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This study builds upon the existing literature on the Working curve and backwardation to explore the impact of storage regimes on the volatility measures of substitute agricultural commodity markets. We investigate the impact of commodity fundamentals (storage regime and stocks-to-use ratio), commodity-specific financial variables (options hedging pressure-long and -short), world economic activity, market-wide volatility index, seasonality, and time-to-maturity on nearby and deferred implied volatility (IV) series of selected commodity pairs of corn-soybean and winter wheat-spring wheat. Our work confirms that, in some cases, grain and oilseed IV derived from options premia respond to shocks in commodity (and substitute commodity) fundamentals which are in line with the behaviour of volatility in futures markets. Own-storage regime effects on price variability are stronger in the selected markets, while spillover effects from substitute commodity storage regimes show a modest impact on volatilities. We also find some evidence for the stocks-to-use ratio of both corn and soybean to impact both their own and each other's IV, while options hedging pressure has some impact only on wheat IVs. [ABSTRACT FROM AUTHOR]

We analyse a panel of 25 European-countries to provide novel estimates of monthly own-price, cross-price, and income elasticities of natural-gas-demand from 2005 to 2020. We find that: first, there is an European Standard Behaviour (ESB) with a strong-seasonal component. Second, we identify three different patterns from the ESB: 1) France, Denmark and Estonia present slightly positive elasticities in the short-run and a lack of sensitivity to own-price variations in the long-run –we argue this phenomenon is due to a higher weight of heating demand-. 2) Latvia presents a lower sensitivity to own-price variations than the ESB -we argue due to the role of natural gas as a unique backup technology in the power sector-. 3) In Portugal, natural gas showed the highest own-price elasticities – we argue that natural gas is used mainly in the power sector with substitutive technologies-. Finally, we find that Covid-19-lockdowns highly impacted natural-gas-demand, confirming the “double-heating-effect”.

Many cattle producers and producer organizations are concerned that the live cattle negotiated market has become too thin. The percentage of live cattle procured through direct negotiations has declined below 20%, while the percentage procured through formulas has increased to more than 60%. Most formulas are based on directly negotiated cattle prices. Proposed legislation mandating that a larger percentage of live cattle be procured through negotiations represents a market intervention. We show that live cattle futures prices are good proxies for negotiated cash prices, while being less restrictive for meeting proposed cash cattle procurement percentage requirements. [ABSTRACT FROM AUTHOR]

As the market for fine-wine investing matures, basic questions of portfolio strategy remain unexplored. I evaluate how adding fine wine from the superstar châteaux of Bordeaux's Right Bank might complement the traditional focus on the five first-growths of Bordeaux's Left Bank. Fundamentals for the Right Bank's superstars are attractive: they produce roughly an order of magnitude less, face different production conditions, and receive equally impressive critical reviews. However, they receive far less attention than their Left Bank counterparts. To examine returns over the long run, I hand-collected 10,885 prices for eight wines from an archive of 391 Sherry-Lehmann catalogs, a New York City retailer, which began at the end of Prohibition. Using these historical price records, I compare the real returns from investing in the five Premier Cru to a portfolio that adds three superstar châteaux from the Right Bank: Ausone, Cheval Blanc, and Petrus. I find the geometric-average annual return was 6.78% in real terms from 1938 to 2017 for the joint portfolio, less than 0.01% different, but with better risk-reward as measured by the Sharpe ratio. Additionally, I find the life cycle of aging is substantially different across the two Banks, which could provide further diversification benefits for the strategic investor. [ABSTRACT FROM AUTHOR]

This paper investigates the relative importance of various attributes, including varietal, brands, and geographic origin, in explaining retail wine prices for the United States market. We use a metric based on the Shapely value, from cooperative game theory, in the context of an empirical hedonic price equation estimated using a large sample of retail wine sales for home consumption over the period 2007–2019. We find that brands alone explain more than 70% of the variation in wine prices, but geographic origin and varietals retain additional explanatory power. Furthermore, information about the geographic origin appears to be a considerably more important attribute than varietals. [ABSTRACT FROM AUTHOR]

