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Increasing drought and extreme rainfall are major threats to maize production in the United States. However, compared to drought impact, the impact of excessive rainfall on crop yield remains unresolved. Here, we present observational evidence from crop yield and insurance data that excessive rainfall can reduce maize yield up to −34% (−17 ± 3% on average) in the United States relative to the expected yield from the long‐term trend, comparable to the up to −37% loss by extreme drought (−32 ± 2% on average) from 1981 to 2016. Drought consistently decreases maize yield due to water deficiency and concurrent heat, with greater yield loss for rainfed maize in wetter areas. Excessive rainfall can have either negative or positive impact on crop yield, and its sign varies regionally. Excessive rainfall decreases maize yield significantly in cooler areas in conjunction with poorly drained soils, and such yield loss gets exacerbated under the condition of high preseason soil water storage. Current process‐based crop models cannot capture the yield loss from excessive rainfall and overestimate yield under wet conditions. Our results highlight the need for improved understanding and modeling of the excessive rainfall impact on crop yield., This study reveals that excessive rainfall can adversely affect maize yield as much as extreme drought in the US, especially at regional scale. However, current process‐based crop models cannot capture the yield loss from excessive rainfall and overestimate crop yield under wet conditions. The results highlight the need for improved understanding and modeling of the excessive rainfall impact on crop yield.

The 2014 Farm Bill continued the trend towards more risk management-based support for U.S. farmers. However, it also represents a major departure from previous legislation by introducing multiple program options among which producers had the ability to choose. While allowing producers to have choices creates flexibility, the design of the program required producers to consider potential outcomes for crop prices and production levels in future periods when making their decisions. Experience over the first two years of program implementation suggests that while programs are working as designed, not all producers are fully satisfied with their enrollment decisions. This will lead to proposals for further modification to programs, and to questions about whether program choice should be a component of the next Farm Bill.

The 2014 Farm Bill required farmers and landowners to make a set of one-time, irrevocable decisions lasting for the duration of the farm bill. The decisions included the choice between three program alternatives with uncertain payments. To aid in making those decisions, the farm bill funded two key educational efforts: (a) the development of two online decision tools and (b) additional funding to support land grant institutions and extension systems to educate farmers through more traditional extension mediums, particularly in-person meetings. This paper provides an evaluation of both types of farm bill education through two case studies.

Purpose – The purpose of this paper is to provide empirical information about the past loss experience in major US crop insurance programs, and documents the impacts of ratings changes through time on the premiums and exposure to participants. The losses are also examined within the structure of the current SRA to identify impacts on insurance companies and the government by fund designation. Design/methodology/approach - The study uses RMA Summary of Business data and methods consistent with the use of loss-cost ratemaking to analyze loss performance across years with different starting prices and volatilities. Additionally, the RMA premium quoting system was replicated across years with the ability to adjust only one feature at a time to isolate the impacts of changes in individual rating elements from changes in market conditions. Tabulations are provided in map and table form to present the loss ratios through time, in aggregate across time, and within each of the possible funds in which exposures are held. Additionally, the tools developed allow a direct tabulation of the farmer-level premium impacts of individual changes in the policy premium system, and of changing conditions over time. Findings – Corn and soybeans represent dominant shares of aggregate policy premiums and liability, and also are the crops that underwent the greatest degree of revision in rates over the recent past both due to rate study implications, and to loss rate experience. Despite commonly made arguments that payments associated with the drought of 2012 “more than wiped out all historic gains,” it appears that insurance worked very much as intended and that the loss ratios through time are within reasonable ranges of targets. Fund designation, and the separation under the most recent SRA of Group 1 and Group 2 states substantially dampened the loss sharing and ability to capture gains by private companies, and leads to fairly low rates of return on a pure fund-loss sharing basis for insurance companies. Finally, despite the extreme losses of 2012, the aggregate performance of corn relative to the remainder of the program exhibits lower than average loss rates both in aggregate and on a scale-adjusted basis. Practical implications – The study provides an important means to isolate and assess implications of rate changes, and to associate causes of losses with rate charges. Additionally, the structure of the SRA, and possible future versions of the SRA are informed by both the aggregate, and the normalized performance results provided. And, the relative performance of major row, crops even with recent extreme losses, appears appropriate or positive to insurance companies after considering the impacts of the SRA on company exposure. In total, the evidence points toward appropriate movement toward target overall loss ratios in the US crop insurance program. Originality/value – This paper provides an extensive empirical evaluation of ratings for major crop insurance policies and provides a unique means to decompose sources of changes in premiums and rates across locations and through time. It also provides an evaluation of the performance of crop insurance post-SRA in a manner that allows both totals and scale-adjusted performance to be assessed.

