bluuebunny/crossref_metadata_2025 huggingface dataset:
Temporal Relationships Among Prices on Commodity Futures Markets: Their Allocative and Stabilizing Roles
Authors: Tomek William G. , Gray Roger W.
Published: July 2006

The role that futures markets play in guiding inventories, through hedging, has been emphasized in economic literature. Historically, futures markets first emerged for the annual crops that could be continuously stored (grain and cotton); hence inventory hedging has been important from the outset. But forward pricing which was not attendant upon inventories has long been practiced, and the more recent emergence of futures markets for non‐inventory commodities dramatizes this fact. We show here that the model of intertemporal price relationships differs for the two cases and provide evidence for selected commodities. The contrasting implications for allocation and stabilization are also drawn.
An Intertemporal Analysis of the Nature of Demand for Food Products
Authors: Harmston Floyd K. , Hino Hiroyuki
Published: July 2006

Changes in “taste” are very important in the demand for food products. Most analyses, however, assume taste to be a constant. By utilizing a natural log polynomial function for the Engel curve and examining the resultant income elasticities of demand, certain refinements of standard classifications of commodities are possible. These can then be used to analyze changes in taste over time. The results indicate that taste is highly variable. Further, changes in taste are significantly different for different kinds of food. Recent unprecedented shifts in family income make it imperative that there be better understanding of the nature of demand.
The Reasons Participants Drop Out of the Food Stamp Program: A Case Study and Its Implications
Authors: Love Harold G.
Published: July 2006

In 1967–69 about one‐fourth of all potentially eligible households participated in the St. Louis food stamp program. The annual turnover rate approximated 100 percent. The bulk of households receiving public assistance payments dropped from the food stamp program because of inability to purchase coupons. Most nonrecipients of public assistance left the program because income lifted them from eligibility. The large majority of low‐income households usually spent more for food than food stamps would have cost, but most households could not meet the program's regular participation requirement. Methods of increasing program participation are presented.
Impact of Food Chain Procurement Policies on the Fluid Milk Processing Industry
Authors: Gruebele James W. , Williams Sheldon W. , Fallert Richard F.
Published: July 2006

The growth of the food chains and the adoption of centralized milk programs, including the use of private‐label brands and their own processing facilities, has improved the bargaining position of food chains relative to fluid milk processors. Food retailer groups and milk processors were surveyed to determine the impact of changes in the retailing industry on the fluid milk processing industry. This article provides substantial groundwork for more detailed analysis of the performance aspects of both the food retailing and fluid milk processing industries that have resulted from the increasing vertical integration on the part of food retailers.
The Allocation and Pricing of Water in a River Basin
Authors: Guise J. W. B. , Flinn J. C.
Published: July 2006

A spatio‐temporal equilibrium model that incorporates intraseasonal demands for irrigation water is developed for the situation with a (constrained) competitive market for water. An application of the quadratic programming model, which utilizes demand and supply estimates relating to an intensive irrigation area in southeastern Australia, is used to derive optimal short‐run allocation and pricing patterns for the resource. Extensions of the model to cover multiple dam river basins and additional water uses seem conceptually straightforward, but the limitations imposed by its deterministic partial equilibrium character should be recognized.
Agricultural Credit in Latin America: A Critical Review of External Funding Policy
Authors: Adams Dale W
Published: July 2006

During the 1960's aid agencies channelled over one billion dollars to agricultural credit systems in Latin America. This plus local funds boosted the real value of rural credit by 12 percent per year. A number of assumptions underlying past credit policy are critically examined. It is argued that currently credit shortage is not the most pressing issue. Rather, emphasis should be placed on realistic pricing of rural credit and mobilizing rural savings for credit use through interest incentives.
A Dynamic Economic Model of Pasture and Range Investments
Authors: Burt Oscar R.
Published: July 2006

The traditional economic replacement problem is extended to accommodate a situation where quasi‐rents of future replacements are influenced by replacement age of the currently held asset. This generalized replacement model is applied to optimal timing of the clearing of brush and scrub timber from pasture and range. Dynamic programming is applied to the problem and the structure of the decision role analyzed. An approximately optimal decision rule is deduced by an analysis of the limiting behavior of the optimal policy. An illustrative example is given for pinyon‐juniper control in southwestern United States.
An Application of Statistical Decision Theory to Cattle Feedlot Marketing
Authors: Bullock J. Bruce , Logan Samuel H.
Published: July 2006

The commercial cattle feeder is continually faced with the decision of whether to market a particular lot of cattle at their current weight or to continue feeding them. Uncertainty about future price changes is an important factor in this decision. The study uses statistical decision theory to combine a priori information about the historical pattern of month‐to‐month price changes with information provided by a price forecasting model to develop monthly feed or sell decision criteria. These criteria specify the minimum predicted price change required to generate positive expected returns from feeding an additional 30 days.
Rates of Return for Farm Real Estate and Common Stock
Authors: Kost William E.
Published: July 2006