The agri-food sector contributes significantly to economic and social advancements globally despite numerous challenges such as food safety and security, demand and supply gaps, product quality, traceability, etc. Digital technologies offer effective and sustainable ways to these challenges through reduced human interference and improved data-accuracy. Innovations led by digital transformations in the agri-food supply chains (AFSCs) are the main aim of ‘Agri-Food 4.0’. This brings significant transformations in the agri-food sector by reducing food wastage, real-time product monitoring, reducing scalability issues, etc. This paper presents a systematic review of the innovations in the agri-food for digital technologies such as internet-of-things, artificial intelligence, big data, RFID, robotics, block-chain technology, etc. The employment of these technologies from the ‘farm to fork’ along AFSC emphasizes a review of 159 articles solicited from different sources. This paper also highlights digitization in developing smart, sensible, and sustainable agri-food supply chain systems.

Using a random utility consistent discrete-continuous model, we analyze decisions by a sample of Australian farmers on the mix of herbicides and their intensity of use. The proposed model is flexible and even accommodates decisions concerning a single herbicide. We use a sequential quadratic programming-based forecasting approach to predict optimal herbicide types and allocations. Structural estimates are used to forecast how price changes affect herbicide demand. The forecasting approach allows for calibration of alternative specific constants to reproduce existing brand market shares. [ABSTRACT FROM AUTHOR]

We use data from Wine Spectator on 266,301 bottles from 12 countries sold in the United States to investigate the link between the score awarded by the guide and the price charged. The link between quality and price is positive, in line with the literature. In a deeper inspection, however, hedonic regressions show that the price premium attached to higher quality is significant only for "superstar" wines with more than 90 points (on a 50–100 scale), while prices of wines between 50 and 90 points are not statistically different from each other. Furthermore, an analysis performed through normal heteroskedastic and quantile regression models shows that the dispersion of quality-adjusted prices is described by an asymmetric U-shaped function of the score; that is, products with the lowest and highest quality have the highest residual standard deviation. Pursuing excellence is a risky strategy; the average price is significantly higher only for wines that achieve top scores, and the price premium becomes more volatile. [ABSTRACT FROM AUTHOR]

Wine investment returns can come from overall market trends or price increases with age. Because of the short wine price histories available, market and maturation effects are difficult to separate. Consequently, researchers often obtain dramatically different estimates of investment returns. We find that data sample bias may be the hidden cause of the disparate estimates. In wine auction data, the sample bias refers to a shift in the distribution of which wines are traded as a function of their age. Such sample bias in panel data sampled across many different wine labels can distort the estimation of price increases versus age and consequently impact the estimation of market trends. This analysis shows that segmenting the analysis such that the data panels contain wine labels with similar trading characteristics can lead to a more stable estimation. The analysis here looks at data from Bordeaux, Italy, Australia, and California. An Age-Period-Cohort (APC) analysis is applied to data panels from each region. Then the data in each region is segmented by a measure of popularity in order to reduce sampling bias. Data thus segmented is then re-analyzed to demonstrate the difference in estimating price appreciation lifecycles and market trends. [ABSTRACT FROM AUTHOR]

The past forty years have witnessed a rapid expansion of grain and oilseed production in the southern hemisphere, particularly in South America. The growth of southern hemisphere production is significant, not only because it has increased supplies to meet growing world food needs but also because it has effectively shortened the global crop growing cycle from twelve months to six months. In this paper, we develop and analyze a semi‐annual stochastic spatial–temporal equilibrium model of a generic agricultural market with two major exporting regions, North and South, which plant and harvest at different times of the year. As a case study, we calibrate our model parameters to reflect the stylized facts of the global soybean market between 1980 and 2019, with the United States serving as North and Brazil and Argentina serving as South. We find that more balanced production, with both hemispheres producing nearly equal amounts at different times of the year, has, from a global perspective, shortened the traditional crop "season" from twelve months to six months, allowing semi‐annual adjustments to planned production that stabilize supply and prices in all regions while reducing global inventories. [ABSTRACT FROM AUTHOR]