Purpose – The purpose of this paper is to contribute to the empirical evidence about crop yield distributions that are often used in practical models evaluating crop yield risk and insurance. Additionally, a simulation approach is used to compare the performance of alternative specifications when the underlying form is not known, to identify implications for the choice of parameterization of yield distributions in modeling contexts. Design/methodology/approach – Using a unique high-quality farm-level corn yield data set, commonly used parametric, semi-parametric, and non-parametric distributions are examined against widely used in-sample goodness-of-fit (GOF) measures. Then, a simulation framework is used to assess the out-of-sample characteristics by using known distributions to generate samples that are assessed in an insurance valuation context under alternative specifications of the yield distribution. Findings – Bias and efficiency trade-offs are identified for both in- and out-of-sample contexts, including a simple insurance rating application. Use of GOF measures in small samples can lead to inappropriate selection of candidate distributions that perform poorly in straightforward economic applications. The β distribution consistently overstates rates even when fitted to data generated from a β distribution, while the Weibull consistently understates rates; though small sample features slightly favor Weibull. The TCMN and kernel density estimators are least biased in-sample, but can perform very badly out-of-sample due to overfitting issues. The TCMN performs reasonably well across sample sizes and initial conditions. Practical implications – Economic applications should consider the consequence of bias vs efficiency in the selection of characterizations of yield risk. Parsimonious specifications often outperform more complex characterizations of yield distributions in small sample settings, and in cases where more demanding uses of extreme-event probabilities are required. Originality/value – The study helps provide guidance on the selection of distributions used to characterize yield risk and provides an extensive empirical demonstration of yield risk measures across a high-quality set of actual farm experiences. The out-of-sample examination provides evidence of the impact of sample size, underlying variability, and region of the probability measure used on the performance of candidate distributions.

PurposeThis article aims to explore recent trends in farmland rental markets using data for the state of Illinois. Trends in the types of rental agreements used and the relationship between the rental rate for those contracts, land values, crop revenues, production costs, and farm returns are examined.Design/methodology/approachData from various sources and at different levels of aggregation for the state of Illinois are used to provide illustrations of historical trends in farmland rental agreements and rental rates, and how they are related to various market and industry factors. Focus is placed on the more recent period since 2005 characterized by high commodity price levels and volatility.FindingsThe majority of farmland in the Midwest is controlled under rental agreements which are increasingly of the fixed cash rent type. Rental rates have increased, but at a slower rate than farm returns. Average rental and interest rates imply that land values are consistent with the current market environment. Aggregate rental rates mask considerable variation in farm‐level rents, only a portion of which can be explained by differences in soil productivity. Given the current level of price volatility, the tenure position of a farm operation has a significant effect on downside risk exposure.Originality/valueThe illustrations provided in this paper should be of interest to researchers working in the area of farmland values and rental agreements, as well as to practitioners including farmers, landowners, and professional farm managers. The findings should motivate additional research and recognition of the importance of tenure position to the performance and risk exposure of grain farms.

