Jayson Beckman

Agriculture's Supply and Demand for Energy and Energy Products

Rising energy prices and changing energy and environmental policies have transformed the relationship between the energy and agriculture sectors. Traditionally, the relationship has been one-way, with agriculture using energy products as an input in production; during the past decade, however, the energy sector’s use of agricultural products as renewable-fuel feedstocks has increased substantially. This report examines both sector and farm-level responses to changing market and policy drivers such as the increased production of biofuel crops and other sources of renewable energy, together with changes in production practices to economize on energy-based inputs like fertilizer. We provide insight into how farmers have adapted to the changes and update and provide new data on the evolving linkages between the energy and agricultural sectors.

Effects of Manure Use and Use Restrictions on Variable Production Costs and Net Incomes for United States Corn Producers

We utilize a treatment effects model to examine if there are differences in costs/profits for manure-using corn producers versus non-users. We find that manure users have lower peracre operating costs via reductions in fertilizer and soil conditioner costs; however, the use of manure reduces grain yields and ultimately leads to no difference in profit. Separate results indicate that manure-use restrictions do not affect costs or profits; thus policies could be in place to regulate manure usage without impacting the costs/profit structure of the farm.

Determinants of Farm Income

Purpose - – The recent fluctuations in farm income remind us of the boom-bust nature of the agricultural sector. To better understand these fluctuations in farm income, the purpose of this paper is to examine the relationship between farm income and influential factors from 1964 to 2010 allowing for structural breaks in the data. Design/methodology/approach - – The authors estimate error-correction models for an overarching model and several sub-models at different scales based on their relationship with farm income: micro, meso, and macro. The authors then provide a series of impulse response functions (IRFs) that combine short- and long-run impacts in a rigorous framework indicating the response of farm income to shocks from any of the explanatory variables. Findings - – Results indicate that prices paid (PP) and received by farmers, technological change, interest and exchange rates (ERs), gross domestic product (GDP) and land prices all influence farm income. Results using IRFs show how increases in farm income arise from shocks to prices received and GDP; while PP, interest rates, and land prices have a negative impact on farm income. Technological progress and ERs switch from having a negative short-run impact, to a positive long-run impact. Originality/value - – This paper takes a fresh look at the single, overarching model for farm income determinants. The authors break this model into three separate levels, with results indicating that these sub-groups perform better than the one overarching model of all variables.

The Impacts of Tax Reform on Agricultural Households

&NA; Estimates of tax reforms impacts usually concentrate on macroeconomic impacts, but attention at the industry or sectoral level is often limited. Our study uses a computable general equilibrium (CGE) model to estimate the disaggregated impacts of the Tax Cuts and Jobs Act (TCJA) of 2018, which lowered personal and corporate tax rates. Focusing on agriculture, we use survey data to calculate how the TCJA would change the tax rates faced by farmers at the sector level. We use Internal Revenue Service data to calculate tax rates for all other producers. We then simulate the economy‐wide and sectoral effects of TCJA. We find that the TCJA would cause a reduction in agricultural output as resources would be reallocated to other sectors. Using our survey data, we extend the CGE results to measure the impacts to farm households—from changes in on‐ and off‐farm income. We find that most farm households would have income gains from tax reform. Our tax reform scenario highlights the fact that investment weighs heavily on model results. That is, firms that are attractive to domestic and foreign investment have gains in demand for their products, while other sectors, such as primary agriculture, experience decreases in production. A sensitivity analysis that reduces the attractiveness of the United States in foreign investment shows smaller impacts of TCJA, especially for macroeconomic variables.