We estimate the degree of spatial differentiation–primarily driven by transportation costs–among downstream firms that buy corn from upstream farmers and examine whether such differentiation softens competition enabling buyers to exert market power (defined as the ability to pay a price for corn that is below its marginal value product net of processing cost). We estimate a structural model of spatial competition using corn procurement data from the U.S. state of Indiana from 2004 to 2014. We adopt a strategy that allows us to estimate firm‐level structural parameters while using aggregate data. Our results return a transportation cost of 0.5 cents per bushel per mile (10% of the corn price under average conditions), which provides evidence of spatial differentiation among buyers. The estimated average markdown is $0.67 per bushel (13% of the average corn price in the sample), of which $0.49 is explained by spatial differentiation and the rest by the fact that firms operated under binding capacity constraints. Finally, we evaluate the effect of hypothetical mergers on input markets and farm surplus. A merger between nearby ethanol producers eases competition, increases markdowns by 18%, and triggers a sizable reduction in farm surplus. In contrast, a merger between distant buyers has negligible effects on competition and markdowns. [ABSTRACT FROM AUTHOR]

In this article, we discuss whether there was a single Latin American pattern of agricultural growth between 1950 and 2008. We analyse the sources of growth of agricultural production and productivity in ten Latin American countries. Our results show that the differences between these countries are too large to establish a single pattern for this region. However, certain common trends may be observed, such as the growing importance of labour productivity as a component of agricultural production growth and the increasing relevance of total factor productivity as a component of agricultural labour productivity growth. [ABSTRACT FROM AUTHOR]

The study applies parametric and nonparametric estimation methods to determine hedonic prices of rice quality attributes, and a partial equilibrium model to determine the payoff to investing in quality improvement in five countries in Sub-Saharan Africa. Results indicate that consumers are willing to pay price premiums for head rice, slender grains, peak viscosity, parboiled rice, and rice sold in urban markets. However, they strongly discount amylose content, rice with impurities and imported rice. Investing in quality improvement through amylose content reduction leads to net welfare gains with a benefit-cost ratio of 47.86 and internal rate of return of 90%. [ABSTRACT FROM AUTHOR]

We develop a supply‐response model for producers with invariant preferences facing price risk and apply it empirically to sample data from Cretan olive‐oil producers. We estimate a Generalized Leontief cost function and use the price distribution historically faced by individual farmers to induce different representations of price risk that are consistent with the invariant preference structure. These different risk measures are combined with the estimated cost structure to provide distinct estimates of the risk‐efficient frontier faced by a representative producer with invariant risk preferences and to derive estimates of producer's generalized coefficients of risk aversion for different measures of price risk. [ABSTRACT FROM AUTHOR]

In this paper, we employ a combination of time regression discontinuity design method (T‐RD) and the difference‐in‐difference method (DID) to identify and quantify the causal effects of the strict lockdown policy on vegetable prices using multiple‐year daily price data from 151 wholesale markets of Chinese cabbage. We find that the lockdown policy caused a large and immediate surge in price and price dispersion of Chinese cabbage, though they fluctuated smoothly for the same period in normal years. The DID results further show that the price surge peaked in the fourth week of lockdown but gradually came down to the level of a normal year by week 11. However, the price rose again (though to a much smaller extent) in response to the resurgence of COVID‐19 in a few provinces in early‐mid April but quickly returned to the normal level in week 15 when the lockdown measures were largely removed. We also find that the supply chain disruption is the driving factor for the price hike. Policy implications are drawn. [ABSTRACT FROM AUTHOR]

We construct estimates of own‐ and cross‐price corn rotation elasticities using a field‐level dataset that accounts for over 83% of the US corn‐producing area. We allow rotational response to vary by estimating separate models across 115 subsamples that we delineate using Major Land Resource Areas (MLRAs) and soil characteristics. The results show a high degree of rotational response heterogeneity. Across the country, we find that rotational response is elastic in some areas and near zero in others. After aggregating the results to the national level, we find that modeling rotational response without allowing for heterogeneity produces a short‐run own‐price elasticity of corn planting of around 0.50, which conforms to the latest estimates in the literature. When allowing heterogeneous price sensitivity, our preferred estimate of the rotation elasticity is 0.69. This is evidence that imposing a uniform rotation response could seriously bias aggregate elasticity estimates. [ABSTRACT FROM AUTHOR]

