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We examine the relationship between investments in animal breeding and productivity growth on Wisconsin dairy farms using a control function approach. We incorporate farm‐level annual investment in breeding and genetics into the law of motion of productivity as in De Loecker (2013) to test the relationship between these investments and realized productivity. Our unique dataset also allows us to look at the effect of choosing bulls with high milk yield potential on productivity. Our results indicate that breeding investments made 3 years prior are associated with higher productivity of the current cohort. However, the farms with the highest level of productivity reap the lowest benefits from breeding investments, suggesting that there are diminishing returns to investing in genetics. When milk output is not quality adjusted, the contribution of breeding to productivity is undetectable, suggesting that breeding and investments in milk quality are related. We conclude that investments in breeding and genetics significantly contribute to dairy farm productivity, especially in terms of milk quality. [ABSTRACT FROM AUTHOR]

Abstract: This study quantifies the potential impact of biofuel/bioenergy development on the pulpwood market in Wisconsin. Important demand and supply factors to take into account when quantifying the potential spillover effects include: (i) availability of regional forest residues, (ii) forest biomass demand of the Renewable Portfolio Standard (RPS) mandated by the state, and (iii) the slack pulpwood supply due to the recent economic recession. The results indicate that given the limited amount of regional forest residues, demand for primary forest resources over 2.29 million dry Mg will likely spill over into local pulpwood market and have a pronounced impact on pulpwood prices. The price effect could be more substantial if the pulp and paper industry expands production capacity significantly over the same period. [Copyright &y& Elsevier]