum Guide. Texas Agricultural Extension Service. February, 1999.


Progress 01/01/98 to 12/31/98

Outputs
Farm level risk management was a major emphasis of research this past year. A state-wide drought brought risk management to the forefront. Alternative crop insurance and revenue insurance strategies were analyzed to help Texas Legislators plan for drought relief. These studies were instrumental in the US Congress action to provide relief to farmers facing low prices and low yields. The Secretary of Agriculture and the House Ag Committee requested analyses of our representative farms to help formulate procedures for disbursing disaster relief funds appropriated by the 1998 Appropriation Bill. Additionally, alternative federal tax provisions, such as a flat tax and a value added tax, were analyzed for crop and livestock farms.

Impacts
(N/A)

Publications

  • Sprott, L.R., B.B. Carpenter, B.S. Robert, J.W. Richardson, J.M. McGrann, and D.H. Bade. 1998. 'Characterizing Profitable East Texas Cow/Calf Operations.' Compendium's Food Animal Medicine and Management, 20(August 1998): 170-173.
  • Neto, Jose De Souza, James Richard Conner, Jerry Wayne Stuth, Wayne Travis Hamilton, and James Willis Richardson. 1998. 'Management Strategies and Climate Impact Change on Rangelands.' Pesq. Agropec. Bras., Brasilia, v. 33, n. 9, p. 1533-1541, set.
  • VanTassell, W. and J.W. Richardson. 1998. 'Impact of Federal Grazing Reductions on Wyoming Ranches.' Oregon Agricultural Experiment Station, Oregon State University, Station Bulletin 682, pages 50-56, May.
  • Richardson, J.W., D.P. Anderson, A.W. Gray, and P. Feldman. 1998. 'Representative Farms Economic Outlook: Update to the 1998 FAPRI/AFPC Baseline.' Texas Agricultural Experiment Station, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Paper 98-5, July.
  • Richardson, James W., David P. Anderson, Edward G. Smith, Paul Feldman, Joe L. Outlaw, Steven L. Klose, Ronald D. Knutson, and Robert B. Schwart, Jr. 1998. 'Representative Farms Economic Outlook for the November 1998 FAPRI/AFPC Baseline.' Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Department of Agricultural Economics, Texas A&M University, Agricultural and Food Policy Center Working Paper 98-11, December.
  • Ray, D. E. and J. W. Richardson. 1998. 'Agricultural Sector Impacts of the 1996 Farm Bill on the South.' Invited Paper for the Southern Agricultural Economics Association Annual Meeting. Little Rock, Arkansas, February.
  • Clarke, N.P. editor. 1998. 'Low Energy Precision Application (LEPA).' in Assessing the Impact of Change. Texas A&M University System, Agricultural Program, Impact Assessment Group.
  • Clarke, N.P. editor. 1998. 'Economic Impact of Greenbug Resistant Sorghums.' in Assessing the Impact of Change. Texas A&M University System, Agricultural Program, Impact Assessment Group.
  • Clarke, N.P. editor. 1998. 'New Life for Texas Agriculture: Evaluation of New Plant Germplasm.' in Assessing the Impact of Change. Texas A&M University System, Agricultural Program, Impact Assessment Group.
  • Gray, A.W. 1998. 'Agribusiness Strategic Planning Under Risk.' Department of Agricultural Economics, Texas A&M University, Ph.D. Dissertation, August.


Progress 01/01/97 to 12/31/97

Outputs
Analyses of the 15th sign up rules for the Conservation Reserve Program (CRP) were completed. A lay persons review of the CRP was developed to aid producers in understanding the new program provisions and how the bid process worked. The reports were widely circulated among producers in the Texas. Analysis of vegetables as alternative crops in the selected regions was analyzed as an option for farmers faced with increased planting flexibility under the 1996 farm bill. Proposed changes in the Texas tax structure were analyzed as to their likely impacts on the economic viability of agricultural producers in principal growing regions.