PurposeFarm level data are essential to accurate setting of crop insurance premium rates, but their time series tends to be too short to allow them to be the sole data source. County level data are available in longer time series, however. The purpose of this paper is to present a methodology to make full use of the information inherent in each of these data sets.Design/methodology/approachThe paper uses a novel application of statistical tools for using farm and county level yield data to generate farm level yield densities that explicitly incorporate within county yield heterogeneity while accounting for systemic risk and other spatial or intertemporal correlations among farms within the county.FindingsThe empirical analysis shows that current approaches used by the Risk Management Agency to individualize premiums for a farm result in substantial mispricing of crop insurance premiums because they do not adequately capture farm yield variability and yield correlations between farms. The new premium setting method is empirically shown to substantially reduce government subsidies for crop insurance premiums.Originality/valueThe paper demonstrates how to extract more information from available data when setting crop insurance premiums, which allows the government to more closely tailor premiums to the farm than do current approaches.

Can the availability of poorly-designed government insurance alter technology adoption decisions? A theoretical model of technology adoption and insurance incentive effects for a high- and low-risk technology is developed and explored empirically using a unique dataset of skip-row agronomic trial data. A multivariate nonparametric resampling technique is developed, which augments the trial data with a larger dataset of conventional yields to improve estimation efficiency. Skip-row adoption is found to increase mean yields and reduce risk in areas prone to drought. RMA insurance rules have incentive-distorting impacts which disincentivize skip-row adoption. Copyright 2012, Oxford University Press.

Patterns in loss-ratio experience in the U.S. corn insurance market are investigated with a spatial econometric model. The results demonstrate systematic geographically related misratings and provide estimates of the impacts of several observable factors on the magnitude of misrating in the program. The model is used to estimate actuarial cross-subsidizations across the primary corn-producing states and counties. The impacts of the primary factors are substantial, resulting in net premium transfers of approximately 26 percent of total premiums annually. The misratings likely have important insurance demand, welfare, and land-use implications. ********** Insurance markets are typically best suited for risks that are uncorrelated, occur with high frequency, and have a large number of like participants--among a handful of other standard conditions. Systemic risks (such as in crop production) induce correlation in losses, violating the standard insurability conditions and potentially leading to market failures (Glauber, 2004). Complementary causes of market failures in such systemic risk markets may include capital market imperfections, inadequate reinsurance capacities, capital and information shocks due to unexpected events, fat-tailed distributions that prevent diversification, and agency problems (see, e.g., Froot, 2001; Brown, Kroszner, and Jenn, 2002; Jaffee, 2006; Ibragimov, Jaffee, and Walden, 2008). Private insurance firms typically respond to these risks by restricting the supply of insurance or simply not offering insurance at all (Froot, 2001; Cummins, 2006). In cases of private market failures, government is often persuaded to intervene. Historically, this has been observed to varying degrees in catastrophic and other systemic risk markets, including those for flood, multiperil crop, earthquake, hurricane, and terrorism insurance. Yet, governments tend to be ineffective in the dual roles of insurance provider and regulator (Priest, 1996; Cummins, 2006; Jaffee, 2006; Michel-Kerjan and Kousky, 2010). As a result, such markets often suffer from severe adverse selection problems (see, e.g., Makki and Somwaru, 2001) and, subsequently, low participation rates (see, e.g., Kriesel and Landry, 2004). Government intervention in insurance markets can also cause price distortions that interfere with the efficient allocation of resources and crowd out private market solutions (Brown, Kroszner, and Jenn, 2002). Agricultural crop production is characterized by a high degree of systemic risk, as spatially correlated weather events tend to induce correlation in production losses. With the exception of hail insurance (the risks of which are not generally systemic), virtually no private markets for agricultural insurance have historically existed in the United States. Rather, a significant government-sponsored crop insurance program has been in force since the Federal Crop Insurance Act of 1980. The Federal Crop Insurance Program is a unique arrangement between the government and private insurers and has several notable features. First, premiums are heavily subsidized by the government to encourage broad participation. On the delivery side, all policies are serviced and underwritten by private insurers. To induce private insurers to participate in the program, operating expenses are subsidized and losses are reinsured by the federal government. Importantly, insurance rates are set noncompetitively by the U.S. Department of Agriculture's Risk Management Agency (RMA)--the agency charged with administering the program--and market competition through differentiated rates is expressly illegal. The program has experienced rapid growth in participation in recent years and is also sizable program with total premium in 2008 of approximately $9.85 billion and total liabilities of $89.91 billion. Throughout much of its history the program has been plagued by the perception of problems including the failure of crop insurance to replace other forms of disaster assistance (Glauber, 2004), low perceived operating efficiency (Paulson and Babcock, 2008), concerns about market distorting effects of subsidization (Glauber and Collins, 2002), the perception that the insurance industry is overly rewarded for the risks in which they share (Glauber, 2004), and the need for high premium subsidization to induce participation. …