There has been considerable discussion in recent years concerning the income position of the agricultural sector of the economy. Investment analysts are generally pessimistic about investing in real estate—especially farm real estate. Since farm real estate and common stock are very similar, their rates of return take on added significance when these two assets are considered as investment alternatives. A model is presented by which comparable rates of return may be calculated. Income, price, and total rates of return are calculated for farm real estate and common stock for the 1950–1963 period. Rates of return on common stock are larger and show greater yearly fluctuation for this period.
Utility Analysis in a Practical Setting
Authors: Officer R. R. , Halter A. N.
Published: July 2006

An empirical study involving derivations of farmers' utility functions and the accuracy of these functions in predicting practical decisions is here reported. Three models of utility estimation which were used are compared as to their predictive accuracy and usefulness under field conditions. The study tests the hypothesis that maximizing expected utility, as a criterion of decision, is superior to maximizing expected monetary value. Utility functions are derived for two points in time in order to test the hypothesis that, if utility functions are to serve as a guide to the decision maker, they must be derived at each point in time at which decisions are made. Implications for decision‐making research and for practical farm decision making are indicated.
Estimates of Potential Effects of New Technology on Agriculture in Punjab, India
Authors: Mann K. S. , Moore C. V. , Johl S. S.
Published: July 2006

New high‐yielding varieties of crops are now available in developing countries. Their potential for improving food and fiber supplies is limited by the availability of inputs such as fertilizer, irrigation, and pesticides. The effects of present, projected, and nonrestrictive supplies of fertilizer are estimated for Punjab State, India. Results indicate that large amounts are needed over and above current plan targets in order to maximize food output and farm incomes. Further, changes in price policy will be necessary to maintain production of crops where no improved‐yield‐potential varieties are available. Uniform allocations of scarce fertilizer supplies within a state will not maximize agricultural production and incomes.
Dynamic Impact Multipliers: A Case Study of White Dry Edible Beans
Authors: Vandenborre Roger J.
Published: July 2006

A dynamic model for the white dry edible bean sector based upon empirical demand and supply relationships is used (1) to evaluate the impact of governmental support programs, (2) to study the impact which changes in the exogenous variables have on the system, and (3) to estimate the effects which support prices established above free market prices have on production. Unique aspects of this study are (1) the treatment of a group of commodities rather than a single commodity, (2) the explicit consideration given to production and demand interrelationships, and (3) the effects of government programs on both controlled and noncontrolled commodities.
Some Implications of the EEC's Agricultural Price Policy
Authors: Epp Donald J.
Published: July 2006

This article indicates elements of the Common Agricultural Policy of the European Economic Community that may result in substantial changes in the future. Regional price indexes are developed for several grain and livestock commodities and projected to 1970 and 1975. By combining these projections with the results of an EEC survey of family farm incomes, this article shows that the projected price changes will favor the farmers with the highest incomes. Also, the operation of the Agricultural Fund causes a transfer of foreign exchange from member countries with agricultural net import balances to member countries with agricultural net export balances. Raising the internal prices of imported and exported commodities in order to establish a common price for the EEC has further increased the foreign exchange transfers.
The Welfare Cost of Alternative Methods of Protecting Raw Wool in the United States
Authors: Dardis Rachel , Dennisson Janet
Published: July 2006

Partial equilibrium analysis was employed to estimate the gain or loss accruing to the United States in adopting alternative methods of protection for raw wool. The cost estimates, which were calculated for 1963, indicated that the economy had gained from the adoption of a partial deficiency payments system in 1954. However, further gains could have been made if the raw wool and compensatory wool products tariffs had been replaced by increased deficiency payments. The cost to the economy of maintaining the present system of protection for raw wool ranged from $13 to $26 million, depending on the particular elasticity of demand used. The results demonstrate the necessity for considering interaction between intermediate and final goods in evaluating alternative methods of protection.
Toward a Concrete Concept of Effective Competition
Authors: Sosnick Stephen H.
Published: July 2006

In presenting a concept of effective competition—that is, of a socially desirable state of affairs in an industry or a market—a writer should be specific about the issues, definite about his own views, explicit about necessary versus sufficient conditions, realistic about whether desirable conditions are attainable, discriminating in judging between a condition and its effects, comprehensive in listing market deficiencies, and stringent in describing his ideal. By this author's standards, a market is effectively competitive if and only if it is free of 25 flaws: unsatisfactory products, underuse or overuse, inefficient exchange, inefficient production, bad externalities, spoliation, exploitation, unfair tactics, wasteful advertising, irrationality, undue profits or losses, inadequate research, predation, pre‐emption, tying arrangements, resale price maintenance, refusals to deal, undesirable discrimination, misallocation of risk, undesirable mergers, undesirable entry, misinformation, inefficient rules of trading, and misregulation.
The Effect of a Marketing Order on Winter Carrot Prices
Authors: Shafer Carl E.
Published: July 2006