Impacts
(N/A)

Publications

  • JONES, L.L., SMITH, E.G., RICHARDSON, J.W., GRAY, A.W., KLOSE, S.L. 1997. "Evaluation of Texas House Bill 4: Proposed Property Tax Relief and Business Activities Tax." AFPC, Department of Agricultural Economics, TAES, TAEX, and Texas A&M University, Working Paper 97-2, February.
  • SMITH, E.G., RICHARDSON, J.W., ANDERSON, D.P., GRAY, A.W., KLOSE, S.L., MILLER, J.W., OUTLAW, J.L., KNUTSON, R.D., AND SCHWART, R.B. 1997. "Economic Outlook for Representative Crop, Beef, and Hog Farms Under the FAPRI/AFPC January 1997 Baseline." Texas Agricultural Experiment Station, Department of Agricultural Economics, Agricultural and Food Policy Center Briefing Paper 97-1, January.
  • OUTLAW, J.L. AND SMITH, E.G. 1997. "Revised Fruit and Vegetable Double Cropping Regions for Texas." Market-Gram, Marketing and Policy Information for County Extension Agents, Texas Agricultural Extension Service, Vol. 14, No. 1, January 3.
  • OCHOA, R.F., AND OUTLAW, J.L. 1997. "Una Herramienta Para La Evaluacion Financiera De Empresas Agropecuarias: El FLIPSIM." in Los Sistemas Nacionales Lecheros De Mexico, Estados Unidos Y Canada Y Sus Interrelaciones. L. A. Garcia, M. C. Del Valle, and A. Alvarez, eds., Instituto de Invesstigaciones Economicas, Universidad Nacional Autonoma De Mexico Press, Mexico.
  • OUTLAW, J.L. AND SMITH, E.G. 1997. "Acreages Announced for CRP 15th Signup." Market-Gram, Marketing and Policy Information for County Extension Agents, Texas Agricultural Extension Service, Vol. 14, No. 3, April 11.
  • SMITH, E.G., OUTLAW, J.L., SMITH, J.G., AND AMMOSON, S.H. 1997. "Conservation Reserve Program Final Rule Questions and Answers." Market-Gram, Marketing and Policy Information for County Extension Agents, Texas Agricultural Extension Service, Vol. 14, No. 2, February 13.
  • GRAY, A.W., HARMAN, W.L., RICHARDSON, J.W., WIESE, A.F., REGIER, G.C., ZIMMEL, P.T., AND LANSFORD, V.D. 1997. "Economic and Financial Viability of Residue Management: An Application to the Texas High Plains." Journal of Production Agriculture, Vol. 10, No. 1: 175-183.
  • RICHARDSON, J. 1996. Using FLIPSIM to Analyze Risky Decisions. "Risk Management, Forum on Risk Management Education." USDA-CREES, Farm Foundation, USDA-Risk Management Agency, Commodity Futures Trading Commission, Kansas State University - Cooperative Extension Service, and Texas A&M University - Texas Agricultural Extension Service, Kansas City, Missouri, December 16-17.
  • SMITH, E.G., RICHARDSON, J.W., ANDERSON, D.P., GRAY, A.W., KLOSE, S.L., MILLER, J.W., OUTLAW, J.L., KNUTSON, R.D., AND SCHWART, R.B. 1996. "Representative Farms Economic Outlook: FAPRI/AFPC December 1996 Baseline." Texas Agricultural Experiment Station, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 96-8, December.
  • ERNSTES, D., OUTLAW, J.L., AND SCHWART, R.B. 1996. "Dairy Sector Trade Between the United States and Mexico: An Overview." Balanced Dairying Economics, Texas Agricultural Extension Service, Volume 16, No. 2, November 29.
  • VANTASSELL, L.W. AND RICHARDSON, J.W. 1996. "Impact of Federal Grazing Reductions on Wyoming Ranchers." Presented Paper at the 1996 WRCC-55 Meetings, Park City, UT, October 7 and 8.
  • MARBURGER, D. 1997. "The Potential Economic Impacts of Alternative State Taxes on Different Size Texas Farms." Department of Agricultural Economics, Texas A&M University, M.S., December.
  • SMITH, E.G., PENSON, J.B., GRAY, A.W., KLOSE, S.L., RICHARDSON, J.W., KNUTSON, R.D., ANDERSON, D.P., OUTLAW, J.L. 1997. "Interest Rate Effects on the United States Agricultural Sector with Emphasis at the Farm Level." Texas Agricultural Experiment Station, Department of Agricultural Economics, Agricultural and Food Policy Center Working Paper 97-5, May.
  • ERNSTES, D.P., OUTLAW, J.L., AND KNUTSON, R.D. 1997. Southern Representation in Congress and U.S. Agricultural Legislation, Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Department of Agricultural Economics, Texas A&M University, Agricultural and Food Policy Center Issues Paper 97-3, September.
  • KNUTSON, R.D., SMITH, E.G., ANDERSON, C.G., COOK, K.R., OUTLAW, N.A., AND HICKS, D.M. 1997. Texas Agriculture by Congressional District, Texas Agricultural Experiment Station, Texas Agricultural Extension Service, Department of Agricultural Economics, Texas A&M University, Agricultural and Food Policy Center Working Paper 97-10, September.
  • ERNSTES, D.P., OUTLAW, J.L., KNUTSON, R.D. 1997. "A Student Study Guide to Agricultural and Food Policy." Texas Agricultural Experiment Station, Department of Agricultural Economics, Texas A&M University, Agricultural and Food Policy Center, August.
  • KNUTSON, R.D., SMITH, E.G., OUTLAW, J., AND WOODS, W.F. 1996. "New Farm Bill: Watershed Change in Policy." AFPC, Department of Agricultural Economics, TAES, TAEX, and Texas A&M University, Working Paper 96-6, October.