PurposeThis study seeks to evaluate the impacts of land rental arrangements on crop insurance and grain marketing decisions.Design/methodology/approachThe analysis is conducted in an Illinois corn‐soybean setting in which optimal marketing and crop insurance decisions are estimated for a risk‐averse producer under typical cash rent and share rent agreements using numerical simulation methods.FindingsResults indicate that the availability of crop insurance impacts the intensity of use of put options under both cash and share rent arrangements. Similar to previous work in this area, revenue insurance is found to cause a substitution away from marketing using put options, while yield insurance is complementary to price risk management alternatives. However, while insurance and marketing play a role under both types of land tenure arrangements, shifting from a cash rent to a share rent agreement provides a relatively greater degree of risk reduction.Practical implicationsThe results suggest that additional research is needed to explain trends in land rental contracts. Crop insurance and other federal programs may provide incentives to switch from share leases to cash rent arrangements. Changes to the design of these programs could facilitate risk management for producers more efficiently.Originality/valueThe unique contribution of this study is the comparison of insurance and marketing decisions under both cash rent and share rent agreements for crop land.

The authors develop a multicrop insurance model to evaluate crop insurance decisions when several crops are produced. The results suggest that the diversification effects derived from producing multiple crops can substantially alter the risk-reduction impacts of crop insurance versus if the decision is viewed from the perspective of a single crop. Further, the relatedness of crop production and price responses among crops differs considerably across insurance products and strategies. As a result, insurance strategies that might provide the maximum risk reduction for an individual crop do not necessarily carry over to the multicrop case. Copyright 2010, Oxford University Press.

This article examines factors affecting producers’ perceptions towards the relative importance of government support programmes in agriculture. Specific attention is placed on determining the effect of crop insurance usage on farmers’ views about the importance of government programme payments. Results from a semi-parametric ordered response model shows that producers who use yield- or revenue-based crop insurance products also tend to view government programmes with higher importance, suggesting that crop insurance and direct government support programmes tend to be complements rather than substitutes.

A stochastic, multi‐period simulation model is developed based on the prevalent capital structure theories, in searching for and identifying an optimal combination of related financing strategies. The model reflects both conceptual and empirical implications of the pecking order, trade‐off and signalling theories on farm business financing, investment, and expansion process. The comparisons of simulation output indicate that farm businesses could expand at a moderate speed accompanied by financial health when they concurrently adopt these financing tactics. Pecking order financing benefits short‐term financial management, trade‐off strategy effectively adjust farm capital structure, and the signaling theory enables the adoption of risk‐adjusted interest rate policies between the farm borrower and the lender.

Corn and soybean prices do not differ significantly among farms participating in the Illinois farm business farm management (FBFM) program from 1996 through 2005. While consistent with the literature, the finding is inconsistent with farmers' opinion of the importance of price. A conundrum exists. However, the study also finds that price and profit per acre are positively related when a given farm is examined over time. Thus, the conundrum can be explained as a difference in perspective: researchers examine variation between price and profit across farms at a point in time while farmers examine this variation within his/her farm over time. Nevertheless, the relationship a farmer observes is likely due to market supply and demand factors, not the farmer's managerial control over the price received. Copyright 2008, Oxford University Press.

