THE CHINESE MARKET FOR U.S. PORK EXPORTS

China feeds twenty-two percent of the world's population on seven percent of its arable land. In contrast, the U.S. and Canada own seventeen percent of the world's arable land, but feed only five percent of its people. As China's income increases, its people will demand more livestock products, including poultry, dairy, beef, and eggs, and more alcohol. Potential Chinese import demand for pork is examined in this paper. The question facing Chinese policymakers is whether to follow their current policy of food self-sufficiency or allow imports of pork muscle and variety meats. Projections of Chinese production and consumption indicate that, by the year 2007, China could import up to 9.1 million metric tons (product weight equivalent) of pork. The current Chinese government is very opposed to food imports of any kind. However, China has applied for entry into the World Trade Organization. Negotiations on China's entry could include access to China's pork market, and it is most likely that access could be gained to the variety meat market. The implications of two opposing scenarios are examined in this paper: first, China continues its policy of self-sufficiency; or second, China allows imports of pork variety meats. Self-Sufficiency Scenario: The anticipated increase in livestock production will cause feed grain consumption in China to increase more rapidly than production. Once China becomes a permanent net importer of feed grains, its prices will rise to reflect world feed grain prices plus transportation costs. This development will make China's pork products more expensive than imports. This simple line of argument means that China is about to modernize and expand the world's largest pork industry in the wrong place. Expanding pork production in China instead of allowing imports from efficient producers will cause an enormous misallocation of world resources. The Chinese people would benefit more if China concentrated on labor intensive crops and allowed for the free importation of livestock products. Import Access Scenario: Where the pork market is concerned, U.S. and Chinese consumers complement each other. Chinese people like variety meats, whereas U.S. consumers prefer pork muscle meats. Because of its dominance in the world market, China would be able to determine world prices if it allowed free importation of variety meats. The drop credit, which is the value of the pork variety package, is estimated to increase by 45 percent. However, the increase in the value of the pork variety package would not imply an increase in prices in the U.S. domestic market which largely consumes pork muscle meats. Implications for U.S. Producers: Even if China does not allow imports of pork, U.S. producers will still benefit from increased Chinese demand. Due to projected increased consumption over the next ten years, it is likely that China will stop exporting its current level of 150,000 to 200,000 tons of pork muscle meat. If China does allow free importation of pork variety meats, the increased value of the U.S. drop credit would add $4.72 to the value of each hog carcass or about$1.90 per hundredweight. For the U.S. pork industry, the net annual benefit of access to the Chinese market would be approximately $300 million per year. Hayes argues that opening this market may be feasible as part of negotiations over China's entry to the World Trade Organization. Regardless of how Chinese pork market policy evolves, the demand for U.S. feed grain will increase, causing some movement of land in the U.S. from wheat production into feed grain production.China trade, livestock, feedgrains, meat, International Relations/Trade, F1,

In-situ and remote monitoring of environmental water quality

Environmental water pollution affects human health and reduces the quality of our natural water ecosystems and resources. As a result, there is great interest in monitoring water quality and ensuring that all areas are compliant with legislation. Ubiquitous water quality monitoring places considerable demands upon existing sensing technology. The combined challenges of system longevity, autonomous operation, robustness, large-scale sensor networks, operationally difficult deployments and unpredictable and lossy environments collectively represents a technological barrier that has yet to be overcome[1]. Ubiquitous sensing envisages many aspects of our environment being routinely sensed. This will result in data streams from a large variety of heterogeneous sources, which will often vary in their volume and accuracy. The challenge is to develop a networked sensing infrastructure that can support the effective capture, filtering, aggregation and analysis of such data. This will ultimately enable us to dynamically monitor and track the quality of our environment at multiple locations. Microfluidic technology provides a route to the development of miniaturised analytical instruments that could be deployed remotely, and operate autonomously over relatively long periods of time (months–years). An example of such a system is the autonomous phosphate sensor[2] which has been developed at the CLARITY Centre, in Dublin City University. This technology, in combination with the availability of low power, reliable wireless communications platforms that can link sensors and analytical devices to online databases and servers, form the basis for extensive networks of autonomous analytical ‘stations’ or ‘nodes’ that will provide high quality information about key chemical parameters that determine the quality of our aquatic environment. The system must also have sufficient intelligence to enable adaptive sampling regimes as well as accurate and efficient decision-making responses. A particularly exciting area of development is the combination of remote satellite/aircraft based monitoring with the in-situ ground-based monitoring described above. Remote observations from satellites and aircraft can provide significant amounts of information on the state of the aquatic environment over large areas. As in-situ deployments of sensor networks become more widespread and reliable, and satellite data becomes more widely available, information from each of these sources can complement and validate the other, leading to an increased ability to rapidly detect potentially harmful events, and to assess the impact of environmental pressures on scales ranging from small river catchments to the open ocean. In this paper, we will assess the current status of these approaches, and the challenges that must be met in order to realise the vision of true internet- or global-scale monitoring of our environment. References: [1] Integration of analytical measurements and wireless communications – Current issues and future strategies. King Tong Lau, Sarah Brady, John Cleary and Dermot Diamond, Talanta 75 (2008) 606–612. [2] An autonomous microfluidic sensor for phosphate: on-site analysis of treated wastewater. John Cleary, Conor Slater, Christina McGraw and Dermot Diamond, IEEE Sensors Journal, 8 (2008) 508-515

