We investigate the impacts of a short-lived change in Missouri's livestock marketing regulations intended to encourage homogeneous pricing for livestock sold in Missouri. Missouri's Livestock Marketing Law of 1999 changed the legal structure governing livestock purchases, creating requirements for meatpackers to adjust purchasing behavior to prevent discriminatory pricing. The legislation resulted in a decrease in the number of hogs produced and sold in Missouri. The impacts were detrimental to the Missouri livestock sector, leading policymakers to eventually abandon uniform pricing standards.

Uncertainty in price formation hinders European seaweed farmers from attracting investments for scaling. This study analyses the impact of seaweed prices in four major exporting countries (China, South Korea, Chile, Ireland) and the prices of three substitute commodities (guar gum, gelatin, pectin) on the price of seaweed in Europe. Using an autoregressive distributed lag model with algae export prices for the years 2016 to 2023, we identified short-run relationships between European seaweed prices and prices of major seaweed-exporters (spatial price transmission) and substitute commodities (cross-commodity price transmission). Our results reveal positive and negative price transmission effects, varying across countries and time lags. Seaweed prices in almost all European countries are affected by at least one of the major exporters or substitutes. Estimated short-run elasticities indicates partial and heterogeneous price transmission. The statistically significant relationships indicate that the European seaweed market shows evidence of short-run integration with global seaweed markets and, to a lesser extent, with hydrocolloid markets. This suggests that the European industry faces international competition and price effects of substitute commodities. We highlight the need for better data collection of seaweed prices, specifically more detail on species and processing forms, to better understand the price relationships identified.

Important developments in infrastructure and institutions characterized 19th-Century wheat markets in Great Britain. Among these developments was the construction of the national rail system which enabled cheaper and more efficient transport of grain and other bulky cargoes between inland towns and ports. We consider the degree to which wheat markets in twelve British cities were spatially integrated over the nineteenth century by applying conventional threshold models and semi-nonparametric (generalized additive) models of spatial price linkages. Although results concerning market integration are qualitatively similar, the semi-nonparametric models capture important nonlinearities that may be missed by conventional threshold models. Both approaches support a high degree of integration among the spatially distinct markets. We then consider two sub-samples from 1800-1840 and 1870-1913 to capture price transmission before and after the repeal of the Corn Laws, the development of the railway system, the improvement of steam engines for ocean transport, and the introduction of the telegraph system. The nonlinear models suggest faster equilibration in response to large shocks and tighter transaction cost bands in the second period.

We consider the relationship between soil characteristics and crop insurance losses. Note that crop insurance losses are typically considered to be a reliable measure of overall yield risk. Our results indicate that several soil characteristics linked to erosion are related to overall loss ratios in the federal crop insurance program. If premium rates adequately account for the risks associated with soil characteristics, there should be no relationship between loss ratios and soil characteristics. Thus, our results indicate that gains in the accuracy of insurance premium rates may be achievable from a greater focus on soil characteristics. We also consider the relationship of specific hazards with soil characteristics and find that different soil factors have varied relationships with specific causes of loss in the federal crop insurance program.

We examine the convergence of lean hog futures and cash prices, focusing on the thinning of negotiated cash markets. Using daily Livestock Mandatory Reporting data from 2001 to 2024, we confirm significant non-convergence between negotiated and futures prices over the past two decades. Regression results show that as the share of negotiated transactions declines, the absolute basis increases, emphasizing the critical role of negotiated markets in ensuring convergence. These findings highlight concerns about the reliability of negotiated prices as a benchmark for contracts and offer valuable insights for price risk management in the hog industry.

We consider the effect of labor market volatility on employment and wages in the meat processing sector. The period of study includes the COVID-19 pandemic, which resulted in significant labor market shocks in the sector. We examine the relationship between historical volatility of employment and wages and current employment and wages, focusing on the animal slaughtering and processing sector (NAICS 3116). We utilize county-level data to estimate dynamic panel data models of employment and wages. We find that historical volatility in both employment and wages had a significant negative impact on employment in the sector. In the case of wage volatility, we find that wages are higher following periods of significant wage volatility, suggesting that workers demand higher wages under conditions of market volatility. During COVID, smaller meat processors had lower levels of employment, but a small number of large processors had significantly higher levels of employment. In contrast, wages were higher after COVID-19 for almost all counties included in the analysis. In an aggregate sense, COVID tended to largely reduce employment but increase wages in the meat processing sector.

