Agroforestry economics uses models to help farmers, educators, researchers, and policy makers, among others, make their decisions. This chapter presents the concepts of economics and explains how they apply to natural resource management decisions and subsequently those related to agroforestry. It discusses many tools used by economists to measure and determine how choices are made at the farm level. To give a flavor of how the tools of economics can be used to analyze agroforestry, the chapter describes and provides examples of using two of the approaches: enterprise or farm budget models and nonmarket valuation models. It provides an overview of policies and incentives to encourage landowners to adopt agroforestry systems. There are several types of farm budgeting, and the chapter discusses three, namely whole-farm, enterprise, and partial budgeting. The use of net present value and other financial indicators to evaluate agroforestry alternatives is also explained.

This chapter focuses on analyzing marketing opportunities, researching and selecting target markets, and developing and implementing marketing strategies and plans in agroforestry practices. It also presents examples that demonstrate the application of competitive market analysis and strategy development to agroforestry product markets. To analyze marketing opportunities, a farm business must understand the environment in which it operates to continually identify new opportunities and threats, understand and monitor its competition, and understand consumers and their buying behavior. Several methods are commonly used to analyze marketing opportunities and create successful marketing strategies and marketing plans. Strengths, weaknesses, opportunities, threats (SWOT) analysis is recommended for formulating marketing strategies. SWOT analysis includes an examination of both internal factors (strengths and weaknesses) and external factors (opportunities and threats). A comprehensive marketing plan provides valuable information pertaining to a product's potential in the marketplace.

In the United States, agricultural production using row-crop farming has reduced crop diversity. Repeated growing of the same crop in a field reduces soil productivity and increases pests, disease infestations, and weed growth. These negative effects can be mitigated by rotating cash crops with cover crops. Cover crops can improve soil’s physical, chemical, and biological properties, provide ground cover, and sequester soil carbon. This study examines the economic profitability for a four-year wheat–corn–soybean study with cover crops by conducting a field experiment involving a control (without cover crops) at the Soil Health Farm in Chariton County, MO, USA. Our findings suggested that economic profitability of the cash crop is negatively affected by the cover crop during the first two years but were positive in the fourth year. The rotation with cover crops obtained the same profit as in the control group if revenue from the cash crop increased by 35% or the cost of the cover crop decreased by 26% in the first year, depending on the cost of seeding the cover crop and terminating it. This study provides insights for policymakers on ways to improve the economic efficiency of cost-share conservation programs.

Benefits of repeated air-root-pruning of seedlings when stepping up to progressively larger containers include excellent lateral root distribution immediately below the root collar and an exceptionally fibrous root ball. To evaluate long-term field performance of repeatedly air-root-pruned container stock, three plantings of swamp white oak (Quercus bicolor Willd.) 10 to 13 years old were located that also included bareroot planting stock. Initial and final stem diameter and height and above-ground green weights were determined on randomly selected trees at each site. On a site with a sandy, excessively drained, high pH soil, trees (age 10) from container stock were 1.5 times taller, 2.3 times larger in dbh, and 2.8 times greater in green weight than trees from bareroot stock which averaged only 2.9 m tall, 3.9 cm dbh, and 16.3 kg green weight. On a site with high clay, poor internal drainage, and frequent flooding, trees (age 12) from container stock were 1.4 times taller, 1.8 times larger in dbh, and 4.1 times greater in green weight than trees from bareroot stock which averaged 4 m tall, 7.3 cm dbh, and 28 kg green weight. On an upland site with deep loess soils, there was a trend for trees (age 13) from container stock to be only slightly larger than trees from bareroot stock with each stock type averaging 9.6 m tall, 20 cm dbh, and 177 kg green weight. Repeated air-root pruning produced lateral roots immediately below the root collar that resulted in large container stock with large well-balanced root systems that were competitive on harsh or less than ideal oak sites. Although the process is relatively labor intensive, propagation of repeatedly air-root-pruned container stock is readily adaptable internationally to locally available sources of organic matter and open-bottom containers.

