The Effect of Changing Input and Product Prices on the Demand for Irrigation Water in Texas

Agriculture is a major income-producing sector in the Texas economy and a large part of this economic activity originates in irrigated crop production. For example, in 1973, 50% of all grain sorghum and 46% of all cotton in Texas were produced on irrigated acreage [Texas Crop and Livestock Reporting Service]. These two crops alone produced 26% of the cash receipts from the sale of Texas farm commodities in 1973 [Texas Crop and Livestock Reporting Service]. There are several other crops in Texas including vegetables which generate significant levels of income and rely heavily on irrigation. Further there are several associated industries which rely on production from irrigated agriculture, such as the cattle feeding industry in the Texas Panhandle. It is evident from this rather cursory examination of statistics that irrigation plays a large role in Texas agriculture. Both producers and policy-makers have found themselves faced in the past two years with many uncertainties. The U.S., plagued in the past with surplus production and supply control problems, now finds itself in a world shortage of food products. The long range signals seem to call for increased production, yet the policy-maker faces decisions concerning not only how to increase production, but more basically, how to maintain current levels of production. Groundwater resources in many areas are being diminished and annual irrigation water supplies fully committed in other areas. Long run planning for Texas agriculture requires that interbasin transfers of water be evaluated. Texas holds a position of prominence in the production of U.S. food and fiber products, and the evaluation of these alternatives has implications not only for Texas, but for the U.S. and possibly the world. To objectively evaluate water transfer proposals, it is necessary that the value of irrigation water in different regions of Texas be established. The producer faces the same call for maintaining or increasing production as the policy-maker, but he does so with many uncertainties which often have not disturbed the policy-maker in evaluating alternatives. Product prices have risen and fallen at an unprecedented rate while input prices have steadily risen at rates which preclude realistic budgeting. For example, during the recent energy crisis, the prices of fuel and fertilizer have more than doubled. These variable input and product prices weigh heavily upon production decisions by the producer, and likewise must receive serious consideration in evaluation of resource allocation alternatives by policy-makers. The demand for irrigation water is derived from the production of crops and any change in production patterns, input prices or availability, and product prices directly affects this demand. Current and future water resources planning requires an estimate of the various quantities of water which will be used for irrigation under differing assumptions concerning price of water, other input prices, and product prices. Of particular importance are shifts in cropping patterns, changes in level of agricultural production and net effect on producers income. Since many policy decisions are made in relatively short periods of time, there is an urgent need for a capability to evaluate alternative policies and change input or product prices in a timely fashion

Establishing Crop Acreage Flexibility Restraints for Subregions of the Texas High Plains

Cropping pattern shifts in many aggregate linear programming (LP) models need to be constrained due to institutional, marketing machinery, and price uncertainty factors. The purpose of this study was to estimate constraints which are referred to as flexibility restraints for major crop acreages in subregions of the Texas High Plains for use in a LP model that was developed to derive water and other input demand. Alternative estimating models for establishing acreage flexibility restraints were developed using methodology and model formulation presented in the literature. The results of these models in estimating flexibility restraints were evaluated using statistical measures and subjective analysis. Models which were analyzed ranged from a simple linear regression model in which the current year's acreage is expressed as a function of last year's acreage to a multiple regression model in which economic and climatological variables were considered. The multiple regression model as formulated and estimated did not provide satisfactory results. However, as in many of the earlier studies the simpler models did provide acceptable performance. From among the simpler models one was selected based on statistical measures and a prioria expectations. The model was used to calculate crop acreage flexibility restraints for three subregions of the Texas High Plains

Economic Effect on Agricultural Production of Alternative Energy Input Prices: Texas High Plains