This study examines whether cover crop adoption reduces downside production risk. A crop insurance loss measure is used as the main measure of downside production risk. To achieve the study objective, we utilize a unique county-level panel data set with information on cover crop adoption rate, crop insurance production losses, and weather variables. The data covers the main corn and soybean production regions in the Midwestern United States for the period 2005-2018. We employ linear fixed effects econometric models and a number of robustness checks in the empirical analysis (i.e., implementing different estimation procedures and a variety of empirical specifications). The different estimation methods employed leverage the panel nature of the data to address various specification and endogeneity issues. Our estimation results suggest that counties with higher cover crop adoption tend to have lower crop insurance losses and lower downside production risk. This finding supports the idea that the soil health benefits from cover crop use translate to a reduced likelihood of production losses.

The standard approach of presenting Pearson linear correlation coefficients may misrepresent many important patterns of dependence that characterize economic relationships. I present a number of alternative metrics that may offer important advantages over the Pearson correlation coefficient. An application to crop yields, prices, and indicators reveals patterns of dependence that may be missed when only linear correlation is considered.

We examine spatial integration in US corn markets using a nonlinear generalized additive model that incorporates lagged oil prices and price differentials. Six regional markets are compared to a central market using over 30 years of monthly data. All markets show strong linkages to the central market, with significant nonlinearities in most cases. The results highlight the crucial role of fuel prices in spatial linkages for markets along the Mississippi River. Rising fuel prices inhibit trade, with more pronounced effects downstream. Conversely, oil prices have less impact on markets located closer to the central market and farther from the river.

The U.S.-Canada softwood lumber dispute stands as the most protracted trade conflict between the two countries, with its history dating back to the early 1980s. U.S. lumber producers claim that Canadian lumber imports are unfairly subsidized, thereby, harming the domestic lumber industry. The U.S. has imposed countervailing and antidumping duties on Canadian softwood lumber imports to protect the domestic market. An important aspect of this trade dispute is the substitutability of lumber products between the two countries. Canadian lumber imports are detrimental to the U.S. industry only when the products are substitutes. In such a scenario, the imposition of trade restrictions would have a significant influence on the domestic market. Motivated by this consideration, we investigate dynamic relationships between prices for Spruce-Pine-Fir, a softwood species primarily imported from Canada, and Southern Yellow Pine, one of the most popular softwood species domestically produced in the U.S. We apply threshold models in an evaluation of the degree of substitutability. Our empirical findings indicate that within the + / - 3.4 % price differential band, the two lumber products demonstrate a higher degree of substitutability.

I examine the degree to which markets for cannabis are integrated using semiparametric models of spatial price linkages among US states. US attitudes toward the use of cannabis have evolved and, at the same time, laws restricting its use have been eliminated in many states. Cannabis presents the case of a unique commodity for which any interstate trade is explicitly illegal. A voluminous empirical literature has examined spatial arbitrage, trade, and market integration. Most of these studies utilize linear time series regression models. More recent work has considered increasingly more nonlinear models of market integration. I utilize fully nonlinear semiparametric generalized additive models to evaluate the spatial integration of US cannabis markets. The results confirm important nonlinearities in price relationships. Nonlinear price transmission elasticities are derived from the nonparametric modeling results. The results suggest that California cannabis markets are largely integrated with states across the nation. I find that California, which is a leading cannabis exporter, plays a price leadership role. Production of cannabis in California far exceeds the amount that can be legally grown and sold, and much of this cannabis is exported to other states. Colorado, a second primary cannabis market, generally operates in isolation from cannabis markets in other states. The likely mechanism integrating cannabis markets is the thriving trade in illegal cannabis, which has long preceded recent state-level legislative actions that have legalized cannabis use.

In this paper, we discuss the reasons why agricultural and applied economics and similar departments are often stand-alone academic units. The factors that affect and shape the relationship of agricultural and applied economics faculty and departments with those from general economics departments are discussed. We present case studies of three universities having different relationships with general economics faculty at their respective universities: a merged unit, an unmerged unit, and a never-merged unit. We conclude with rationale for the existence and future trajectory of agricultural economics and related academic units at Land Grant Universities.

We estimate directional anisotropic models of linear correlation for crop yields. We find that directional distances (i.e., the degree to which yield correlation decays depending on direction) tend to differ from one another, with east to west distances being “longer” than north to south distances (i.e., correlation tends to decline slower in the east to west direction), at least for the major crops of corn and soybeans. Results for wheat are somewhat ambiguous. However, in all cases, average yield aggregates made up of east to west linked counties tend to be more accurate than is the case for north to south linkages. Implications for rating and contract design in the US area yield federal crop insurance program are offered.

