MARKET AND WELFARE EFFECTS OF MANDATORY COUNTRY-OF-ORIGIN LABELING IN THE US SPECIALTY CROPS SECTOR

This study provides a new framework of analysis of the market and welfare effects of mandatory country of origin labeling (MCOOL) for fruits and vegetables that accounts for heterogeneous consumer preferences for domestic products, differences in producer agronomic characteristics, and retailer market power when buying and selling these products. The market and welfare effects of MCOOL are shown to be case-specific and dependent on the labeling costs at the farm and retail levels, the strength of consumer preference for domestic products, the market power of retailers, the marketing margin along the supply chain, and the relative costs of imported and domestic products. Simulation results for the US markets of apples and tomatoes indicate that for the regulation to increase total economic welfare in these markets, the consumer demand after MCOOL would need to increase by 2.6% to 7.0% for domestic apples and by 8.2% to 22.4% for domestic tomatoes, depending on the market power of retailers and the size of the labeling costs.International Relations/Trade,

New Farm Bill, new safety net

The 2014 Farm Bill introduced several changes to the commodity programs available through the Farm Service Administration (FSA) and created a new insurance program to complement one commodity program through the Risk Management Agency (RMA).This article provides an overview of the new safety net available to Iowa crop farmers from 2014 to 2018, explains the timing of the decisions involved in selecting a farm program, and highlights the factors that affect program election through three numerical examples

Market and Welfare Effects of GMO Introduction in Small Exporting Countries

This paper analyzes the market and welfare effects of the introduction of GM products in small open developing economies that, prior to the adoption of GM crops, were net exporters of non-GM products. It explicitly accounts for differences in consumer attitudes towards GM products and producer agronomic characteristics as well as for the structure and conduct of the GM seed suppliers. Different scenarios concerning different labeling regimes in the small exporting country and the world market of the products are considered. A positive welfare effect of the introduction of GM products to small open economies should not be taken for granted. While yield increases and cost reductions associated with the GM technology are certainly important, their presence does not guarantee a positive effect on the welfare of all groups involved and/or on aggregate domestic welfare. The market and welfare effects of the introduction of GM crops in small exporting economies were shown to be case-specific and dependent on the labeling regimes in the world market, the labeling regime in the domestic market, the segregation costs and the marketing margins under the different labeling scenarios, the domestic consumer attitudes towards GM products, the premium enjoyed by the non-GM crops, the relative cost effectiveness of GM crops under the local production conditions, and the market power of the GM seed suppliers.Research and Development/Tech Change/Emerging Technologies, L150, Q130, Q170,

Declining Liquidity in Iowa Farms: 2014–2017

The goal of the present study is to describe the evolution of financial liquidity in Iowa farms for 2014–2017, using a unique panel of 220 mid-scale commercial farms. Farms with vulnerable liquidity ratings increased from 33.2 percent in December 2014 to 45.0 percent in December 2017. On average, farms lost $244 of working capital per acre over that period, but farms with vulnerable liquidity ratings in December 2017 lost almost 60 percent more than that, or$388. Average farm size, machinery investment per acre, farm net worth per acre, debt-to-asset ratio, and age of operator were not significantly different across liquidity-rating categories

What are financially strong farm operations doing differently?

This article distills the major findings from two studies of recent anonymous farm-level financial information from the Iowa Farm Business Association (IFBA). The first study gauges the extent of financial deterioration among Iowa farms between January 1, 2015 and January 1, 2016 (Plastina, 2016a). The second study identifies the factors associated with the capacity of farms to produce free cash flows to pay for family living expenses, cover depreciation, and re-invest in the farm business (Plastina 2016b)