We consider the Bayesian estimation of continuous regression models where the cutoff points that separate different slope regimes are unknown but related to an observed input. Using plateau and von Liebig production functions as examples, we compare the performance of Bayesian mixture models that explicitly estimate regime membership probabilities to Bayesian threshold models that instead treat the unobserved threshold input as a model parameter. Using simulated data as well as actual data from two crop response trials, we show that the threshold model generally outperforms the mixture model in terms of estimation efficiency and predictive accuracy. We also illustrate how Bayesian model averaging can be employed when model performance is less clear cut. Our estimation framework is suitable for a wide range of applications in agricultural and resource economics —as well as other fields. [ABSTRACT FROM AUTHOR]

This study evaluates a system of USDA's Net Cash Income forecasts, released as part of the farm sector's income statement, which includes crop receipts, livestock receipts, government payments, farm‐related income, and expenses from 1986 to 2017. We examine these forecasts jointly for bias, accuracy, efficiency, and compositional consistency. Our findings demonstrate that underestimation in early Net Cash Income forecasts stems from underestimation in crop and livestock receipts as well as expenses forecasts. While most components except government payments contribute to the improvement in 12‐month‐ahead forecasts, improvements in 9‐month‐out forecasts are mostly due to crop receipts and expenses forecasts, and government payment forecasts were a main source of improvement in 6‐month‐ahead forecasts. Despite the observed biases and inefficiencies, these forecasts are compositionally consistent with the actual outcomes and represent realistic projections of the farm sector accounts. [ABSTRACT FROM AUTHOR]

Can farmers adapt to climate change by altering effective weather conditions on their fields? Existing technologies allow farmers to cool down plants by a few degrees during critical periods, reducing the damage from excess heat. With nonlinear effects of high temperatures on yields, slight cooling can bring significant gains in many crops. We call this approach "microclimate engineering" (MCE) and note that it could be useful as a climate change adaptation concept. Our case study deals with California pistachios, threatened by warming daytime temperatures in the winter. A new solution for sunlight reflection, based on products already used in other contexts and crops, could potentially help deal with this challenge. We develop a model to analyze grower choice and market outcomes with MCE for California pistachios. The expected increase in welfare for the period of 2020–2040 is assessed at 0.49–1.42 billion dollars under several scenarios. Simulation results show increases in consumer surplus and total welfare when MCE is available but decreases in aggregate grower profits. We also introduce market power to test its potential effects on the gains from MCE, finding mixed effects. [ABSTRACT FROM AUTHOR]

Concerns surrounding horizontal concentration, vertical coordination, regional procurement areas, and resultant thinly traded input markets have beset the U.S. beef industry for decades. In late 2016, Tyson Foods, Inc. announced to its suppliers that it would no longer purchase Holstein cattle at its Joslin, IL harvest facility. This alteration to Tyson's procurement policy provides a unique opportunity to estimate the degree and extent to which a firm‐level decision impacted the beef supply chain. Results indicate that Tyson's decision resulted in a 5.5% (3.5%) reduction in live (dressed) Holstein prices. This impact was immediate, and the updated equilibrium price relationship has persisted. Price impacts were more significant upstream; Holstein feeder cattle prices were reduced by 22% initially and struggled to find a new equilibrium level for more than two years, ultimately stabilizing 4.8% below pre‐announcement levels. We extend the price adjustment analysis to estimate impacts on U.S. Holstein feeder operations' revenues and gross margins, quantifying losses totaling $610 million annually. [ABSTRACT FROM AUTHOR]

A large number of previous studies suggest that many USDA forecasts are biased and/or inefficient. These findings, however, may be the result of the assumed loss function of USDA forecasters. We test the rationality of the USDA net cash income forecasts and the WASDE production and price forecasts between 1988 and 2018 using a flexible multivariate loss function that allows for asymmetric loss and non‐separable forecast errors. Our results provide robust evidence that USDA forecasters are rational expected loss minimizers yet demonstrate a tendency to place a greater weight on under‐ or overprediction. As a result, this study provides an alternate interpretation of previous findings of forecast irrationality. [ABSTRACT FROM AUTHOR]