Voluntary and involuntary culling practices determine the average parity when sows are replaced in a herd. Underlying these practices is the economic effect of replacing a sow at different parities. A dynamic programming model was used to find the optimal parity and net present value in breed-to-wean swine herds. The model included income and costs per parity weighted by the discount rate and sow removal rate. Three scenarios that reflect a wide range of cases were considered: low removal rates per parity with no salvage value (LRNS), high removal rates per parity with no salvage value (HRNS), and high removal rates per parity with a percentage of the sows having a salvage value (HRYS). The optimal parity of replacement for the base biological and economic conditions was 4 and 5 parities in the high and low removal scenarios, respectively. Sensitivity analyses identified the variables influencing the optimal replacement parity. Optimal parity of replacement ranged from 3 to 7 parities in the low replacement scenario, compared with 1 to 5 parities in the high replacement scenarios. Sow replacement cost and salvage value had the greatest impact on optimal parity of replacement followed by revenues per piglet weaned. The discount rate and number of parities per year generally had little influence on optimal parity. For situations with high sow costs, low salvage values, and low revenues per piglet, the optimal parity at removal was as high as 6 to 10 parities, and for situations with low sow cost, high salvage values, and high revenues per piglet, the optimal parity at removal was as low as 1 to 2 parities depending on removal rates. The modified internal rate of return suggested that, for most LRNS and HRYS scenarios considered, investment in a swine breed-to-wean enterprise was favored over other investments involving a similar risk profile. Our results indicate that in US breeding herds, sows are culled on average near the optimal parity of 4. However, the optimization process should be a dynamic one that adapts to changes in replacement rates, salvage value, replacement cost, and revenues per piglet.

Considerable disagreement exists about the most appropriate characterization of farm-level yield distributions. Yet, the economic importance of alternate yield distribution specifications on insurance valuation, product designs and farm-level risk management has not been investigated or documented. The results of this study demonstrate that large differences in expected payments from popular crop insurance products can arise solely from the parameterization chosen to represent yields. The results suggest that the frequently unexamined yield distribution specification may lead to incorrect conclusions in important areas of insurance and risk management research such as policy rating, and assessment of expected payments from policies.

Farmers' decisions to purchase crop insurance and their choices among alternative products are analyzed using a two-stage estimation procedure. The influences of risk perceptions, competing risk management options, as well structural and demographic differences are evaluated. The likelihood for crop insurance usage is found to be higher for larger, older, less tenured, more highly leveraged farms, and by those with higher perceived yield risks. The marginal effects of size, age, perceived yield risk, perceived importance of risk management activities, and other structural and demographic variables are identified in terms of their influences on choices among alternative crop insurance products. Copyright 2004, Oxford University Press.

Utilizing survey data from corn and soybean farmers in the Midwest, this study assesses the relative importance of different features of crop insurance products. Conjoint analysis results indicate that farmers' preferences for flexibility dominate both type of insurance and coverage level. Revenue insurance demand is greater by those who are larger, younger, and farm in more separate locations. Results are significant and consistent by size, insurance usage, leverage, and risk perception. The results permit prediction of market shares of competing insurance products within specific producer segments, and thus also provide guidance for targeting specific producer groups with new product configurations. Copyright 2003, Oxford University Press.