drained, sunny sites, and is often found along roadside ditches and streams. Elderberry is a beautiful plant, with showy flat cymes of white flowers in June followed by bright purple to black berries in late summer (Figures 2 and 3). Ornamental forms are important landscape plants, and elderberry has been grown for generations as a backyard fruit. Based on identified market size and demand, opportunities exist to increase both the production and processing of elderberry across the value chain. At present, usage of both fruit and flowers for wine, juice, jelly, colorant, and dietary supplement products is on the rise. European elderberry (Sambucus nigra) is grown as a commercial fruit crop in Europe and elsewhere. The American elderberry, however, appears to be a better candidate for commercial production in Missouri. This guide outlines production practices and market information for American elderberry, based on research and growers’ experiences in Missouri. T

In this study, we report the results of a comparison of 5-year survival and 14-year growth of black, white, and swamp white oaks grown from planting stock produced by a conventional bareroot method and stock produced by the Root Production Method (RPM (R)) of Forrest Keeling Nursery. Five-year survival was 100% for black and white oak grown from RPM (R) stock, but only 63 and 75%, respectively, for trees grown from bareroot stock. The odds ratio for survival of RPM (R) planting stock of black and white oaks compared to bareroot stock were 21.9 and 12.1, respectively. All swamp white oak survived. After 14 years, diameter growth was greater for the RPM (R) than bareroot planting stock and ranged from a 35% increase in black oak to a 6% increase in swamp white oak. Average aboveground fresh weight for trees from RPM (R) planting stock equaled 530 lb compared to 333 lb for trees from bareroot seedlings (P < 0.0001). Compared with traditional bareroot seedlings, survival and growth of RPM (R) oak planting stock was greater through 14 years.

The time required to harvest and field sort chinese chestnuts ( Castanea mollissima ) with two types of paddock vacuums and with a manual nut-harvesting tool was compared. Pickup time for harvesting chinese chestnuts was faster with a small paddock vacuum (Paddock Vac) than with a manual nut-harvesting tool (Nut Wizard), but field sorting plant material and soil, as well as movement of the small vacuum, was time-consuming. With minor equipment modifications to facilitate sorting, harvest time for a larger paddock vacuum (Maxi Vac) was 2 seconds faster per nut than that for the manual nut-harvesting tool. Economic analyses revealed that the larger modified vacuum also reduced labor costs by $237 when the wage rate was low ($8 per hour) and with total production at 1000 kg. However, with the lower equipment cost, the manual nut-harvesting tool was more economical to use than the modified paddock vacuum, with $8 per hour labor costs and <6370 kg of harvested chestnuts. As labor costs and nut production increased, it was more economically efficient to use the modified paddock vacuum as compared with a manual nut-harvesting tool. At $10, $12, and $15 per hour labor, the modified pasture vacuum was the lowest cost method of harvesting chestnuts at yields >4555, 3466, and 2510 kg, respectively. Thus, the modified pasture vacuum may provide a relatively inexpensive method for new, small producers to mechanize chestnut harvest.

Global carbon trading may present a unique opportunity to change the rural landscape by allowing landowners to make an environmental impact with financial incentives. By enticing point source polluters to trade to an optimal level of pollution by offsetting their emissions with compatible carbon reduction projects, markets are able to facilitate a cleaner environment. Agroforestry provides a set of practices that can sequester carbon with managed tree and crop plantings. However, the initial lack of financial resources has been an obstacle to its adoption in the United States. This paper explores the potential for carbon offset trading to provide an added incentive to adopt agroforestry practices. Chicago Climate Exchange carbon sequestration projects are used as a baseline assessment, and the requirements that Missouri landowners would need to do in terms of contracting and ownership are identified. Data from landowners in central Missouri and the Ozarks (353 individuals) are used to determine characteristics of potentially interested landowners in agroforestry. A model to evaluate agroforestry profitability scenarios is used to compare the added carbon credit trading revenue to traditional alternate uses for the property. The findings from this analysis indicate that in the current context carbon trading does not provide an added incentive value for Missouri landowners to adopt either silvopasture or alley cropping practices because of the low magnitude of annual return.