Impact of Ethanol Production on U.S. and Regional Gasoline Prices and On the Profitability of U.S. Oil Refinery Industry

Using pooled regional time-series data and panel data estimation, we quantify the impact of monthly ethanol production on monthly retail regular gasoline prices. This analysis suggests that the growth in ethanol production has caused retail gasoline prices to be $0.29 to$0.40 per gallon lower than would otherwise have been the case. The analysis shows that the negative impact of ethanol on gasoline prices varies considerably across regions. The Midwest region has the biggest impact, at $0.39/gallon, while the Rocky Mountain region had the smallest impact, at$0.17/gallon. The results also indicate that ethanol production has significantly reduced the profit margin of the oil refinery industry. The results are robust with respect to alternative model specifications.crack spread, crude oil prices, ethanol, gasoline prices, Resource /Energy Economics and Policy,

Yield and Area Elasticities. A Cost Function Approach with Uncertainty

This paper develops a method to jointly estimate crop yield elasticities and area elasticities with respect to output prices based on a theoretically consistent model. The model uses a duality theory approach for the multi-output and multi-input firm, and introduces uncertainty in the level of target output which conditions the cost minimization problem, in the output prices and in the conditional input demand functions. The underlying production technology is conditioned on fixed inputs, both allocatable and non-allocatable. Up to our knowledge, there have been no theoretical developments of this type of models for multioutput technologies. Our approach is also novel because no previous model of this type has introduced the effects of allocatable fixed inputs. We provide an empirical application of this theoretical framework using State-level data and approximating the dual cost function by a normalized quadratic flexible functional form. We derive expressions for the elasticities of interest conditional on the function specification assumed.yield elasticities, area elasticities, duality theory, cost function, uncertainty, Production Economics,

Empirical Minimum-Variance Hedge (The)

Decision making under unknown true parameters (estimation risk) is discussed along with Bayes' and parameter certainty equivalent (PCE) criteria. Bayes' criterion incorporates estimation risk in a manner consistent with expected utility maximization. The PCE method, which is the most commonly used, is not consistent with expected utility maximization. Bayes' criterion is employed to solve for the minimum-variance hedge ratio. Empirical application of Bayes' minimum-variance hedge ratio is addressed and illustrated. Simulations show that discrepancies between prior and sample parameters may lead to substantial differences between Bayesian and PCE minimum-variance hedges.

LAND ALLOCATION IN THE PRESENCE OF ESTIMATION RISK

Estimation risk occurs when parameters relevant for decision making are uncertain. Bayes'Â’ criterion is consistent with expected-utility maximization in the presence of estimation risk. This article examines optimal (BayesÂ’') land allocations and land allocations obtained using the traditional plug-in approach and two alternative decision rules. BayesÂ’' allocations are much better economically than the other allocations when there are few sample observations relative to activities. Calculation of certainty equivalent returns (CERs) with estimation risk is also discussed and illustrated. CERs are typically (and incorrectly) calculated with the plug-in approach. Plug-in CERs may be extremely misleading.Land Economics/Use,

Experimental Methods in Consumer Preference Studies

Controlled experimental auctions can be used to elicit preferences for food products. We describe results from two series of experiments in which subjects revealed their willingness-to-pay for safer food. In one series, the risk reduction technology was not specified; in the other, it was identified as food irradiation. The results provide some evidence on the acceptability of food irradiation as a risk reduction technology

U.S. FARM POLICY AND THE VARIABILITY OF COMMODITY PRICES AND FARM REVENUES

A dynamic three-commodity rational-expectations storage model is used to compare the impact of the Federal Agricultural Improvement and Reform (FAIR) Act of 1996 with a free-market policy, and with the agricultural policies that preceded the FAIR Act. Results support the hypothesis that the changes enacted by FAIR did not lead to permanent significant increases in the volatility of farm prices or revenues. An important finding is that the main economic impacts of the pre-FAIR scenario, relative to the free-market regime, were to transfer income to farmers and to substitute government storage for private storage in a way that did little to support prices or to stabilize farm incomes.FAIR Act, price volatility, storage, Agricultural and Food Policy,

The Trade-off Between Bioenergy and Emissions When Land Is Scarce

Agricultural biofuels require the use of scarce land, and this land has opportunity cost. We explore the objective function of a social planner who includes a land constraint in the optimization decision to minimize environmental cost. The results show that emissions should be measured on a per acre basis. Conventional agricultural life cycle assessments for biofuels report carbon emissions on a per gallon basis, thereby ignoring the implications of land scarcity and implicitly assuming an infinite supply of the inputs needed for production. Switchgrass and corn are then modeled as competing alternatives to show how the inclusion of a land constraint can influence life cycle rankings and alter policy conclusions.biofuels, biomass, energy policy, land use, life cycle analysis, Agricultural and Food Policy, Environmental Economics and Policy, Q16, Q48, Q58,