Marketing orders are utilized for the express purpose of improving returns to growers. Higher quality requirements and supply or rate‐of‐flow management are the major tools in such an effort. The adoption of the marketing order for South Texas carrots permitted a limited test of the hypothesis that derived demand would increase during the order period. The hypothesis is reasonable because of the relatively low quality image of Texas winter carrots. It appears that demand at the grower level in Texas did increase during the order period whereas demand at the f.o.b. levels in Texas and the major competing production area, California, remained unaffected. In effect, the spread between grower price and f.o.b. price narrowed in Texas. If most of the increase in demand was due to improved quality, total returns to growers probably increased as a result of the culling‐price relation.
Importance of the Farm Sector to the Economy: A Multiplier Approach
Authors: Mirakhor Abbas , Orazem Frank
Published: July 2006

A mathematical model is presented, which uses a multiplier approach to determine the relation of farm income to total income in a community, state, or region. Application of the model to Kansas data for the years 1950 to 1966 showed (a) that, on the average, $1.00 of farm income generated $3.33 of total income, whereas $1.00 of nonfarm income generated only $1.46 of total income, (b) that the farm sector expended 88.4 percent of its income in the nonfarm sector, whereas the nonfarm sector expended only 10 percent of its income in the farm sector, and (c) that there was an increasing interdependence between the farm and nonfarm sectors from 1950 to 1966
An Empirical Study of the Agricultural Labor Market in a Developing Country, Brazil
Authors: Youmans Russell , Schuh G. Edward
Published: July 2006

Underemployed agricultural labor implies a poorly functioning labor market. The allocative efficiency of the labor market in the Brazilian state of Minas Gerais is evaluated by estimating agricultural production functions for five regions within the state, estimating the MVP of labor, and comparing this with the MVP of labor in other regions and other sectors of the economy, and with wage rates in both the farm and the nonfarm sectors. The results indicate that labor adjustments are taking place, but not at a fast enough rate to establish equilibrium. Considerable opportunity was found for reallocating labor within the agricultural sector. Surprisingly, in some of the regions the MVP of agricultural labor was greater than the wage rates in the nonfarm sector. Little or no correlation was found between the degree of industrial‐urban development and the performance of the labor market.
Determinants and Development Implications of Foodgrains Prices in India, 1949–1964
Authors: Mellor John W. , Dar Ashok K.
Published: July 2006

A price index for foodgrains in India for the period 1949–1964 is estimated as a function of a set of real demand and supply variables and the money supply. More than 80 percent of the variation in the foodgrain price index is associated with variation in these independent variables. The upward trend in foodgrains prices is associated prmarily with expansion of the money supply. There is little evidence of government foodgrain price policy having affected the trend of relative agricultural prices. The coefficient on the lagged supply‐demand variable suggests that year‐to‐year changes in farmers' storage stocks are an important determinant of foodgrains prices in any one year. The implications of these findings to the relation between agricultural and industrial growth, monetary and fiscal policy, and agricultural price and buffer‐stock policy are discussed.
Theories Explaining the Persistence of Low Resource Returns in a Growing Farm Economy
Authors: Tweeten Luther G.
Published: July 2006

Low rates of return (defined as earnings below opportunity costs) on farm resources have long been considered a major farm problem and one justification for government commodity programs. This paper first analyzes influences (such as economic growth, inflation, and technology) that generate disequilibrium and low returns. But the major issue analyzed is why farm disequilibrium persists after an extended period of full national employment, a strong national economy, an expansion of the aggregate farm plant, and a slow growth of farm productivity in the 1960's. The fixed resource theory, the increasing returns to size theory, and the imperfect competition theory are examined to explain persistence and permanency of disequilibrium and low returns. The fixed resource theory explains low returns as a labor fixity problem and suggests that the problem is either nonexistent or temporary. The increasing returns to size theory points to an extended duration for the low returns problem as long as the large majority of farms continue to operate on uneconomic size units. Finally, the imperfect competition theory depicts low returns as virtually permanent, given the economic structures of the farm and nonfarm sectors.
An Analysis of Daily Fluctuations in the Hog Economy
Authors: Leuthold Raymond M.
Published: July 2006