By Patrick L. Byers, Andrew L. Thomas, Mihaela M. Cernusca, Larry D. Godsey and Michael A. Gold (University of Missouri)

Elderberry, a perennial shrub native to North America with a variety of uses and benefits, is neither well known nor widely utilized as a specialty crop in the US. Up-to-date information is lacking with regard to the elderberry market or market potential. This research identifies the market participants along the value chain, the current status of the industry, direction, future trends, and elderberry market limitations as well as risks and potential opportunities for elderberry producers and processors. A combination of quantitative (mail survey) and qualitative (phone interview) methods have been used. The theoretical model used for the survey and interview development and analysis is based on the Porter Five Forces Model (PFFM) which describes the competitive forces that coordinate and control the market. The PFFM has been used previously to shed light on the chestnut and shiitake mushroom specialty crop markets. Seventy-four mail survey responses and 20 follow-up phone interviews provided information on the market participants, challenges, opportunities and competitive forces in the elderberry industry. Results show a nascent industry with mostly small scale participants poised for growth. Demand trends are favorable and prices are good across the value chain. Challenges include a limited domestic supply of fruit, few regionally adapted varieties suitable for commercial production, and high labor costs. Additionally, the absence of existing mechanical harvesting equipment limits future production potential and industry growth. Respondents identified low levels of competition within the industry at the present time. Based on identified market size and demand, opportunities exist to increase the domestic elderberry industry across the value chain.

Shiitake mushrooms (Lentinus edodes) have many nutritional and medicinal benefits. The cultivation of log-grown shiitake mushrooms encourages forest farming and can be an opportunity for farmers interested in developing an additional enterprise. In 2006, the University of Missouri Center for Agroforestry conducted a nationwide survey of shiitake mushroom producers to analyze the U.S. shiitake mushroom industry by taking into consideration the forces that influence competition based on Porter's five forces model. Shiitake mushrooms are grown primarily as a side business, especially those produced exclusively outdoors. Indoor production on sawdust generates higher income than outdoor production on logs, but log production is more suitable for a small-scale operation in an agroforestry setting. Barriers to entry are created by relationships in. the market, economies of scale, and the learning curve effect. Although there are a limited number of spawn suppliers in the market, they produce quality inoculum and maintain good relationships with shiitake mushroom producers. The majority of respondents sell their shiitake mushrooms locally. Gourmet restaurants, farmers markets, and on-farm outlets are the main markets for shiitake mushrooms. Trends in demand are increasing and prices are high. Shiitake mushrooms can be replaced with other common or gourmet mushroom types, but also have their own identity for numerous nutritional and medicinal properties. Competition for log-grown shiitake mushrooms arises from shiitake mushrooms produced on sawdust and from imports. To successfully survive in the market, firms create competitive advantages through quality, customer service, and consistent supply. Barriers to success in the shiitake mushroom business include demanding work requirements, the need for a serious commitment to produce and market shiitake mushrooms, a 1-year time lag between investment and a return on investment, and insufficient production and marketing information. Grower associations, universities, and state and federal agencies must join their efforts to fund and support shiitake mushroom research and industry development.

Results are presented from a longitudinal study conducted during the Missouri Chestnut Roast Festival in 2003, 2004, and 2006 assessing participants' familiarity with and essential knowledge about chestnuts. Familiarity with chestnuts increased over time. Compared to first-time visitors, repeat visitors revealed an increase in frequency of consumption, familiarity with roasting chestnuts, and an increase in knowledge. The likelihood people would buy chestnuts more often and eat them roasted or in recipes also increased. Results demonstrate the positive impact of the event on participants' knowledge of, familiarity with, and interest in chestnuts. Thus, Extension professionals can use community festivals as an effective educational tool.