The Arab oil embargo of 1973 awakened the world to the reality of energy shortages and higher fuel prices. Agriculture in the United States is highly mechanized and thus energy intensive. This study seeks to develop an evaluative capability to readily determine the short-run effect of rising energy prices on agricultural production. The results are measured in terms of demand schedules for each input investigated, net revenue adjustments, cropping pattern shifts, and changes in agricultural output. The High Plains of Texas was selected as a study area due to the heterogeneous nature of agricultural production in the region and highly energy intensive methods of production employed. The region is associated with a diversity in crops and production practices as well as a high degree of mechanization and irrigation, which means agriculture is very dependent upon energy inputs and, in turn, is significantly affected by energy price changes. The study area was defined by the Texas Agricultural Extension subregions of High Plains II, High Plains III, and High Plains IV. The crops chosen for study were cotton, grain sorghum, wheat, corn, and soybeans. The energy and energy-related inputs under investigation were diesel, herbicide, natural gas, nitrogen fertilizer, and water. Mathematical linear programming was used as the analytical technique with parametric programming techniques incorporated into the LP model to evaluate effect of varying input price parameters over a specified range. Thus, demand schedules were estimated. The objective function was constructed using variable costs only; no fixed costs are considered. Therefore, the objective function maximizes net revenue above variable costs and thus limits the study to the short run. The data bases for the model were crop enterprise budgets developed by the Texas Agricultural Extension Service. These budgets were modified to adapt them to the study. Particularly important was the substitution of owner-operated harvesting equipment for custom-harvesting costs. This procedure made possible the delineation of fuel use by crop and production alternative which was necessary information in the accounting of costs. The completed LP model was applied to 16 alternative situations made up of various input and product price combinations which are considered as feasible in the short run future. The results reveal that diesel consumption would change very little in the short run unless commodity prices simultaneously decline below the lowest prices since 1971 or unless diesel price approaches $2.00 per gallon. Under average commodity price conditions, natural gas consumption would not decline appreciably until the price rose above$4.00 per 1000 cubic feet (mcf). Even when using the least product prices since 1971, natural gas would be consumed in substantial amounts as long as the price was below $1.28 per Mcf. The findings regarding nitrogen indicate that present nitrogen prices are within a critical range such that consumption would be immediately affected by nitrogen price increases. Water price was considered as the price a farmer can afford to pay for water above pumping and distribution costs. Application of water was defined as the price that would be paid for imported water. Under average commodity price conditions, the study results show that as water price rises from zero dollars to$22 per acre foot there would be less than a 4 percent reduction in consumption. However, as the price continues to rise, consumption would decline dramatically reaching zero at a water price of $71.75 per acre foot. This study indicates that rising input prices would cause acreage shifts from irrigated to dryland; however, with average commodity prices, these shifts do not occur until diesel reaches$2.69 per gallon, or natural gas sells for $1.92 per Mcf, or nitrogen price is$.41 per pound, or water price reaches $14.69 per acre foot. In general, the first crops that would shift out of production as energy input prices rise would be grain sorghum and corn. Cotton does not appear to be significantly affected by feasible near future energy price rises; while wheat was found to increase in production as fuel costs increase. Whereas rising energy prices mildly affect consumption of inputs, cropping shifts, and output, they significantly impact on net revenue to the farmer. With average product prices, the results indicate that farmers' net income above variable cost approach$500 million at present diesel prices ($.40 per gallon). A doubling of diesel price to$.81 per gallon would cost the farmer $79 million in net revenue, and a price rise to$1.86 per gallon would cost $254 million in farmer net revenue. The results of natural gas, nitrogen, and water are similar to diesel in that the increased cost of the input directly reduces net revenue. Throughout the analysis, commodity prices were shown to be more consequential to agricultural production and farmer welfare than are energy input prices. A synoptic statement of the findings is as follows: in the short run future assuming average prices for commodities, farmers in the Texas High Plains will continue to produce at present levels according to established cropping patterns unless diesel reaches a$2.00 per gallon price range, or natural gas price approaches $4.00 per Mcf, or nitrogen sells for around$.40 per pound. Furthermore, the importation of water is feasible only if its cost can be kept well below $70 per acre foot

A Model for Estimating Demand for Irrigation Water on the Texas High Plains

With rapidly changing conditions in production agriculture, the need for highly flexible and quickly applicable methods of analysis is emphasized. The purpose of this study was to develop such a model for a homogeneous production region in the Texas High Plains. A linear programming model was constructed whereby crop or input prices are readily adjustable. In addition, limitations on quantities of inputs available can easily be evaluated. The model contains cotton, grain sorghum, corn, wheat and soybeans. Inputs that can be evaluated include irrigation water, natural gas, diesel, nitrogen fertilizer and herbicides. The primary focus of this work was to estimate the demand for irrigation water in the study area. The model was applied using alternative crop prices and input prices. Assuming average crop prices, current input prices and only variable costs of production, as the price of water was increased wheat shifted from irrigated to dryland production, then grain sorghum, cotton, corn and soybeans, in that order. The price of water was $71.75 per acre foot plus current pumping cost when all land shifted to dryland production. The same analysis, except variable and fixed costs both included, gave similar results relative to the sequence of crops that shift to dryland production as the price of water was increased. However, the shifts occurred at much lower water prices; i.e., at$24.47 per acre foot plus current pumping costs, all land had shifted to dryland production. This suggests that over the long run, irrigation in the Texas High Plains is quite sensitive to the price of energy used in pumping water. Further, there are strong implications relative to farmer's "ability to pay" for water imported to the High Plains from other regions. In this report, several scenarios including low, high and average crop prices and average and high input prices were evaluated