A recursive model is developed to identify and evaluate the major factors affecting daily fluctuations in hog prices and quantities supplied. Using two years of data, packer price bids for slaughter hogs are found to depend upon lagged wholesale prices, present and lagged quantities of hogs marketed, and the day of the week. Producer's daily marketing responses depend upon lagged price, day of the week, and season of the year. Elasticity of supply is very high, ranging from 8 to 10. Daily ex post forecasts of price and quantity supplied are made for a one year period and indicate that variations in the regression coefficients from month to month, resulting from updating of the model, provide virtually no improvement of the forecasts over using an initial set of coefficients. The developed model predicts daily price fluctuations more accurately than a naive model tested.
Characteristics and Salaries of Agricultural Economists
Authors: Melichar Emanuel
Published: July 2006

Employment and salary characteristics for agricultural economists as of 1966 differ from those of general economists and other scientists in several respects. Educational institutions employed 58 percent of agricultural economists as against 45 percent of economists generally and 36 percent of all scientists. Only 9 percent were employed by business and industry as compared with a third of all economists and 41 percent of all scientists. The geometric mean basic salary received by agricultural economists was $13,000 as compared with $13,600 for all economists and $12,100 for all scientists. Academic degree attained and length of service have a greater influence on salary variation than age, type of employer, or primary work activity.
Congressional Bargaining in Agriculture: Cotton
Authors: Field Barry C.
Published: July 2006

Bargaining among sectional cotton interests in Congress was particularly intense in 1953–54, when a substantial reduction had to be made in the national allotment and then allocated to the various cotton‐producing states. Due largely to congressional constraints on committees to achieve some mutually satisfactory aggregation of preferences, this event can be treated as a two‐person, mixed‐motive bargaining game between eastern and western cotton interests. Through a series of offers and counteroffers, a final solution was reached such that each 1‐percent acreage reduction in the east was accompanied by a 2‐percent reduction in the west. Furthermore, these final “terms of trade” are the same as were reached in a similar instance of bargaining among cotton interests in 1949, implying some stability in the congressional bargaining process through the course of time.
Allowing for Weather Risk in Assessing Harvest Machinery Capacity
Authors: Donaldson G. F.
Published: July 2006

To take account of the effect of weather on the cereal harvest, a simulation model is outlined in which rates of combine work, harvest weather, and diurnal grain‐moisture content are regarded as probabilistic, with known distributions based on empirical data. On the basis of this data, the interaction of the variables is assessed over a thousand “years” of synthetic harvesting experience, in which the timeliness of the harvesting operation is assessed in terms of increased grain drying costs, and which is repeated to assess various policies which might be adopted by farmers. The results are presented as normative average total cost curves for various harvesting systems, based on the certainty equivalence of the decision under risk.
Linear and Dynamic Programming in Markov Chains*
Authors: Kislev Yoav , Amiad Amotz
Published: July 2006

Some essential elements of the Markov chain theory are reviewed, along with programming of economic models which incorporate Markovian matrices and whose objective function is the maximization of the present value of an infinite stream of income. The linear programming solution to these models is presented and compared to the dynamic programming solution. Several properties of the solution are analyzed and it is shown that the elements of the simplex tableau contain information relevant to the understanding of the programmed system. It is also shown that the model can be extended to cover, among other elements, multiprocess enterprises and the realistic cases of programming in the face of probable deterioration of the productive capacity of the system or its total destruction.
Family‐Operated Farms: Their Compatibility with Technological Advance
Authors: Nikolitch Radoje
Published: July 2006

Concepts and measurements were developed to test the hypothesis of the compatibility of the family farm with the postwar economic and technological changes in the organization of farm production. The results suggest that both static and dynamic economic forces continue to influence the patttern of this organization. Although the present family and larger‐than‐family farms only remotely resemble those in the past, they continue their coexistence in approximately the same proportions. Thus, despite profound changes, farms continue to be mostly family‐operated and family‐owned businesses, and family labor continues to be dominant in farming. However, in some traditional locations in California, Florida and a few other States, farm production comes mostly from larger‐than‐family farms—with hired labor as the dominant labor force.
A Production‐Investment Decision Model of Farm Firm Growth
Authors: Boehlje Michael D. , White T. Kelley
Published: July 2006

This article presents the conceptualization of a farm firm growth model which includes both investment and production decisions. The results obtained in the application of the model to a hypothetical Central Indiana farm under alternative resource availability and optimizing criteria assumptions are reviewed. These applications demonstrate the interaction between investment and production decisions in the growth process and indicate that under realistic conditions optimal firm growth is not scale growth. They also indicate that the growth process and the terminal size are different for different objective functions. Finally, the results illustrate the applicability of such a model for investigating farm firm adjustments in a growth context.
Mergers and Diversified Growth of Large Grain Firms
Authors: Cobia David W. , Farris Paul L.
Published: July 2006

