Corinne E. Alexander

Global warming presents new challenges for maize pest management

It has been conjectured that global warming will increase the prevalence of insect pests in many agro-ecosystems. In this paper, we quantitatively assess four of the key pests of maize, one of the most important systems in North American grain production. Using empirically generated estimates of pest overwintering thresholds and degree-day requirements, along with climate change projections from a high-resolution climate model, we project potential future ranges for each of these pests in the United States. Our analysis suggests the possibility of increased winter survival and greater degree-day accumulations for each of the pests surveyed. We find that relaxed cold limitation could expand the range of all four pest taxa, including a substantial range expansion in the case of corn earworm (H. zea), a migratory, cold-intolerant pest. Because the corn earworm is a cosmopolitan pest that has shown resistance to insecticides, our results suggest that this expansion could also threaten other crops, including those in high-value areas of the western United States. Because managing significant additional pressure from this suite of established pests would require additional pest management inputs, the projected decreases in cold limitation and increases in heat accumulation have the potential to significantly alter the pest management landscape for North American maize production. Further, these range expansions could have substantial economic impacts through increased seed and insecticide costs, decreased yields, and the downstream effects of changes in crop yield variability.

Dynamic Diffusion with Disadoption: The Case of Crop Biotechnology in the USA

Controversy over the use of genetically engineered (GE) crops may have induced some farmers to disadopt these seeds, making a traditional diffusion model inappropriate. In this study, we develop and estimate a dynamic diffusion model, examine the diffusion paths of GE corn, soybeans, and cotton, predict the adoption of those crops over the next two years, and explore the main determinants of the diffusion rate. Our estimates indicate that future growth of Bt crops will be slower or negative, depending mainly on the infestation levels of the target pests. Adoption of herbicide-tolerant soybeans and cotton will continue to increase, unless consumer sentiment in the United States changes radically.

Do Incentives For Quality Matter

We use an unusual dataset involving 14 tomato growers over 4 years to analyze the effect of incentive contracts on behavior in a fixed effects econometric model. We find that growers respond to incentive contracts by improving tomato quality, as predicted by economic theory. The comparison is not confounded by the usual contract endogeneity and simultaneity problems because of characteristics of the processing tomato industry and our dataset. We discuss the implications of our findings for the design of agricultural contracts. (This abstract was borrowed from another version of this item.)

Risk Versus Reward, a Financial Analysis of Alternative Contract Specifications for the Miscanthus Lignocellulosic Supply Chain

We evaluate how different contract designs impact risk sharing along the supply chain for the dedicated energy crop miscanthus. We model the full production and transportation system of the miscanthus supply chain because a sustainable supply chain must procure biomass in a cost-effective manner. Using this model, we estimate the financial returns and risks for both a farmer producing miscanthus and the biofuels plant purchasing miscanthus. We evaluate differences among contracts that are designed to address the miscanthus investment cost and the farmers’ opportunity costs. We find that risk can be reduced to both the farmer and the plant by offering a dollar per acre base payment combined with a dollar per ton payment. The farmer faces the lowest risk when the contract combines a dollar per acre and dollar per ton payment. Lastly, we find that indexed contracts designed to reduce annual counter-party risk associated with the risk of farmers opting out of the contract to produce competing crops actually increases overall financial risk to the farmer and plant.

Agricultural financial market segments

Purpose - For agricultural bankers, agribusiness managers, and salespeople, understanding customers and their preferences and behaviors is crucial to success. The two goals of this paper are first to identify todays distinct market segments for financial products for US crop and livestock commercial producers, and second to predict segment membership based on observable characteristics. Design/methodology/approach - Cluster analysis was used to identify four distinct buyer segments for the purchase of financial products and services by US crop and livestock commercial producers. A multinomial logit model was used to predict segment membership based on demographic, behavioral, and business management factors. Findings - Although, traditionally, the financial services industry has segmented the market for commercial producers based primarily on sales/size categories; this research shows that this factor is not a significant predictor of behavior. Instead, this paper proposes a segmentation based on buying behaviors and identify four distinct market segments for financial products and services for US crop and livestock commercial producers: balance, price, convenience, and service. The balance segment being by far the largest segment. Research limitations/implications - Although the sample size means is representative of the US ag population, it may or may not be representative of the customers of a regional lender. Readers who are lenders are therefore advised to apply this methodology to their customer database and use the results of the paper as a quality check or benchmarking exercise. The findings also raise a number of issues, which require further research, such as how to implement a targeted marketing plan when there is one dominant segment and two other distinct segments. Practical implications - Lenders need to reconsider their market segmentation methodology. Originality/value - While there has been some research on market segments for retail financial markets, apparently there has been no work on market segments for agricultural financial products. This study exploits a unique dataset of 2,575 responses to Purdues Large Commercial Producer Survey and the 2008 survey is the first time the survey included a series of detailed questions on how producers choose a financial service provider. This papers findings will benefit agricultural bankers and agribusinesses that offer financing to their customers.

Vertical economies of scope in dairy farming.

With the exception of Azzam and Skinner (2007), the economic literature on farm structure has largely neglected issues of vertical organization of the farm. In this article we estimate a multi-stage, multi-output cost function in order to measure vertical economies of scope in organic and conventional dairy farms. In particular, we model the integration of production of grains and forages on dairy farms. We find negligible vertical economies of scope for conventional dairy farms but significant vertical economies of scope in organic dairy production. The large vertical economies of scope for organic dairy farms are consistent with higher costs of obtaining organic feed through market transactions associated with an underdeveloped market for organic feeds.

Does On-Farm Quality Assurance Pay? A Cost-Benefit Analysis of the Grainsafe Program

Since the introduction of genetically modified (GM) crops, the commodity grain system has been under pressure to segregate GM and non-GM crops. Starting at the level of the grain handler, members of the grain supply chain have successfully used quality assurance and identity preservation programs to segregate non-GM crops. Producers delivering high value, identity preserved crops have become interested in implementing these quality management systems at the farm level. We conduct a cost-benefit analysis that shows that quality assurance program may be profitable for producers, depending on their farm size and equipment management strategy.