I present a 'differential' (threshold) Rotterdam demand model. I argue that a standard model, which holds parametric relationships constant across all sizes of shocks to prices and expenditures, may produce misleading elasticity estimates. This arises because consumers may react less or even not at all to small shocks to prices and expenditures. However, when shocks are large enough to exceed any adjustment or transactions costs, consumers may react more strongly, thereby producing more elastic responses. I estimate the demand for meats in the US over the 1980-2019 period. I consider four meat products - beef, pork, chicken, and turkey - and assume that meats are weakly separable from other demand decisions. I confirm that reactions to larger shocks will result in more elastic price and expenditure adjustments. A test of the difference in the regimes delineated by the size of shocks to prices and expenditures is statistically significant.

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Cover cropping has the potential to improve resilience of agriculture to climate-change-induced extreme weather events. However, rigorous quantitative evidence on the resilience effect of cover crops is still lacking. Using a novel data set that combines satellite-based cover crop information and county-level crop insurance data, we examine the impact of planting cover crops on prevented-planting-related losses that are typically caused by heavy rainfall events. The US federal crop insurance program offers "prevented planting" coverage, which pays indemnities if insured growers are unable to plant their crop due to adverse weather. Linear fixed effects models, instrument-based estimation methods, long-difference models, and a number of other robustness checks are utilized in the empirical analysis to achieve the study objective. Our findings suggest that counties with higher cover crop adoption rates tend to have lower levels of crop insurance losses due to prevented planting. The resulting reduction in prevented planting risk also becomes larger with longer term, multiyear cover crop use. These results support the notion that cover crops improve soil conditions such that the likelihood and magnitude of prevented planting losses decrease. We posit that the ability of cover crops to handle excess moisture (i.e., through better water absorption and improved water infiltration in the soil) is the main factor in its ability to reduce prevented planting losses in the US Midwest.

The original specification of the Constant-Elasticity-of-Substitution (CES) production function introduced by Arrow, Chenery, Minhas, and Solow is considered to be a general production specification that nests multiple types of production functions, i.e. Leontief, Cobb-Douglas, and linear. However, even this general specification of production functions is restrictive in several ways. This paper proposes a generalized variant of the CES production function that allows for the inclusion of the minimum required levels of inputs. Not allowing for this potential attribute is, in fact, one shortcoming of the original CES production-function specification, which in turn could result in misleading conclusions about essential levels of inputs. Accordingly, a solution is proposed to overcome the mentioned shortcoming. Input thresholds are incorporated in the CES production specification, and empirical applications are provided for irrigation and nitrogen. To illustrate the proposed approach in this paper, two empirical applications in irrigation and fertilizer response using the famous Hexem-Heady experimental dataset as well as several datasets produced using Monte-Carlo experiments with different data-generating processes are provided. Finally, implications for modelling input thresholds are considered and discussed.

This paper assesses the exchange rate pass-through (ERPT) for forest product prices (i.e., sawnwood, logs) by applying a two-regime Self-Exciting Threshold Autoregressive (SETAR) model. We incorporate autoregressive second-order dynamics in the regime equations. This leads to better forecasts, as integrating more lags helps capture the cumulative effects of the price dynamics. We examine sawnwood and log products traded in the United States, Malaysia (Southeast Asia) and Cameroon (West Africa). Our results illustrate the importance of applying the two-regime SETAR-type models to analyze the non-linear exchange rate pass-through for forest product markets. The impulse response analysis of each price pair supports the changing behavior of price ratios in various regimes. This may be regarded as another justification to apply models accounting for structural changes to investigate the exchange rate pass-through in a non-linear fashion. The aftershock adjustment process is similar, but the amplitude of the impact differs among markets. The results reveal potential arbitrage opportunities in the forestry industry.

Agricultural policies without explicit environmental goals can indirectly affect the natural environment through its effect on farmer input use behavior. For example, the highly-subsidized crop insurance program in the United States (US), while developed to protect farmers against yield and revenue risks, also has the potential to influence fertilizer and land use decisions, which can then impact the extent of excess nitrogen and phosphorus that can run-off and pollute nearby water bodies. This study utilizes county-level panel data from 1989-2015 to directly evaluate the impact of crop insurance participation on nitrogen and phosphorus concentration in waterways. Results from linear panel fixed effects (FE) models suggest that counties with higher crop insurance participation tend to have lower nitrogen concentrations in its water bodies, but the effects are small. In contrast, we do not find a consistent statistically significant crop insurance effect on phosphorus concentrations. Findings based on alternative estimation techniques and other empirical specifications generally support our baseline FE model results. We posit that the modest crop insurance effects may be due to two competing mechanisms — the moral hazard effect of crop insurance (i.e., reducing fertilizer use), being counteracted by the incentive to bring in riskier crops or marginal land to production (i.e., increasing fertilizer use).