Firm growth by merger has received considerable attention because of its potential effects on industry organization and, in turn, economic performance. Early mergers often increased horizontal concentration, but recent ones appear to have been more associated with vertical and conglomerate integration. This study of 35 large firms in grain processing and merchandising industries showed that growth by merger was relatively larger from 1954 to 1963 than from 1940 to 1954. All but eight of the 35 firms became more highly diversified. Increasing diversification was associated positively with initial firm size and the relative importance of external growth.
Federal Milk Marketing Order Provisions: Effects on Producer Prices and Intermarket Price Relationships
Authors: Ladd George W.
Published: July 2006

Federal milk marketing orders contain formulas that determine prices received by farmers for milk delivered to bottlers. Different orders contain various combinations of provisions. Cross‐section data were used to test the hypothesis that order prices are related to the provisions contained in orders. The hypothesis was accepted. Some 78 percent of the variance in prices is explained by two economic variables: distance of order market from Eau Claire, Wisconsin, and class I utilization ratio. Inclusion of dummy variables to allow for effects of order provisions increased the proportion of explained variance to 94 percent. Covariance analysis found no significant changes between years in the effects of order provisions on prices. Many possible combinations of provisions are not used in any order. Many of these combinations would provide unacceptable prices if they were used.
An Analysis of Farm Household Expenditures on Basic Living Materials in Japan
Authors: Lee Feng‐Yao
Published: July 2006

Using cross‐section data, the demand elasticities for basic living materials were estimated by least‐squares and instrumental variables. Income and own‐ and cross‐price elasticities were derived from time‐series data by ordinary least‐squares and combined technique. It is interesting to compare the estimated parameters using different estimating methods. The order of magnitude of the income elasticities contained few surprises. Most of the price elasticities carried correct signs, but the majority of them were insignificant. Income is much more important than prices in explaining Japanese consumption. Most of the estimates are similar to those obtained by others. Expenditure patterns between the Japanese farm households and the U.S. farm households can be compared.
The Pricing of Binspace—A Contribution to the Theory of Storage
Authors: Paul Allen B.
Published: July 2006

The short‐run supply of grain storage is reexamined. A classical, positively‐sloping function applies over most of the observed range. Because different grains compete for space, all grains were considered together. A novel method of computing price was used. This price of binspace is positively related to off‐farm grain stocks and sales of grain off farms—each deflated by bin capacity. Sales are a major influence, reflecting current handling demands as opposed to pure storage demands. Handling demands seem to act as a storage supply shifter. The position slope suggests existence of convenience yields for uncommitted bins.
Response Surface Analysis and Simulation Models in Policy Choices
Authors: Shechter Mordechai , Heady Earl O.
Published: July 2006

This methodological study uses a simulation model to derive response surfaces in the Feed Grain Program. The model approximates an economic system at both micro and macro levels. It estimates response in terms of treasury costs, net farm income, income of participating farmers, and feed grain stock accumulation. Marginal rates of substitution among these response variables are estimated. For example, with a one‐cent reduction in loan rate, responses were $71.00 reduction in net income per farm; $134.00 reduction in income of participating farmers; decrease in stock accumulation of 33 million bushels; $48 million reduction in government costs.
Partial Production Functions and the Analysis of Farm‐Firm Costs and Efficiency
Authors: Sadan Ezra
Published: July 2006

“Partial production functions” relating output to part of, rather than the entire array of, inputs employed are quite common in the production analysis of the biological subprocess in the farm‐firm. This article attempts to outline the framework within which this approach is reconcilable with the accepted theory of the firm. It also traces the derivation of the various cost functions from a set of partial production functions which, under certain conditions, may replace the single comprehensive one. An empirical example demonstrates the usefulness of this approach in relating cost variations to factor intensities or economics of scale which characterize a subprocess rather than the process of production as a whole.
The Demand for Lauric Oils in the United States
Authors: Nyberg Albert J.
Published: July 2006

Demand for lauric oil (coconut and palm kernel) is derived from demand for final products, principally soap and confectionaries. Under current conditions of relative price and use, demand for lauric oil is highly price inelastic at about −0.2; income elasticity is about 0.6. Coconut and palm kernel oil used in the United States is all imported under a basic duty of three cents per pound. Since lauric oils are no longer used in butter substitutes and offer virtually no competition to domestic vegetable oils or butter and in some uses are complementary, no protection objective is served by the duty.
The Standby Milk Pool—A New Strategic Bargaining Device
Authors: Cook Hugh L.
Published: July 2006

