Joe L. Outlaw

Economics of sugar-based ethanol production and related policy issues.

The feasibility of integrating ethanol production into an existing sugar mill was analyzed by a stochastic spreadsheet model. As the price of corn continues to rise, ethanol producers will eventually need to look at other feedstock alternatives. Sugarcane has been proven to work well in the production of ethanol in Brazil. The results indicated existing U.S. sugar mills could economically switch to ethanol production. As imports into the United States threaten to undermine the U.S. sugar program, sugarcane producers have a viable alternative. At the very least, the alternative exists to diversify their income streams with ethanol production.

Extension's Decline?

The perception that extension funding has materially declined is not borne out in aggregate U.S. funding data. However, many states experienced substantial reductions in real terms in 1992 and 1993. The pattern of reductions appears to be most extensive in the East, South, and West and in states dependent on extractive industries, although major agricultural states are not immune. In a time of tighter budgets, one might question the extension strategy of continually broadening its clientele. Extension may be better served by concentrating in areas of comparative advantage where experiment station research results serve as crucial input to extension programs in agriculture, forestry, and consumer/family sciences. County support is argued to be crucial to survival of the system.

Ranking Risky Alternatives:Innovations In Subjective Utility Analysis

Over the past 50 years there have been innovations in the quantitative methods available to rank risky alternatives (mean-variance (MV), first degree stochastic dominance (FSD), and second degree stochastic dominance (SDS)). Two recent innovations, stochastic efficiency with respect to a function (SERF) and StopLight are compared to MV, FSD, and SDS to demonstrate the strengths and weaknesses of each method. The results indicate that SERF and Stoplight are powerful tools that do not suffer from some of the limitations as the other risk ranking methods.

Financial and Risk Management Assistance: Decision Support for Agriculture

The Financial and Risk Management (FARM) Assistance program created by Texas Cooperative Extension is a strategic analysis service offered to farmers and ranchers in Texas. The program serves as an example of large-scale, focused programming by extension agencies, as well as the implementation of technical stochastic simulation methods for use on the farm.

RELATIONSHIPS BETWEEN MARKET PRICE SIGNALS AND PRODUCTION MANAGEMENT: THE CASE OF FED BEEF

The beef industry in the United States consists of several distinct production levels ranging from the cow-calf producer at the lowest level to the final consumer. These sectors face varying levels of profitability, degrees of market power, conflicting goals, and price signals. Environmental regulations involve questions of what costs are involved, who is in a position to pay these costs, and whether market prices are capable of signaling different environmental practices. Understanding the relationships within the beef industry may allow researchers to fine-tune analyses of environmental issues in the beef industry.

FARM LEVEL IMPACTS OF REDUCED CHEMICAL USE ON SOUTHERN AGRICULTURE

In anticipation of Congressional debates over an expanded environmental title in the 1990 farm bill, several studies on pesticide use and the impacts of reduction were undertaken (e.g., Smith et al., Knutson et al., Osteen and Szmedra, and GRC Economics). Osteen and Szmedra reported that the use of herbicides, insecticides, and fungicides increased steadily from post-World War II to 1982 before decreasing as crop prices declined and acreage reduction programs reduced planted acreage. Heightened concerns and perceptions about the presence of pesticides and nitrates in our food and water supplies have led to calls for the reduction and/or elimination of agricultural chemicals. For example, a National Academy of Science study has concluded and therefore fostered the perception that substantial reductions in chemical use are possible without large impacts on production and/or prices. (This abstract was borrowed from another version of this item.)

Greenhouse Gas Emissions from U.S. Grain Farms

ABSTRACT Farm-level environmental impact assessments for U.S. agriculture exist, but results are often not comparable because of different methodologies used. The objective of this research was to estimate the greenhouse gas emissions (GHG) levels for multicrop farms in the United States. A partial life cycle assessment (LCA) for 47 representative grain farms was performed, showing heterogeneous emissions across farm size, crops, and regions. Emissions of carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O) were estimated and transformed into CO2 equivalents (CO2e) per hectare and kilogram of production. The GHG emission intensity was affected by three characteristics: location, farm size, and cropping system. When crops were grown in different regions, they had different GHG intensities because of differences in soil quality, yields, and production efficiency. Emissions tended to be less per hectare and ton of the crop on larger farms. Crops grown outside their principal production regions were often more GHG-intensive than the same crops in their principal growing regions. The results of this study suggested that there was a correlation between production efficiency and GHG efficiency with higher yielding and/or larger operations having reduced emissions per unit of output.

Web Delivery of a Monte Carlo Simulation Model: The Base and Yield Analyzer Experience

The provision for producers to update base acres and payment yields in the 2002 farm bill afforded an opportunity to test whether it was feasible to deliver a complex simulation model directly to producers. A Monte Carlo simulation model for assessing the economic impacts of the alternative base and yield options on individual farms was developed and made available to producers via the World Wide Web. The experiences and challenges from this collaborative extension and research effort are described, as well as the issues educators might consider before delivering complex software to a national audience via the Web.

IMPACT OF REDUCING FEDERAL ORDER CLASS I DIFFERENTIAL ON REPRESENTATIVE TEXAS AND NEW MEXICO DAIRY FARMS

The General Accounting Office (GAO) recommended that the USDA substantially reduce or eliminate the extent of price discrimination practiced under federal milk marketing orders. The purpose of this study was to quantify the impacts of alternative means of implementing the GAO proposal on the economic viability of Texas and New Mexico dairy farms. Five dairy farms were simulated for six years under the current dairy policy and five alternative proposals. Results of the analyses indicate that large New Mexico dairies can remain economically viable under all of the alternatives. On the other hand, federal order policy changes would accelerate the loss of equity for moderate size Texas dairy farms.

Kernal density functions to estimate parameters to simulate stochastic variables with sparse data: what is the best distribution?

The purpose of this paper was to compare the goodness-of-fit for several parametric and kernal-based distributions to determine which distribution would perform well for simulating continuous random input variables whose underlying distributions were unknown. A Monte Carlo simulation procedure was developed to estimate how well some proxy distributions performed at approximating the distributions of random input variables. We conclude that without any a priori information on which to pick a probability distribution, the distribution for simulating a random input variable with limited specifications was a Parzen kernal distribution.