Progress 01/01/96 to 12/30/96

Outputs
- Analyses related to continuation of the CRP for Texas farmers was completed todocument acres affected by the decision and the potential prices at which farmers would place CRP land into production. High grain prices in early 1996 were found to be sufficiently high for producers with low CRP rental rates to profitably drop out of the CRP. - Analyses of the 1996 farm bill for Texas dairy and crop farms showed substantially lower incomes through 2002 than under the 1990 farm bill. Increased price risk and lower net returns are projected to reduce economic viability. - Technology assessment methodology was tested using FLIPSIM and a journal article prepared to show how the model can be used for that purpose. The technology selected for the example was for sleeping sickness in cattle in Kenya. - An article on the impacts of US and Canada free trade on US agriculture was published as well.

Impacts
(N/A)

Publications

  • Nyangito, H.O., J.W. Richardson, D.S. Mundy, A.W. Mukhebi, P. Zimmel, and J. Namken. 1996. "Economic Impacts of East Coast Fever Immunization on Smallholder Farms, Kenya: A Simulation Analysis." Ag. Econ., 13:163-177.
  • Knutson, Ronald. 1996. "Implications of Freer Canadian-U.S. Trade for Wheat, Dairy and Poultry." Journal of Ag. Lending. Vol. 9, Issue 2, p. 12-18.
  • Gray, Allan W., James W. Richardson, and Jackie M. McClaskey. 1995. "Farm Level Impacts of Revenue Assurance." Review of Ag. Econ., 17:171-183.
  • Smith, J.G., J.L. Outlaw, E.G. Smith, T.D. Miller, S.H. Amosson, and S.J. Bevers. 1996. "Texas CRP Database Book." Texas Ag. Extension Service.
  • Knutson, R. D. 1996. "Post-GATT Assessment of the World Marketplace," in Regulation and Protectionism Under GATT: Case Studies in North American Agriculture, Ed. by A. Schmitz, G. Coffin, and K. Rosaasen, Westview Press, (Chap 2), p. 20-36.
  • Knutson, Ronald D., J. B. Penn, and William T. Boehm. 1995. Ag. and Food Policy,Third Edition, Prentice-Hall, Inc., 500 pp.
  • Mathews, Shane R. 1996. "A Multi-Enterprise Financial Model for Investment Analysis, Including a Case Study of an Investment Proposal for Cattle Crest Ranch." Dept of Ag Econ, Texas A&M Univ. M.S.
  • Smith, E., J. Richardson, J. Outlaw, R. Knutson, A. Gray, S. Klose, and J. Miller. 1995. Representative Farms Economic Outlook: FAPRI/AFPC Dec 1995 Baseli.


Progress 01/01/95 to 12/30/95

Outputs
Basic research into the supply response impacts of payment limitations was completed and published in a journal. The research shows how an effective payment limitation could be used to restrict or increase production, i.e., control supply. The supply response function developed from this research is significantly different from the conventional wisdom supply function in the presence of payment limitations. Analysis of the effect of risk on producers' decisions to flex acreage out or to farm program crops under the farm bill provisions was completed. A journal article on this research reported that risk is not sufficiently significant as to cause distortion in producer's crop mix decisions given the small changes associated with NFA and OFA; particularly for grain farmers in Texas and the Midwest.