Economic losses are incurred by the US livestock industries because farm animals are raised in locations and seasons where effective temperature conditions venture outside their zone of thermal comfort. The objective of this review was to estimate economic losses sustained by major US livestock industries from heat stress. Animal classes considered were: dairy cows, dairy heifers (0 to 1 yr and 1 to 2 yr), beef cows, finishing cattle, sows, market hogs, broilers, layers, and turkeys. Economic losses considered were: 1) decreased performance (feed intake, growth, milk, eggs), 2) increased mortality, and 3) decreased reproduction. USDA and industry data were used for monthly inventories of each animal class in each of the contiguous 48 states. Daily weather data from 257 weather stations over a range of 68 to 129 yr were used to estimate mean monthly maximum and minimum temperatures, relative humidity, and their variances and covariances for each state. Animal responses were modeled from literature data using a combination of maximum temperature-humidity index, daily duration of heat stress, and a heat load index. Monte Carlo techniques were used to simulate 1000 times the weather for each month of the year, for each animal class, for each state, and for each of four intensities of heat abatement (minimum, moderate, high, and intensive). Capital and operating costs were accounted for each heat abatement intensity. Without heat abatement (minimum intensity), total losses across animal classes averaged $2.4 billion annually. Optimum heat abatement intensity reduced annual total losses to $1.7 billion. Annual losses averaged $897million, $369million, $299million, and $128million for dairy, beef, swine, and poultry industries, respectively. Across states, Texas, California, Oklahoma, Nebraska, and North Carolina accounted for $728million of annual losses, or 43% of total national losses. Results point to a need for more energy and capital efficient heat abatement systems.

This study evaluates the impacts on gross revenue distributions of the use of alternative crop insurance products across different coverage levels and across locations with differing yield risks. Results are presented in terms of net costs, values‐at‐risk, and certainty equivalent returns associated with five types of multi‐peril crop insurance across different coverage levels. Findings show that the group policies often result in average payments exceeding their premium costs. Individual revenue products reduce risk in the tails more than group policies, but result in greater reductions in mean revenues. Rankings based on certainty equivalent returns and low frequency VaRs generally favor revenue products. As expected, crop insurance is associated with greater relative risk reduction in locations with greater underlying yield variability.

Purpose The purpose of this paper is to evaluate the risk management benefits provided by the supplemental coverage option (SCO) insurance plan which was created in the 2014 Farm Bill. Specifically, the marginal expected utility benefits are compared with the potential additional subsidy cost introduced by the new program for a stylized example of a corn producer. Design/methodology/approach The paper uses a stylized simulation model examines the preferred insurance program choice for a typical Midwestern corn farmer. The expected utility of the farmer is calculated under their preferred insurance program choice both with and without the availability of the SCO program, and compared to the case where crop insurance is not available. Scenarios are examined for a range of farmer risk aversion levels, different levels of correlation between farm-level and county-level corn yields, and case with and without insurance premium subsidies. Findings The SCO program is found to enter into the preferred insurance program choice for risk averse farmers. As risk aversion increases, farmers are estimated to prefer higher coverage levels for individual products along with SCO coverage. While the availability of existing crop insurance programs are shown to substantially increase the expected utility of farmers, the marginal impact of adding SCO to the crop insurance program is relatively small. Furthermore, the additional expected benefits generated by SCO are shown to include both risk management and expected return components. With subsidies removed, the estimated marginal benefits provided by SCO are reduced significantly. Practical implications The findings of this paper can help inform the policy debate for future farm bills as agricultural support programs continue to evolve. The results in this paper can also be used to help explain farm-level decision making related to crop insurance program choices. Originality/value This paper contributes to the literature by documenting a new, federally supported risk management programs made available to farmers in the 2014 Farm Bill and evaluates the marginal benefits the SCO program offers US crop producers.

During the past 25 years, regional distribution of U.S. milk production has changed as production in the South and West has grown. This changing regional distribution of production is often cited as a contributing factor to regional discord in the U.S. dairy industry (e.g., Blayney and Southard). The impact of various factors on the regional distribution of milk production has been analyzed. These factors include: federal milk marketing orders (McDowell; Schiek), federal price support policy (Hallberg et al.; McDowell), prices and associated elasticities of raw milk, milk products, and production inputs (Ruane and Hallberg; Batista; Chavas, Kraus, and Jesse; and Weersink and Howard), new technologies (Weersink and Tauer), and demand variables (Ruane and Hallberg). Each of these studies provides insight into the impact of one or two variables upon the changing regional distribution of U.S. milk production. However, without a common data base and analytical technique, it is difficult to compare the relative importance of supply, demand, and policy variables on regional distribution of U.S. milk production. Such a comparative analysis is the focus of this study. Results of this analysis should be of interest to milk producers, consumers, dairy product manufacturers, dairy cooperatives, and policy makers as they adjust to the changing regional distribution of milk production.