The standby milk pool is a voluntary supply‐management device. Through it the cooperatives in high‐priced markets, with little or no surplus, pay cooperatives in distant areas that have surpluses, to manufacture these supplies into butter‐powder or cheese where they are and to ship them in fluid form only when called for. Thus, recipient cooperatives in surplus areas share in the high‐priced deficit markets. Contributing cooperatives find it economical to: (a) pay for reserves, (b) pay for certainty that these reserves will not move unless called for. Thus they can bargain for premiums above federal order minimums.
Discrimination in the Markets for Farm Capital?
Authors: Tinney Robert , Welch Finis
Published: July 2006

Recent empirical investigations have estimated differential earnings of white and nonwhite labor and education and have interpreted these differences as the combined effects of many forms of economic discrimination. In this paper we use a relatively straightforward model to analyze the implications of discrimination in markets for capital funds. The model is designed to focus upon intermarket flows of goods, in this case white to black, and represents a simple modification of the common excess demand and supply frame of reference. The empirical evidence suggests that earned rates of return do not vary with the race of farm operators as most “theories” of discrimination would suggest. However, there is evidence that rates of return increase with farm size, and since Negroes operate smaller farms it is possible that discrimination has served as an impediment to expansion.
The Relative Share of Labor in United States Agriculture, 1949–1968
Authors: Lianos Theodore P.
Published: July 2006

The sources of change in the relative share of labor in the American agricultural sector are examined within the framework of neoclassical production theory. It is found that the observed decline in labor's relative share is due to the increasing capital‐labor ratio adjusted for changing efficiency of factors and to the elasticity of substitution which is greater than unity. It is also found that the efficiency of capital is increasing faster than that of labor and that technological change in American agriculture has been labor‐saving.
The Value, Cost, and Efficiency of American Food Aid
Authors: Pinstrup‐Andersen Per , Tweeten Luther G.
Published: July 2006

Theoretical frameworks were developed to estimate the value to recipient countries of food aid relative to untied cash aid, the cost to the donor country, and the social gain realized by channeling surplus productive capacity in the agricultural sector into food aid rather than reducing production. On the basis of these frameworks, the value, cost, and social gains associated with U. S. food aid during 1964–1966 were estimated. The value to recipient countries of food was estimated to be 80 percent of its world market value. The present value of repayments, interest payments, and transportation costs payable by food aid recipient countries was found to exceed the actual value of food aid under the prevailing dollar credit programs. Hence, a net transfer of resources from developing countries to the United States was found to occur. The cost to the United States of maintaining food aid programs during 1964–1966 was estimated to be approximately equal to the cost of reducing production by a similar amount, using voluntary land retirement programs. It was found that evaluation and pricing of U. S. food aid on the basis of the prevailing export prices results in a considerable overstatement of the actual value to the recipient countries and causes unduly high repayment obligations.
Stochastic Programming, Utility, and Sequential Decision Problems in Farm Management
Authors: Rae Allan N.
Published: July 2006

This paper presents a further development of discrete stochastic programming, viewed within the context of Bayesian decision theory. Some probability models and information structures (with and without additional information) are discussed, followed by an indication of how the stochastic programming matrix may be set up to reflect the various information structures. Some expected utility theories are then reviewed, and their usefulness in allowing the specification of a wide variety of objective functions for the stochastic programming model is illustrated. Lastly, a method is presented for determining the money value of additional information, additional resources, and the expected cost of uncertainty.
Time Horizon, Objective Function, and Uncertainty in a Multiperiod Model of Firm Growth
Authors: Boussard Jean‐Marc
Published: July 2006

The growing literature pertaining to multiperiod programming models of farm growth raises three problems that are ordinarily solved with makeshift solutions: the duration of time to be included within the planning horizon; the arbitrage between present and future consumption; and the introduction of uncertainty. The connections between these questions are shown. The net worth of the firm at the end of the planning horizon is maximized under the constraint of a linear consumption function. In this case it is possible to use the turnpike theorem and some additional theorems on separability of matrices to derive a simple rule for deciding on the appropriate length of planning horizon. The introduction of uncertainty shortens the practical planning horizon defined according to this rule.
The Impact of Managerial Ability and Capital Structure on Growth of the Farm Firm
Authors: Patrick George F. , Eisgruber Ludwig M.
Published: July 2006

A simulation model of farm firm behavior in a dynamic environment with elements of uncertainty was developed. The decision maker's formulation of expectations regarding future prices and yields, his selection of alternative farm plans, evaluation of the expected outcomes of the plans with respect to four goals, and implementation of the plan offering the highest level of overall satisfaction are explicitly considered. The expectations, goals, and resource position of the firm are adjusted to reflect the outcome of the particular plan implemented, and the process is repeated for the next year. A case was simulated for a period of 20 years under three different levels of managerial ability and 27 different capital market structures. It is concluded that managerial ability and long‐term loan limits are the major factors, among those considered, influencing farm firm growth.
Credit in the Production Organization of the Firm
Authors: Baker C. B.
Published: July 2006