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The dairy industries in California, Idaho, and New Mexico expanded rapidly during the early 2000s. This study focuses on the expansion effects on milk-to-hay price responsiveness. Dairy industry expansion makes hay markets tighter, with less available marketable supply in most periods. The empirical models account for the expansion effect as well as those from hay exports and low stocks-to-use ratios that also cause changes in hay market demand characteristics. The results show that hay-to-milk price responsiveness increased after dairy expansion in all analyzed states. Low stocks-to-use and high exports dampened the responsiveness, but were not statistically significant for all analyzed states. [ABSTRACT FROM AUTHOR]

COVID‐19 has had unprecedented effects on the US economy, in large part because of its effects on workers. Within food and agriculture, these effects pose the greatest threat to the production of labor‐intensive commodities—in particular, fruits and vegetables, the production of which tends to require large numbers of workers for harvesting and packing. We econometrically estimate the effects of COVID‐19 on fruit and vegetable production as the US agricultural labor supply is adversely affected by this pandemic. The major crop losses include $16 million in lettuce, $5 million in apples, and $4 million in grapes. [ABSTRACT FROM AUTHOR]

COVID‐19‐related disruptions led to a historic rise in the spread between livestock and wholesale meat prices. Concerns about concentration and allegations of anticompetitive behavior have led to several inquiries and civil suits by the U.S. Department of Agriculture and the U.S. Department of Justice, with increases in price differentials serving as a focal point. This article notes the difference between price spreads and marketing margins, outlines corresponding economic theory, and describes the empirical evidence on wholesale meat and livestock price dynamics in the wake of COVID‐19 disruptions. At one point during the pandemic, beef and pork packers were both operating at about 60% of the previous year's processing volume. We explore how such a massive supply shock would be expected to affect marketing margins even in the absence of anticompetitive behavior. Moreover, we document how margin measurements are critically sensitive to the selection of data and information utilized. Finally, we conclude with some discussion around policy proposals that would pit industry concentration against industry coordination and economies of scale. [ABSTRACT FROM AUTHOR]

Cattle producers and markets faced massive disruptions due to COVID‐19 in both supply and demand for cattle and beef. Restaurant and food service shutdowns affected beef demand. Closures and slowdowns of beef processors caused a logjam of live cattle in the supply chain. The resulting effects on cattle producers at all levels were lower prices and abnormal cattle flows, but the magnitudes of those effects were not homogenous across size and type of cattle. In this article, we detail how the COVID‐19 pandemic has affected cattle markets and cattle producers across the different sectors. We also discuss policy responses and considerations. [ABSTRACT FROM AUTHOR]

RNA interference (RNAi) is a naturally occurring biological process that has the potential to cut production costs in the livestock sector. RNAi can be used to silence gene expression in organisms. Yet, genetic technologies are often viewed as controversial in the food sector. An online survey was used to determine U.S. consumers' perceptions and attitudes toward RNAi technology's application in the beef sector. Respondents were given one of four information treatments in addition to a base statement describing RNAi. We estimate three models of demographic variables using a generalized ordered logit. Findings reveal that consumers would prefer RNAi be applied to the beef sector for the purpose of increasing animal health, reducing the use of antibiotics, and to protect cattle from disease. Overall, consumers show an apprehension toward the technology due to food safety concerns. Females and older individuals are less accepting while having a college graduate are more receiving of RNAi technology.

The agricultural and food sector is an ideal case for investigating the political economy of public policies. Many of the policy developments in this sector since the 1950s have been sudden and transformational, while others have been gradual but persistent. This article reviews and synthesizes the literature on trends and fuctuations in market distortions and the political-economy explanations that have been advanced. Based on a rich global data set covering a half-century of evidence on commodities, countries, and policy instruments, we identify hypotheses that have been explored in the literature on the extent of market distortions and the conditions under which reform may be feasible.