An Economic Feasibility Study of Irrigated Crop Production in the Pecos Valley of Texas

Public concern over the potential effects of energy price increases on the U.S. food and fiber system has been dramatically justified in the Trans Pecos region of Texas where a 450 percent increase in the price of natural gas was followed by the idling of thousands of irrigated acres and the departure of many of the farmers. This study was conducted to provide the answers to two questions: (l) Can an irrigated farm survive in the Trans Pecos? and (2) If it survives, how profitable will it be? Coyanosa, one of the irrigated areas of the Trans Pecos, was selected as a study area, and the St. Lawrence area of the Edwards Plateau was selected to provide comparative estimates of survival and profitability. A modified MOTAD linear programming-simulation model was developed to generate estimates of survival and profitability by recursive simulation of multiple time periods, as follows: (l) development of a farm plan, (2) generation of stochastic prices and yields, (3) simulation and evaluation of the farm plan in operation, and (4) update of the planning situation to reflect adjustments in expected prices, expected yields, and credit restrictions. The model then returns to step l for simulation of the next time period. The model was applied to the Coyanosa and St. Lawrence regions under alternative future scenarios for inflation rates, energy prices, crop prices, and interest rates. The Coyanosa model was also applied under most likely scenario conditions to analyze the effects of alternative levels of risk-aversion and alternative tenure situations. Each application included 20 simulations of a 1O year planning horizon to develop a distribution of outcome. The Coyanosa farm survived about 8 years under the optimistic scenario and 5 years under all other scenarios. The most likely rate of survival was 20-30 percent with a range of 1O percent to 65 percent for other scenarios. The average life and rate of survival was higher for the St. Lawrence farm under all scenarios. The internal rate of return on equity capital for the Coyanosa farm was 36.8 percent under the optimistic scenario and negative under all other scenarios. The rate of return for St. Lawrence was not significantly different for the optimistic scenario; however, it was higher than Coyanosa for all other scenarios. The level of risk-aversion described by the baseline model appears to be relatively high compared to other studies, but there are indications that it may be relatively low for the St. Lawrence area. Both rate of return and survival increased in response to decreased levels of risk-aversion, however, the latter result may be related to the specification of the risk restraint. Land purchase provided higher estimates of survival and profitability than rental or combined rental and purchase. These results seem to relate to the finding that traditional crop share rental arrangements are unsatisfactory for the Coyanosa area. It was concluded from this study that (l) survival and profitability of irrigated crop production in the Coyanosa area will depend greatly upon future levels of inflation, energy prices, crop prices, and interest rates, (2) survival and profitability for Coyanosa will most likely be lower than St. Lawrence, and (3) land purchase provides greater potential survival and profitability than traditional crop share rental arrangements. These conclusions were limited by need for additional research regarding the effects of beginning equity levels and consideration of risk in farm planning. Conclusions were also limited by the data and assumptions utilized in the study

The Impact of Energy Shortage and Cost on Irrigation for the High Plains and Trans Pecos Regions of Texas

