Glenn D. Schaible

Economic Impacts of the U.S. Soybean Aphid Infestation: A Multi-Regional Competitive Dynamic Analysis

We estimated the economic benefits resulting from controlling soybean aphid infestation by using a multi-regional competitive dynamic equilibrium model. Results indicate that the reduction of soybean production resulting from a soybean aphid infestation is largely absorbed by reducing soybean exports, due to the higher price elasticity of export demand compared to domestic demand. Producer benefits resulting from controlling soybean aphids would increase by between

Economic Benefits Resulting From Irrigation Water Use: Theory and an Application to Groundwater Use

949 million and

Economic Analysis of the Changing Structure of the U.S. Flour Milling Industry

1.623 billion in ten years under various scenarios. Results also suggest that it is economically more efficient to control soybean aphids when the rate of intrinsic growth is relatively lower, the supply price elasticity of soybean acreage is relatively more elastic, and insecticide treatment costs per acre are lower. However, if the discovery of the gene Rag-1 (TF04048) leads to new cultivars that withstand the soybean aphid, our estimates will overestimate the actual damages. Even so, our analysis demonstrates that it is critical to control soybean aphids early in their infestation cycle to avoid a rapid increase in damages.

Structural Conservation Practices in US Wheat Production: A Cost-Function Technology Adoption Approach 1

Traditional economic analysis using a crop production function approachhas assumed that all variable factors, including irrigation water, arefully employed in the crop production process. However, this paper firstdemonstrates that economic benefits of irrigation water areoverestimated when the crop production function, and therefore theirrigation water demand function, is expressed in terms of irrigationwater supplied, rather than consumptive irrigation water use. Second,the paper demonstrates that the magnitude of the estimation bias isproportional to the rate of irrigation water losses through leaching,runoff and evaporation. Consequently, the model misspecification problemwould lead to increased irrigation water use and reduce incentives forfarmers to adopt improved irrigation technologies.

A Note on the Reliability Tests of Estimates from ARMS Data

This article presents a decomposed Poisson regression model based on count data that evaluates structural changes in size, number of plants in each size class, and the concentration level of market power in the U.S. flour milling industry, simultaneously. Empirical results indicate that the effects of a changing wage rate and corporate bond rate on both the size distribution and the number of flour mills are significant, but in opposite directions. Furthermore, a test for price leadership reveals that the U.S. flour milling industry has an oligopolistic market structure. [Econ-Lit citations: D430, L110, Q120]

Modeling the Effects of U.S. Biofuel Policies on Commodity and Energy Markets

Abstract Based on 2004 CEAP-ARMS Phase II data, higher-sales farms not participating in a conservation programme adopted farmland conservation structures much more intensively on wheat fields than did any other farm-size type among conservation programme participants or non-participants. Survey results suggest that wheat farms not participating in a conservation programme more frequently adopted infield conservation structures, while conservation programme participants more often installed field perimeter conservation structures. Wheat producers, particularly those not participating in a conservation programme, recognize productivity and profitability benefits of infield structures as sufficient to promote their adoption without programme incentives. However, for field perimeter structures, programme incentives may be needed to encourage their adoption because benefits are more commonly off-site. To supplement univariate comparisons between conservation programme participants and non-participants, we used a cost-function based acreage allocation model to examine adoption of structural conservation practices, including such practices as strip cropping, terraces, grassed waterways, field borders, and stream-side herbaceous buffers. To accurately assess the potential environmental impacts of conservation programmes, it is important to account for the variability in on-site field, farm, and environmental conditions influencing producer adoption decisions. Econometric models suggest that not accounting for factors such as field, farm, operator, and environmental attributes will likely under- or overestimate adoption of conservation structures with respect to input and commodity prices, regardless of programme participation status.

The value of integrated CEAP-ARMS survey data in conservation program analysis

USDA uses the concept of “publish-ability” rather than statistical reliability of an estimate for quality validation of USDA estimates, which is solely based on the sample size and the coefficient of variation (CV). We demonstrate conceptually how the reliability of the sample mean can be tested by estimating the upper and lower bounds of the confidence interval for an unknown population mean using the CV. However, the reliability test for the sample mean can be made only under the normality assumption. USDA multiple-way Agricultural Resource Management Survey (ARMS) estimates are used to illustrate the relative measure of precision for sample-based estimators.

Working-Land Conservation Structures: Evidence on Program and Non-Program Participants

The Renewable Fuel Standard under the Energy Policy Act of 2005 redefines ethanol as a renewable domestic fuel supply, rather than just a fuel oxygenate, while the American Job Creation Act of 2004 creates biofuel tax credits and the Energy Independence and Security Act of 2007 mandates biofuel blending. We formulate an integrated economic simulation model of corn/soybean and biofuel production to simultaneously evaluate the impacts of U.S. biofuel policies on domestic commodity and energy prices. The model is used to demonstrate that first, while ethanol production increases due to both the ethanol tax credit and a blending mandate, conventional gasoline production would decline as a result of the blending mandate. These results are supported by current energy data. Therefore, there is no evidence that blended gasoline price would be higher without mandated ethanol production. Second, both domestic corn and ethanol production as well as ethanol imports would slightly decline due to the blenders’ market power effects when the tax credit for ethanol is reduced to

Factors influencing environmental stewardship in U.S. agriculture:Conservation program participants vs. non-participants

0.45 per gallon (beginning in January 2009), but the blended gasoline price would be higher at the pump so that total gasoline consumption would decline.