Empirical studies have noted that relatively small changes in farm management practices can significantly reduce emissions of agricultural effluents (Johnson, Adams, and Perry; Taylor, Adams, and Miller; Moxey and White). Farmers may voluntarily adopt these practices because they require few adjustments and have little or no cost. Total reliance on voluntary measures to control agricultural emissions, however, has been criticized because they are unable to lower emissions to acceptable levels (General Accounting Office; Malik, Larson, and Ribaudo). Hence, regulations such as emission standards, taxes on inputs, and taxes on estimated effluents have been suggested. One aim of these policies is to change farmers' management practices which would then lead to declines in emissions of

A national debate is occurring on whether to reduce and/or eliminate the programs that provide income deficiency payments to farmers. Participation in these programs is voluntary. Therefore, the impacts of downsizing the deficiency payment programs will be greatest for those farmers who currently participate. Past studies of farm program participation focused on the socioeconomic characteristics of

Throughout the U.S. dairy farm industry, observed rates of dairy cow replacement consistently exceed the rates prescribed as optimal by dairy economists. We attempt to uncover the causes of this discrepancy by estimating a series of dynamic discrete choice models of dairy cow replacement using historical farm-level data. We also advance the methods used to estimate dynamic discrete choice models by demonstrating how orthogonal polynomial projection methods can be effectively combined with standard maximum likelihood techniques to estimate structural models of dynamic decision-making. Copyright 1995 by John Wiley & Sons, Ltd.

We examined the efficiency of farm-to-plant milk collection in western Ohio. Results suggest that mileage reductions of 10% are possible by reordering farm stops while collecting loads of milk. A further 3% reduction is possible by moving dairy farms between loads. When examining efficiencies, guaranteed lowest mileage (GLM) and heuristic algorithms were used to generate schedules. Heuristic algorithms account for about 80% of the mileage reductions identified by GLM algorithms. GLM algorithms are computationally feasible for ordering farm stops while collecting milk loads. However, heuristic algorithms must be relied on for moving dairy farms between loads.

Multinomial logit models were used to examine farmers' information preferences for marketing, production, and financial decisions. Dependent variables represented the preferred information source category: Cooperative Extension Service, printed, broadcast, specialist, and other sources. Independent variables included farm and business characteristics. In general, farmers preferred information from printed sources, and the Cooperative Extension Service ranked highly as an information source. Results did not support the contention that farmers are substituting specialist services for information received from the Cooperative Extension Service.

mation sources, producers are expected to select Farm producers attempt to mitigate risk and uncer- those sources that yield the highest marginal tainty by utilizing accurate and reliable information. benefits. Hence, the objectives of this research were This research attempts to identify sources of infor- to (1) identify sources of information used by Ohio mation used by Ohio fruit producers and then deter- fruit producers and (2) determine which of these mine which of these sources are best meeting their sources are best meeting the information needs of information needs. Results are based on a logit these producers. These objectives were pursued analysis of Ohio fruit producers and several factors while controlling for differences in socioeconomic are shown to influence producers' evaluation of the factors among producers. These factors were con"adequacy" of their marketing information. Among trolled because they are likely to influence the usethese factors are age, business size, education, type fulness of information to respective users. Relevant of enterprise, and types of information sources. socioeconomic characteristics of information users Reported findings have implications for marketing are expected to include educational attainment, farm efficiency, particularly if producers' evaluation of size, attitudes toward growth and expansion, and information as adequate is positively related to its perception of the value of information. This latter efficient use. factor, user perception of the value of information, is a major focal point of this paper.

Although computer technologies have evolved rapidly, farmers have been slow to adopt these technologies. This research identifies factors influencing farmers' adoption of computers and the number and type of applications for which the computer is used. Ohio commercial farmers were randomly sampled and analyzed using multinomial logit techniques. Results suggest that older farmers are less likely to adopt computers, less likely to find them useful, and make fewer applications of the computer in their business. Education level is positively associated with computer adoption and with increased numbers of applications made of the computer.