The High Plains and Trans Pecos regions of Texas are semi-arid crop production regions located in the western part of the state. Relatively low levels of rainfall are supplemented by irrigation from groundwater supplies. These regions produced 51 percent of the cotton, 42 percent of the grain sorghum, and 48 percent of the wheat produced in Texas in 1974 (Texas Crop and Livestock Reporting Service). Considering only irrigated production these percentages were 75, 85, and 91 percent of Texas irrigated crop production for cotton, grain sorghum and wheat respectively. The importance of the High Plains and Trans Pecos regions to Texas crop production are not limited to these three crops, however, these statistics do serve to illustrate the significance of these regions in the Texas agricultural economy. While it is easily seen that the majority of irrigated production (for the crops mentioned) in Texas occurs in these regions, it should be noted that the importance of irrigation in the High Plains and Trans Pecos regional economies is much greater than these statistics show. On the High Plains 86 percent of the cotton, 90 percent of the grain sorghum, and 75 percent of the wheat produced in 1974 was harvested from irrigated acreage. Rainfall is somewhat less in the Trans Pecos region and 100 percent of the production of these crops was under irrigation (Texas Crop and Livestock Reporting Service). More than 60 percent of the value of agricultural crops in Texas is produced on irrigated land (Knutson, et.al.). Thus, the crop production of these regions is vitally important to the Texas and respective regional economies. Crop yields are heavily dependent on groundwater irrigation and extremely sensitive to any factor which may affect the availability or cost of irrigation water. Availability and price of fuel used in pumping groundwater are the critical factors which directly affect the availability and cost of irrigation water. About 39 percent of the energy used in Texas agriculture in 1973 was utilized in pumping water, compared to 18 percent used in machinery operations. Of this irrigation fuel, 76 percent was natural gas, the majority of which was consumed in the High Plains (Coble and LePori). Current supplies and reserves of natural gas have reached critically low levels in recent years and producers in the High Plains and Trans Pecos regions are faced with possible curtailments of, and certain price increases for their irrigation fuel (Patton and Lacewell). The threat of possible curtailment of fuel supplies during the irrigation season imposes greatly increased risk to irrigated crop production since curtailment of natural gas supplies during a critical water use period would significantly reduce yields (Lacewell). This threat would also increase financial risk and restrict availability of credit. Continued price increases for natural gas will increase costs of pumping irrigation water and hence the costs of irrigated crop production (Patton and Lacewell). The Ogalalla aquifer underlying the High Plains and many of the alluvium aquifers underlying the Trans Pecos are exhaustible; i.e., there is a negligible recharge from percolation and other sources. Therefore, even with unchanged natural gas prices, these groundwater supplies are being "economically" exhausted over time as pumping depth increases. Increases in fuel prices will lead to reduced groundwater pumpage and result in less groundwater being economically recoverable. Although life of the physical supply will be exhausted, a greater quantity of groundwater will be economically unrecoverable for irrigation without significant product price increases

A Randomised Trial Comparing Genotypic and Virtual Phenotypic Interpretation of HIV Drug Resistance: The CREST Study

OBJECTIVES: The aim of this study was to compare the efficacy of different HIV drug resistance test reports (genotype and virtual phenotype) in patients who were changing their antiretroviral therapy (ART). DESIGN: Randomised, open-label trial with 48-week followup. SETTING: The study was conducted in a network of primary healthcare sites in Australia and New Zealand. PARTICIPANTS: Patients failing current ART with plasma HIV RNA > 2000 copies/mL who wished to change their current ART were eligible. Subjects were required to be > 18 years of age, previously treated with ART, have no intercurrent illnesses requiring active therapy, and to have provided written informed consent. INTERVENTIONS: Eligible subjects were randomly assigned to receive a genotype (group A) or genotype plus virtual phenotype (group B) prior to selection of their new antiretroviral regimen. OUTCOME MEASURES: Patient groups were compared for patterns of ART selection and surrogate outcomes (plasma viral load and CD4 counts) on an intention-to-treat basis over a 48-week period. RESULTS: Three hundred and twenty seven patients completing > one month of followup were included in these analyses. Resistance tests were the primary means by which ART regimens were selected (group A: 64%, group B: 62%; p = 0.32). At 48 weeks, there were no significant differences between the groups for mean change from baseline plasma HIV RNA (group A: 0.68 log copies/mL, group B: 0.58 log copies/mL; p = 0.23) and mean change from baseline CD4+ cell count (group A: 37 cells/mm(3), group B: 50 cells/mm(3); p = 0.28). CONCLUSIONS: In the absence of clear demonstrated benefits arising from the use of the virtual phenotype interpretation, this study suggests resistance testing using genotyping linked to a reliable interpretive algorithm is adequate for the management of HIV infection

Violent Deaths of Iraqi Civilians, 2003–2008: Analysis by Perpetrator, Weapon, Time, and Location

Madelyn Hsiao-Rei Hicks and colleagues provide a detailed analysis of Iraqi civilian violent deaths during 2003-2008 of the Iraq war and show that of 92,614 deaths, unknown perpetrators caused 74% of deaths, Coalition forces 12%, and Anti-Coalition forces 11%