It is argued that the equilibrium conditions traditionally used by economists must be modified to provide criteria for optima useful to the firm. Important modifications are associated with liquidity attributes of the firm organization. Credit, defined as borrowing capacity, constitutes an important source of liquidity. Accordingly, borrowing generates a cost from loss of liquidity as well as from interest charges on loans. Modifications are suggested in the relevant optimizing criteria relating to the firm to account for liquidity losses associated with borrowing. Finally, the modifications are reflected in models and observational techniques suggested to make the conceptual notions operationally useful.
The Long‐Run Efficiency of United States Sugar Policy
Authors: Bates Thomas H.
Published: July 2006

The adequacy of future sugar availabilities for United States consumption requirements since the 1960 embargo on Cuban sugar is a matter of continuing concern. This article gives estimates of the long‐run effects of this embargo on the world and the United States sugar economies as well as of the efficiency of current United States long‐run sugar supply policy. Long‐run supply and demand functions were estimated and a general equilibrium competitive model was constructed. Comparison of the results of this competitive model with projected results of the present United States sugar supply program demonstrates the potential economic inefficiencies of the program.
Quadratic Programming Solution of Competitive Equilibrium for U.S. Agriculture
Authors: Hall Harry H. , Heady Earl O. , Plessner Yakir
Published: July 2006

A quadratic programming model is applied to the solution of a competitive equilibrium for the field‐crops sectors of U.S. agriculture. The analysis is based on nine spatially separated markets, with separate demand functions for six commodities in each. The objective of the programming model is to maximize net profits ( total revenue minus production costs, land rents, and transportation costs) derived from satisfying the endogenously determined demand in the various markets. This objective is subject to the constraints on land availability, demand functions, and the competitive equilibrium condition that product price not exceed marginal cost. The empirical results are consistent in the sense that programmed equilibrium prices are considerably lower than actual prices in the base year, 1965. Even under equilibrium at relatively low prices, surplus land is indicated in the Southeastern and Great Plains states. The results suggest the potential for various policy applications, including the analysis of potential short‐run prices in the presence or absence of “free market” equilibrium.
Transfer Restrictions and Misallocations of Irrigation Water
Authors: Gardner B. Delworth , Fullerton Herbert H.
Published: July 2006

The hypothesis of the study is that allowing intercompany transfers of irrigation water would significantly increase the marginal value product of water. Regression analysis was used to explain a time series of rental prices for an area in Utah where four companies freely exchanged water after a long period during which only intracompany transfers were permitted. Water delivered per irrigated acre and type of transfer policy in use were the statistically significant variables and explained 89 percent of the variance in rental price. Covariance analysis indicated that the greater flexibility in transfer increased the real price of water per acre‐foot by $1.84.
Efficiency of Resource Allocation in Indian Agriculture
Authors: Sahota Gian S.
Published: July 2006

This study presents an analysis of resource allocation in Indian agriculture. Production functions are fitted to pooled data. Average and marginal productivity differences are derived for a number of inputs in the production of different crops, across different regions, and over various farm sizes. The results, on the whole, do not lead to the rejection of the hypothesis that there are comparatively few inefficiencies in resource allocation in Indian agriculture.
Projections of Age Distribution of Farm Operators in the United States Based upon Estimates of the Present Value of Income
Authors: Chennareddy Venkareddy , Johnson Glenn L.
Published: July 2006

The increase in the average age of farm operators in the United States since 1920 is pronounced. Several studies have been made of the age of farm operators and have projected the age distribution of farm operators in 1970. This article is based on the premise that the acquisition cost of labor of the agricultural industry for younger workers and the corresponding salvage value for older workers partially determine movements into and out of farming. Present values of future income streams for hired laborers at 25 and 45 years of age in farming and in four nonfarm occupations are estimated and used in constructing an independent variable in the farm operator supply models. Projection of the age distribution of farm operators in 1970 suggests that increases in the average age of farm operators will continue and that this trend will be more pronounced than anticipated in earlier studies.
On Benefit—Cost Analysis of Investment in Schooling in Rural Farm Areas
Authors: Gisser Micha
Published: July 2006

The effect of additional schooling on economic productivity of human agents working on farms is estimated. The cost of schooling is measured by estimating the direct cost of schooling and income foregone while attending school. A model of the farm labor market is constructed. Schooling appears as a predetermined variable in the supply and demand functions of the model. The empirical results of fitting cross‐sectional data to a reduced equation in which the farm wage rate is a dependent variable are utilized in order to obtain an estimate of the pecuniary benefit of schooling. The benefit—cost ratio of schooling in farm areas is computed to be 2.37. This result suggests that comprehensive rural development in the less‐developed countries should strike a balance between investment in schooling and tangible capital.
An Evaluation of the Disincentive Effect Caused by P. L. 480 Shipments
Authors: Seevers Gary L.
Published: July 2006