We estimate U.S. organic farmers' marginal willingness to pay to rent an acre of certified organic land relative to conventional farmland. Using a selection-on-observables design and farm-level data on farmland rental rates, organic status, and many conditioning variables, we address the role of profitability in mediating the effect of organic status. We find a 26% rental rate premium for organic farmland not driven by higher profits on organic farms. This premium is a modest incentive for landowners but a barrier for tenants to convert to organic farming practices, which may explain limited growth in U.S. organic acreage. [ABSTRACT FROM AUTHOR]

The dominant market where information is discovered plays the role of price leader providing substantial market information to other markets. This study investigates the dynamic relationships of 30 cattle markets across regions, cattle types, and cash/futures markets. The comparison of many markets, using an error correction model, is accomplished with the introduction of a tournament with a hierarchical cluster analysis, which allows us to conclude that the leading price for the U.S. cattle markets is discovered in the futures markets for both feeder and fed cattle. [ABSTRACT FROM AUTHOR]

This paper looks at the disruption in food supply chains due to COVID‐19 induced economic shutdown in India. We use a novel dataset from one of the largest online grocery retailers to look at the impact on product stockouts and prices. We find that product availability falls by 10% for vegetables, fruits, and edible oils, but there is a minimal impact on their prices. On the farm‐gate side, it is matched by a 20% fall in quantity arrivals of vegetables and fruits. We then show that supply chain disruption is the main driver behind this fall. We compute the distance to production zones from our retail centers and find that the fall in product availability and quantity arrivals is larger for items that are cultivated or manufactured farther from the final point of sale. Our results show that long‐distance food supply chains have been hit the hardest during the current pandemic with welfare consequences for urban consumers and farmers. [ABSTRACT FROM AUTHOR]

Debate about the economic impacts of sugar‐sweetened beverage (SSB) taxes have largely focused on pecuniary effects, but evidence has emerged that taxes could also convey information about what consumers "should" be doing. Disentangling the pecuniary and non‐pecuniary (or non‐price) effects using market data is a significant challenge. To address this issue, we study consumer choices in a simulated market environment in experimental conditions where we vary the reasons respondents are given for the cause of the price hike. We also study responses to a ban on large‐sized sodas, where the stated causes of the ban are randomly varied across respondents. We utilized random parameter logit models and use difference‐in‐difference estimates to identify the non‐pecuniary effect of a SSB tax and a large soda ban on SSB market shares. Our initial study, conducted in 2016, revealed significant non‐pecuniary effects, with soda choices falling less dramatically when subjects knew prices increased because of a soda tax. However, replications and extensions conducted in 2019 show no consistent non‐pecuniary effects. There is considerable heterogeneity across respondents in the difference‐in‐difference estimates, which is only partially explained by demographic or measured attitudinal variables. Results of this study emphasize the importance of carrying out replications and suggest, at least in the context of our experiment, non‐pecuniary effects are small relative to the traditional economic drivers. [ABSTRACT FROM AUTHOR]

In a sequential English auction, where multiple homogenous objects are offered, it is often found that the price tends to decrease over the course of the auction, which is referred to as the "declining price anomaly". This article studies the price trend in a sequential online live cattle auction. Motivated by the fact that in an English first‐price auction, the winning price is the maximum among all the bids offered, we examined the existence of the declining price anomaly by introducing the Generalized Extreme Value theory framework, and nesting it within a hedonic regression, where the price of cattle relates to the market values for cattle attributes. Empirical results indicate that the unit price difference between the first and the last lot sold ranges from $7.82 to $2.31, depending on the average animal weight in that lot. On average, the unit price of a stocker cattle lot sold in the last position of a typical sale is $5/cwt (or 3%) less than if it was sold in the first place, regardless of the scale of the sale and keeping all other factors constant. Based on the theoretical framework developed by Brendstrup and Paarsch (2006), we find that the buyer's maximum valuation on the subsequent object actually declines as he wins more objects, which provides a plausible explanation for the declining prices anomaly in sequential auctions. [ABSTRACT FROM AUTHOR]

Farmers face many types of risks that affect their behavior and well-being. Among these risks, the one related to the price of products appears the most economically sensitive. They develop various strategies to cope with this, either by taking decisions at the level of their exploitation, by using instruments offered by the market, or by diversifying their sources of income. This article analyzes, using a system Generalized Method-Of-Moment (GMM), the decisions made at the farm level to show that farmers are increasing their production and the areas that they sow in response to price volatility. Thus, price volatility exerts an incentive to increase maize production in Benin. This paper suggests taking the influence of risk aversion into account when defining policies to stabilize agricultural prices particularly in developing countries.