Impacts
(N/A)

Publications


    Progress 01/01/94 to 12/30/94

    Outputs
    Several studies were completed on the impacts of NAFTA, GATT, and future trade liberalization. Trade liberalization, coupled with per capita income growth, will likely increase demand for most food products in Mexico. With a more diverse, yet less productive dairy industry, Mexico should import substantial quantities of milk and milk products from the United States with NAFTA. The international sector of AG-GEM has been further enhanced enabling the model to take changes international trade flows into consideration during policy analyses. Research was undertaken using the international version of FLIPSIM. Livestock technology assessment in Kenya was undertaken in collaboration with ILRAD. The research showed large gains to research at the farm level for the reduction of the effects of East Coast Fever.

    Impacts
    (N/A)

    Publications


      Progress 01/01/93 to 12/30/93

      Outputs
      Several studies were completed on NAFTA. Trade liberalization, coupled with per capita income growth, will likely increase demand for most food products in Mexico. With a more diverse, yet less productive dairy industry, Mexico should import substantial quantities of milk and milk products from the United States if a NAFTA is implemented. Opportunities also will exist to export replacement heifers, bulls, semen, and milking equipment to Mexico. Research was completed for an international version of FLIPSIM. Documentation of the model was completed. Applications to livestock technology assessment in Kenya were completed in collaboration with ILRAD. The research showed large gains to research at the farm level for the reduction of the effects of East Coast Fever. The international sector of AG-GEM has been enhanced enabling the model to be used for analyzing international trade policies.

      Impacts
      (N/A)

      Publications


        Progress 01/01/92 to 12/30/92

        Outputs
        Data to describe and simulate representative cotton, grain, and dairy farms in Texas were updated and verified with producers. Simulation analysis of the impacts of continuation of the 1990 farm bill on these farms showed that rice and cotton farms will be hardest hit by the coming cost/price squeeze. Moderate size dairy farms have been made much less competitive after complying with environmental regulations related to waste water disposal. The full cost of compliance will force many of these farms out of business of 1998. The crop sector of AG-GEM has been reestimated and equations included to present government costs on a calendar year basis as well as a crop year basis. Econometric work to update the supply response equations for all major crops, dairy, hogs, sheep, cattle, goats, and poultry in AG-GEM has been undertaken. Updating the demand side for livestock is underway but not completed. Analysis of continuing the 1990 farm bill have been completed and indicate continued high government costs due to fixed target prices and low crop prices. The hog price cycle is expected to bottom out in 1993 and the cattle price cycle will bottom out later. Several improvements to the FLIPSIM system have been made. The model has been expanded to include corporate income tax provisions, land valuation is endogenized, and 1990 farm bill provisions have been added.

        Impacts
        (N/A)

        Publications

        • KNUTSON, R.D., SMITH, E.G., CONDRA, M.K., SUMMEROUR II, E.B. and ANDERSON, C.G. 1992. Texas Agriculture By Congressional District: Impacts of Redistricing, Texas Agricultural Experiment Sta., Depart of Agric. Econ., Agric. and Food Plcy.
        • FISHER, D.U., KNUTSON, R.D. and BARRERA, A. 1992. State Rural Development Initiatives, Texas Agric. Exp. Sta., Depart. of Agric. Econ., Agric. and Food Policy Cntr Issue Paper 92-1, April 1992.
        • FISHER, D.U., KNUTSON, R.D. and LADEWIG, H. 1992. Rural Development Policy and Multicommunity Development, TX Agric. Exp. Sta., Depart. of Agic. Econ., Agric. and Food Policy Ctr. Issues Paper 92-2, July 1992.
        • LAMAR, C.H. 1992. "Analyzing the Impacts of Sales Tax on Agricultural Inputs", unpublished M.S. Thesis, Dr. Ronald D. Knutson, Chair, Texas A&M Univ., College Sta., Texas, August, 1992.
        • ROSSON III, C.P. and ANGEL, A. 1992. "Prospects for North American Free Trade: A Discussion of Some Economic and Political Realities". Southern Journ. of Agricultural Economics, July 1992 (Accepted). 9 R.
        • PENA, J.G., ROSSON III, C.P. and ADCOCK, F.J. 1992. "Pecan Imports from Mexico and the Effect of a Free Trade Agreement", Proceedings, 26th Western Pecan Conf., Las Cruses, New Mexico, March 1992. 9 O.