Changes in foodgrain prices and domestic output caused by changing the quantity of U. S. Public Law 480 shipments to a hypothetical country show that both prices and output are highly sensitive to elasticities of supply and demand. But for many cases examined, changes in these shipments had relatively insignificant price—output effects and these could have been offset by a modest growth in population. Estimates of parameters for India indicate that a 20‐percent increase in the quantity of foodgrain shipments between 1956–57 and 1961–62, other things being equal, would have decreased foodgrain prices 1.6 percent and domestic foodgrain output 0.4 percent. These disincentives may be outweighed by the effects on consumption, income distribution, and resource allocation, suggesting that, overall, the effects of P. L. 480 shipments are beneficial.
Export Quotas and Allocative Efficiency under Market Instability
Authors: Ricardo Ffrench‐Davis M.
Published: July 2006

In a stable environment the existence of economic distortions leads to the use of taxes and subsidies rather than of quotas. The purpose of this article is to explore whether the existence of market instability can change that conclusion. In the case of fluctuations originating in domestic supply, export quotas will tend to destabilize domestic consumer prices and, whenever demand elasticities are low, will increase fluctuations in farmers' income. On the other hand, the case of instability originating in foreign markets is more favorable for quotas. In a free trade situation, all the external price instability carries over to the internal market. A quota scheme, on the contrary, stops instability at the country's frontiers. It is when markets are unstable, then, and instability is concentrated in external markets, that we find an argument for quotas. However, it has to be shown that quotas reduce price and income fluctuations in a degree that more than compensates for the reduction of export returns resulting from the introduction of quotas.
Monopolistic Cocoa Pricing
Authors: Behrman Jere R.
Published: July 2006

Although attempts to introduce international regulation as a device to benefit cocoa producing countries have failed in the past five years, considerable pressure remains to try again. In this study, estimates are formed of the probable changes in some of the relevant variables if an international monopolistic cocoa pricing agreement were implemented. On the basis of new estimates of cocoa supply and demand relations, effects of the hypothetical institution of discriminatory monopolistic pricing in 1964 are examined. Such an agreement would have resulted in marginal, although possibly important, additions to the leading cocoa producing countries' command over external resources; but stock accumulation or surplus disposal problems might have been troublesome, and long‐run supplies would have increased substantially unless producers were effectively isolated from the world market.
Technological Change and Internal Economies in Railroad Transport: Some Implications for the Great Plains
Authors: Felton John Richard
Published: July 2006

The failure of the railroads in recent decades to maintain either their relative position among the transportation industries or their absolute capital investment does not necessarily presage a continuing withdrawal of resources from the industry. Not only do reported rates of return generally understate the actual rates, but also recent innovations have improved expectations with respect to the future. The unit train, which has both improved service and markedly reduced costs per ton‐mile, is of special relevance to a region heavily dependent upon the exportation of grain to distant markets. Furthermore, owing to the comparatively low traffic density of the railroads traversing the Great Plains, the merger of parallel routes would also appear to promise operating economies to an extent not realizable in other sections of the country.
Market Power and Its Sources in the Food Industry
Authors: Brandow G. E.
Published: July 2006

Market power is defined in terms of a firm's ability to affect directly other participants in the market or such market variables as prices and promotion practices. The article distinguishes between short‐run and long‐run power and between offensive and defensive power. More than a dozen sources of power are identified in the food industry. Some of the things commonly regarded as manifestations of market power are unreliable indicators of it. In particular, higher‐than‐average profits and market power do not necessarily go together.
Gash‐Futures Price Relationships for Live Beef Cattle
Authors: Ehrich R. L.
Published: July 2006

The objectives of this study, all pertaining to pricing efficiency, were: (1) to develop a theory of cash‐futures price relationships for beef cattle; (2) to measure the factors that have affected cash‐futures price relationships during the three years of trade in live‐beef‐cattle futures; and (3) to provide a framework for evaluating the efficiency of futures markets and hedging in the pricing of feeder cattle. Three types of evidence are employed to attain these objectives. First, the principles of cash‐futures price behavior derived from observation of long‐established futures markets serve as points of departure, while consideration is given to certain fundamental differences that arise from contrasting commodity characteristics. Second, empirical results relating to supply and demand for feeder cattle are employed to define expected relationships between futures prices and prices of feeder cattle of various weights. Third, data generated by the beef cattle futures market itself are analyzed, although it is recognized that these data cover only a short time period and are therefore of limited usefulness.