Arne Hallam

Comparative economic analysis of perennial, annual, and intercrops for biomass production ☆

Herbaceous crops may be an important source of renewable energy. Production costs can be more competitive by increasing yields so that overhead costs are applied to more biomass. Most previous economic studies of energy crops have concentrated on the production of switchgrass (Panicum virgatum L.). This study analyzes the biomass yield and economic potential of several high-yielding annual and perennial crops on prime and marginal, sloping land. Crops evaluated were reed canarygrass (Phalaris arundinacea L.) harvested twice per year; switchgrass and big bluestem (Andropogon gerardii Vitman var. gerardii); alfalfa (Medicago sativa L.); and sweet sorghum, forage sorghum [both Sorghum bicolor (L.) Moench], and maize (Zea mays L.). The intercropping of the two sorghum species into reed canarygrass and alfalfa was also analyzed. All crops but alfalfa were fertilized with 0, 70, 140, or , with economic analysis performed assuming . Sorghums were most productive, with more than of dry matter ha−1. Switchgrass was the highest-yielding perennial crop. Costs per ton of biomass produced were lowest for sorghum, somewhat higher for switchgrass, higher still for big bluestem, and highest for alfalfa and reed canarygrass. Yields per ton for intercropped species were higher than for perennial species but lower than for monocrop sorghum. Costs per ton for intercropped species were less than for either alfalfa or reed canarygrass, but were higher than costs per ton of monocrop sorghum. Although the sorghums had the highest yields, high potential for erosion on sloping soils may preclude their use on these soils.

Hedging Production Risk With Options

The expected utility maximization problem is solved for producers with both price and production uncertainty who have access to both futures and options markets. Introduction of production uncertainty alters the optimal futures and options position and almost always makes it optimal for the producer to purchase put options and to underhedge on the futures market. Simulation results lend support to the practice of hedging the minimum expected yield on the futures market and hedging remaining expected production against downside price risk using put options. The results are strengthened if the producer expects local production to influence national prices and if risk aversion is higher at low income levels.

A Confusion of Agricultural Economists?—A Professional Interest Survey and Essay

A random survey of members of the American Agricultural Economic Association is used to examine basic philosophical issues regarding the discipline of agricultural economics. In comparison to other studies of economists, much more diversity of response is found among agricultural economists. The data suggests important correlates between the pattern of responses and socioeconomic variables. Some variables which affect responses are: agricultural interests, age, school of graduation, area of specialization, and employment. Self-interest, information differences, and empathy are among the possible explanations of the patterns of responses.

Technology adoption under price uncertainty

Abstract The paper examines the impact of changes in the variance of output prices on the bias and intrafirm diffusion rate of technological change. The results indicate that a reduction in the variance of output prices will increase the rate of adoption and the intrafirm diffusion speed of yield-increasing technologies. The opposite is true for cost-reducing technologies.

Separability Testing in Production Economics

The implications of separability in production are examined using duality. Restrictions on the profit function implied by separability of the production function, and vice versa, are derived in a simple way. These restrictions are then calculated for commonly used classes of functional forms. Then the method is used to test separability of the profit function using experimental production data. The hypothesis that the profit function was separable (plant nutrients from spacing unit costs) could not be rejected. This implies that an aggregate price index for nutrients is appropriate.

Wind generation scheduling with pump storage unit by Collocation method

Wind generation is currently undergoing the fastest rate of growth of any form of electricity generation in the world. Integration of wind power into systems could be problematic, however, due to availability and variability of wind supply. As a proven storage technology, pump storage may provide/absorb additional capacity so as to hedge against adverse situations. A scheduling software is needed to coordinate wind generation and pump storage units, given existing price and wind forecasting modules. This paper first implements a “Collocation Method” to solve a dispatching problem of wind and pump storage units, given the forecasting of future price and wind generation. Second, given that a pumping decision is discrete while generation dispatching is continuous, this paper uses a two-step strategy to solve a mixed-integer problem. Transition constraints are modeled based on the property of collocation method. Third, this paper uses real wind generation and real-time energy price data to simulate scheduling activities by the proposed model. A comparison of expected profits between wind only and wind plus pump storage unit is given.

Farm-scale costs and returns for second generation bioenergy cropping systems in the US Corn Belt

While grain crops are meeting much of the initial need for biofuels in the US, cellulosic or second generation (2G) materials are mandated to provide a growing portion of biofuel feedstocks. We sought to inform development of a 2G crop portfolio by assessing the profitability of novel cropping systems that potentially mitigate the negative effects of grain-based biofuel crops on food supply and environmental quality. We analyzed farm-gate costs and returns of five systems from an ongoing experiment in central Iowa, USA. The continuous corn cropping system was most profitable under current market conditions, followed by a corn‐soybean rotation that incorporated triticale as a 2G cover crop every third year, and a corn‐switchgrass system. A novel triticale‐hybrid aspen intercropping system had the highest yields over the long term, but could only surpass the profitability of the continuous corn system when biomass prices exceeded foreseeable market values. A triticale/sorghum double cropping system was deemed unviable. We perceive three ways 2G crops could become more cost competitive with grain crops: by (1) boosting yields through substantially greater investment in research and development, (2) increasing demand through substantially greater and sustained investment in new markets, and (3) developing new schemes to compensate farmers for environmental benefits associated with 2G crops.

Testing separability of production using flexible functional form profit functions

Abstract We show that the dual implications of separability depend crucially on whether profit is transformed non-linearly in modern flexible form production systems. In any case where profit is non-linearly transformed (as in the translog), homothetic separability is maintained.

Dynamic modelling of agroforestry and soil fertility interactions: implications for multi-disciplinary research policy

This paper attempts to contribute to one of the major aspects of international research agenda in agroforestry. A general framework is developed in this paper to capture the dynamic interactions of various components of agroforestry system. Using a multi-seasonal model of agroforestry, the competition among the system components in resource and input use and the trade-offs between different outputs of agroforestry system are analyzed. Policy implications for multi-disciplinary research are derived. It is argued that quantifying the potential benefits of agroforestry system requires reformulation of existing economic methods of analyzing agroforestry technology to contribute to the fuller understanding of the dynamic interactions among its various components.

Sustainable and Market-Based Analyses of Cooking Technologies in Developing Countries

Over two billion persons worldwide use biomass as their primary form of energy in household cooking. This creates significant adverse consequences to families in developing nations that use stoves made without technical advancements commonly used in the industrialized world. The often simple, ad-hoc stoves lead to harmful side effects including disease, pollution, injury, and deforestation. Further negative consequences arise in household economics when considering losses in labor, time spent gathering fuel, and high fuel costs relative to income. Because of this much research over the past 10-20 years has been conducted with developing better household cooking methods. Findings from these efforts produced more effective stoves to accommodate the needs of impoverished families. Many of these projects began with philanthropic interests and grants to aid the worlds poor. However outside of lump-sum funds for materials and labor there is often be little available to sustain the technical or human resources needed for continued stove utilization. One method to approach sustainability involves a market-based approach to better insure continuation of the benefits of improved cookstoves. This paper provides an assessment of the benefits of advanced cooking devices to both consumers and producers. Further investigations demonstrate consumer and producer impediments in collaborating for mutual benefit. Through realization of the interests and constraints facing both sides, plausible processes can be drawn for holistic improvement of communities in relation to household cooking. This paper also provides various options for intervention and start-up as potential methods in creating sustainable markets for safe, cost-effective, and efficient stoves.Copyright