        Progress 01/01/91 to 12/30/91

        Outputs
        Research focused on development and application of policy analysis models. The analyses concentrated on the effect of chemical use reduction and its economic impacts on agriculture. A sector level study in 1990 of chemical use reduction was extended to the farm level using the FLIPSIM model. Results indicated that chemical use reduction would disadvantage Southern crop producers relative to Midwest grain producers. Research on technology assessment was initiated on integrated pest management (IPM) as a technology. IPM was evaluated using whole farm, Monte Carlo simulation along with stochastic dominance and confidence interval estimation. This research demonstrated that the methodology was an appropriate method to evaluate a technology designed to reduce production variance.

        Impacts
        (N/A)

        Publications


          Progress 01/01/90 to 12/30/90

          Outputs
          Research has focused on model development for analysis of alternative policies debated for the 1990 Farm Bill. Model development has moved forward on two fronts, namely sector and firm level. The main sector model advancement has been combining two sector level models (COMGEM and AGSIM) to create AG + GEM. These models have been used to analyse the effect of possible chemical use reduction on the agriculture sector. Currently, analyses are being completed to determine the sector level economic effect of using corn to produce ethanol and the effects of the budget deficit on the agriculture sector. The livestock and crop sections of FLIPSIM have been updated and expanded to handle the diverse situations that have been encountered when collecting farm level information on the national level. The data base of dairy and livestock farms has been vastly expanded in the last year and at present, we have 16 data sets describing dairies and 11 data sets describing various other livestock operations. Over the past year, these data sets and FLIPSIM have been used to provide economic policy analysis for Congress concerning dairy and livestock policy as well as the effect of chemical reduction on the livestock and poultry sector. With the help of the House and Senate Agriculture Committee Staffers, five regions were targeted for the development of representative crop farms by May 1, 1990. With one exception, all were completed. Six additional regions were targeted for development of subsequent farms.

          Impacts
          (N/A)

          Publications

          • SMITH, E.G., KNUTSON, R.D., TAYLOR, C.R. and PENSON, J.B. 1990. "Impacts of Chemical Use Reduction on Crop Yields and Costs, Agricultural and Food Policy Center, Texas A&M University System, Cooperating with Tennessee Valley Authority.
          • VAN TASSEL, L., RICHARDSON, J.W. and CONNER, R. 1990. "Use of Empirical Distribution in Simulation Models: An Extension Using Meteorological Data". Pre.
          • KNUTSON, R.D., PENN, J.B. and BOEHM, W.T. 1990. Agricultural and Food Policy, 2nd Edition, Prentice-Hall, Inc., Englewood Cliffs.
          • MILLER, M.A., RISTER, M.E., LIPPKE, A., PERRY, G.M., COCHRAN, M.A. AND CUNNINGHAM, K. 1990. "Applying Operation Research Methods to Identify Complex Government Farm program Participation Decisions", Computers and Electronics in Agri.
          • PENSON, J.B., JR. and CHEN, D.T. 1990. (forthcoming). "Design and Application of COMGEM for Farm Policy Analysis", Chapter 8 in Value of Large Scale Models for Economic Policy Analysis, American Agricultural Economics Association.
          • SMITH, E.G. 1990. "Alternative Agriculture: Impacts on the Land Grand and Public Policy Agenda". Report Proposed for Dr. Robert Merrifield, Texas Agricultural Experiemtn Station.
          • SMITH, E.G. and BLACK, W. 1990. "Equity Management Investment and Redemption". Director Development Programs, Texas Agricultural Cooperative Council.