The University of Missouri Center for Agroforestry (UMCA) is conducting research to identify and describe the chestnut (Castanea spp.) product market value chain. Through detailed market research and by organizing events that increase consumer awareness towards chestnuts, UMCA's goal is to broaden market opportunities for all individuals and businesses in the chestnut market. In 2004, UMCA conducted a nationwide survey of individuals and businesses active in the U.S. chestnut market. Results confirm that the US chestnut industry is in its infancy. The majority of chestnut producers have been in business less than ten years and are just beginning to produce commercially. Volume of production is low (less than 1.5 million pounds). US chestnut producers are mainly part timers or hobbyists. Production operations are small and the crop harvested manually. The majority of respondents sell only fresh chestnuts and a few sell value added products. Barriers to success in the chestnut business are the lack of information for producers, retailers and consumers, five to ten year time lag to get a return on investment, and shortage of available chestnut cultivars for commercial production. There are also problems related to pest and disease control and the market is uncertain. Specific policies such as subsidizing cheap imports, existent quarantines for cultivars from other countries and lack of chemicals registered for use with chestnuts can also be considered barriers to success. Chestnut growers associations, universities, state, and federal agencies must join their efforts to fund and support chestnut research and development of the industry.

In both managed plantations and managed forests, thinnings are often required to maintain or enhance productivity. In managed plantations especially, resulting stump sprouts may be deemed undesirable for aesthetic reasons, as well as inhibiting other management activities, such as harvesting nuts and mowing. Herbicide applications can be an effective method for eliminating sprouts that may develop following tree thinning operations. This study was established during the thinning of an eastern black walnut (Juglans nigra L.) plantation, with stumps treated immediately following tree felling. Four treatments, including three herbicides (Garlon 3A®, Banvel® and Roundup®) and a control (no stump treatment) were applied in a randomized complete block design to 36 stumps. Treatments were applied during April of 2001. For 2 years following stump treatment, sprouts were counted. Stumps treated with Garlon 3A® provided the best results with no sprouting over the 2-year study period.

Edible chestnuts are an ancient tree crop undergoing a global renaissance. Scattered efforts are under way throughout the U.S. to develop domestic chestnut production based on chestnut cultivars from Europe or Asia. Concurrently, it is necessary to redevelop the domestic market by reintroducing the chestnut as a food crop to a new generation of U.S. consumers. A study was conducted to gauge the familiarity of participants with chinese chestnuts (Castanea mollissima), eastern black walnuts (Juglans nigra), and northern pecans (Carya illinoensis) to determine their interest in buying, consuming, and preparing these nuts and the key attributes that influence purchase decisions. The study also determined participants' interest in obtaining more information about the production, marketing, cooking, preparation, and nutritional information of nuts. Results of the study show that consumers were not familiar with chestnuts. Most had never tasted a chestnut, but did have interest in exploring them as a new food. Quality and nutrition-diethealth were consistently listed as the most important attributes influencing purchase and consumption decisions for chestnuts and black walnuts but for pecans, locally grown was the most important attribute.

Eastern black walnut (Juglans nigra L.) is often planted at spacings that require pre-commercial thinning. These thinnings are deemed pre-commercial due to the small diameter of the trees and the low ratio of dark wood to light wood (i.e. heartwood to sapwood). As a consequence of size and wood quality, these thinnings are often an expense rather than a source of revenue. In an effort to increase the value of these thinnings it would be beneficial to increase the ratio of dark wood to light wood. One way to increase the amount of dark wood is through costly processing using steam. However, several non-scientific studies have reported that dark wood can be increased by girdling small trees and allowing them to remain on the stump for a limited period of time. This study was designed to explore this idea. In a black walnut plantation scheduled for thinning, ten trees were randomly selected and double- girdled. At that time, increment cores were taken 30.5 cm above the top girdle. These trees were allowed to remain on the stump for 22 months before they were harvested. Following their harvest the trees were sawn in half to reveal both the dark and light wood over the length of the log. This study found that in seven of the nine logs sampled there was a slight increase in the proportion of dark wood to total wood. However, a t-test failed to identify any differences from samples taken prior to girdling. Further, it was visually evident that none of the seven logs with increases showed a consistent change throughout the length of the log, and therefore it is not likely that girdling will improve the marketability of the log or the market value of the tree. The conclusions of this study suggest that consistency in methods of sampling are required to make valid comparisons related to any movement of wood coloration within a log.