Utilizing survey data from corn and soybean farmers in the Midwest, this study assess the relative importance of different features of crop insurance products. Conjoint analysis results indicate that farmers' preferences for flexibility dominate both type of insurance and coverage level. Revenue insurance demand is greater by those who are larger, younger, and farm in more separate locations. Results are significant and consistent by size, insurance usage, leverage, and risk perception. The results permit prediction of market shares of competing insurance products within specific producer segments, and thus also provide guidance for targeting specific producer groups with new product configurations.

The economics of raw milk assembly is examined. The hauling technology is described as a multiple output process with road miles and volume by weight hauled as the outputs produced by the hauling firms. A translogarithmic total cost function is estimated using survey data from the greater Ohio milk production region. The relative share of total cost is substantially lower for the volume hauled output relative to the distance driven outputs. Current hauling rate schedules strictly based on volume, or on volume per mile driven, substantially overcharge large volume dairy producers and under-charge small volume producers.

Multinominal logit regressions were used to analyze differences in farmer's accounting methods. Accounting methods differed by farm types, farm size, farmer education level, and accounting report uses. Farms using accounting reports for decisionmaking tended to have more complex accounting systems and produced more reports.

The objective of this research is to better understand the use of marketing information by cash grain farmers. In particular, factors which influence farmers' perceptions of the "adequacy" of their marketing information supply are examined. Statistical analyses of a random sample of Ohio cash grain farmers were employed in these evaluations. Radio broadcasts and general farm magazines were the two marketing information sources most frequently cited as useful. Highly formalized and marketing specific sources such as marketing consultants, commercial advisory newsletters and computerized information sources were cited relatively infrequently. Radio and television broadcasts were more frequently cited as the ‘most useful’ source of marketing information by older farmers and operators of small farms than by their counterparts. Marketing professionals were cited as ‘most useful’ more frequently by operators of larger farms and operators with at least some college education. A multivariate logit analysis was used to examine the joint effect of operator, farm and information source characteristics on information adequacy evaluations. The probability of an "adequate" evaluation was positively influenced by total farm information expenditure, the use of time-diversified marketing of grain from storage facilities, and the use of marketing consultants, brokers or commercial advisory newsletters as the primary source of marketing information.

Several economic and socioeconomic factors are identified which influence farmers' demand for information. Many information sources are identified and categorized into general and specialized classes. Relevant economic and socioeconomic factors which impact these classes of information demands are: (1) farm size, (2) farm ownership, (3) off-farm employment, (4) education, (5) innovativeness, (6) farm plans, and (7) farm enterprise type. A logit model is specified and estimated for each class of information and the results show major differences in the determinants of demand for general and specialized information. Results also show that information sources are generally ranked higher by larger farmers than by smaller farmers.

Trends in farm machinery use suggest the US farm machinery market is a replacement market. Moreover, since 1960, the price of machinery has risen relative to prices for other production inputs. Econometric analysis suggests that higher relative machinery prices encourage input substitution. Thus, relative price trends should be a major concern to the machinery industry. The analysis also suggests that demand for machinery is elastic, meaning that lower prices could produce higher gross sales. Last, annual machinery purchases by farmers will likely remain variable because factors influencing purchases are variable. Therefore, reducing factory and dealer inventories could produce lost sales.

Optimal planned replacement lactations (OPRLs) for dairy cows are determined under scenarios representing (1) a no tax situation, (2) the 1986 tax code, (3) the 1987 tax code when heifer raising costs are expensed and (4) the 1987 tax code when heifer raising costs are capitalized. Under each tax scenario, OPRLs are found when replacement heifers are raised and when replacement heifers are purchased. Taxes have impacts on OPRLs, particularly when replacement heifers are raised. When replacements are raised, results indicate that farmers selecting the capitalizing option should voluntarily replace cows later than farmers selecting the expensing option.