          Progress 01/01/89 to 12/30/89

          Outputs
          Research has focused on model development for analysis of alternative policies debated for the 1990 Farm Bill. Model development has moved forward on two fronts, namely sector and firm level. Sector model advancements have been to develop the AG-GEM model by integrating the regionally disaggregated commodity model, AGSIM, with the general equilibrium macroeconomic model COMGEM. The resulting model is capable of analyzing both macroeconomic and agricultural policies as to their impacts on U.S. agriculture and the general economy. Applications of the model will begin in 1990. On the firm level modeling front, the FLIPSIM model was enhanced by adding the capability to analyze beef cattle, dairy herds, stockers and feeder steers, swine, and sheep. Extensions of the model planned for 1990 are to add goats and a corporate income tax structure. Applications with the model involved dairy policy (pricing differentials and support prices), crop policy (flexible base, alternative loan rates and target prices, and conservation compliance), technology adoption (bST and pST). Non-modeling efforts on the project relate to rural development work. Several publications have been developed and a pilot project in the Texas Northern High Plains is at its midway point. Results from this project will be available in 1990.

          Impacts
          (N/A)

          Publications


            Progress 01/01/88 to 12/30/88

            Outputs
            The COMGEM macroeconomic general equilibrium model was expanded to include important international agricultural trade relationships. The model was also used to evaluate the effects of cuts in target prices and an increase in the conservation program at the AAEA-sponsored Large Model Workshop at this year's annual meetings. Farm commodity sector modeling research in 1988 has been concentrated in the development of enhanced policy models and application of models for ongoing policy analysis. Major accomplishments include the re-specification and re-estimation of major crop models of the COMGEN and a participation in the AAEA modeling workshop for policy scenario analysis. Two policy options of a 10% reduction of target price and a 20 million acre expansion of conservation reserve program were analyzed for 7 major crops, 5 livestock commodities, and 20 aggregate agricultural indicators. The FLIPSIM model was expanded to do a better job of evaluating dairy farms. To this end, the model was refined to replace dairy cows on a monthly basis rather than annually, an LP to balance the dairy ration was added, and the data sets for dairy farms across the U.S. were updated. The model was used for numerous policy analyses involving alternative farm programs, tax policies, and technology scenarios. A regional development LP/IO model of a county in West Texas was developed and used to evaluate the impacts of farm policies on rural development.

            Impacts
            (N/A)

            Publications


              Progress 01/01/87 to 12/30/87

              Outputs
              Progress over the past year has been on two fronts, namely: model development and maintenance, and model application. In the area of model development and maintenance a new monthly model of the U.S. cotton industry has been estimated and tested against other forecasting procedures. A county-level linear programming - input/output model was developed to evaluate the impacts of changes in farm and macroeconomic policy variables on the economic viability of rural communities. An expert simulation system has been developed to assist crop producers make better decisions regarding farm program participation and the purchase of federal crop insurance. The COMGEM model was updated using the latest published data for the endogenous and exogenous variables. The FLIPSIM model was updated for the 1986 Tax Reform Act provisions and farm program provisions. In addition, representative crop farms for key production regions of Texas were updated for use in FLIPSIM. In the area of model application, numerous publications were produced detailing the consequences of alternative policy actions. The 1986 Tax Reform Act provides added incentives to large profitable farms vs. small farms. Numerous options for modifying the 1985 farm bill were analyzed; however, a clear recommendation was not made because of the numerous tradeoffs between crop producers' incomes, livestock producers, consumer food costs, and taxpayer costs.

              Impacts
              (N/A)

              Publications


                Progress 01/01/86 to 12/30/86

                Outputs
                Numerous analyses of the 1985 Farm Bill have been completed as well as alternative policies which could be used in the future. In completing these analyses considerable research has been accomplished towards the objectives of this project. A world wide econometric model of the cotton industry has been estimated and used for analyses of farm policy. Supply response equations for domestic cotton production were estimated and reported. The domestic agricultural portion of the COMGEM model was re-estimated. Numerous reports were completed quantifying the effects of alternative farm policies and tax policies on farmers in the U.S. The results indicated little can be done in the way of financial bail-outs and farm policy to improve the survival of highly levered producers. Several macroeconomic analyses were completed which suggest that lowering the federal budget deficit and reducing the rate of money supply growth will increase on farm programs. Further analyses are in progress. Considerable work was done on dairy technology and the competitive position of U.S. dairymen by region. This work is being extended for dairy for '86/'87. Research was initiated to quantify the impacts of alternative macro and farm policies on a rural community in West Texas. The model (LP/IO) has been developed and will be run in '86/'87. No work was undertaken because M. Wohlgenant left.

                Impacts
                (N/A)

                Publications