An Assessment of Economic Considerations for Industrial Hemp Production

United States farm policy and programs are governed by the Farm Bill. The 2014 Farm Bill allows for the legal production and research of industrial hemp as long as it meets the standards outlined in the Farm Bill. Although it has a wide range of uses (upwards of 25,000 products use hemp), there is a lack of recent information regarding the economic feasibility of hemp production for the private agricultural sector. Through an extensive search of existing literature, information was gathered to construct an enterprise budget for industrial hemp. Data from the enterprise budget were used in a constrained linear programming model to compare how introducing industrial hemp production could change crop allocations in all 75 counties of Arkansas When industrial hemp was introduced, the total number of acres farmed increased by 2.8% to 4.4%, the statewide profit increased by 0.3% to 18.2%, and rice was the only crop that increased in acreage by 5%. While these results suggest that industrial hemp may be an economically promising crop, there are still hurdles to overcome. The lack of clearance (permitting) by the Drug Enforcement Agency and the absence of hemp processing facilities in the United States are clear roadblocks to hemp production. Once permitting hurdles are overcome, additional research will be needed to identify optimal locations for processing facilities and target markets for hemp goods

Marketing Tips for Small-scale, Local Honey Bee Keepers in Northwest Arkansas

The objective of this thesis was to gain market information for beekeepers regarding different honey bee products and to provide information about economic feasibility when produced on a small, local scale. Since cost-of-production information about operating an apiary is widely available, the focus of this work was on gaining marketing knowledge. One of the objectives of the surveys was to develop a better sense of what potential resellers of honey bee products considered locally produced. Another objective was to determine preferences for honey bee product packaging as well as bee pollination services. Using that feedback, a marketing plan for different niche markets can be developed for part-time beekeeping operations. The survey results pertaining to local retailers and end users in Northwest Arkansas in 2016 suggested a supply radius near 100 miles and a preference for small packaging in general. Least cost supply, and at least regional brand recognition were not deemed as important as ensuring locally sourced products that can be sold at a premium. Different niche markets revealed both similar and different priorities related to these marketing aspects

Production Practices of Arkansas Beef Cattle Producers

This report contains information from a 1996 survey on production practices of Arkansas beef cattle producers. While several studies have been completed on the profitability of retained ownership of beef cattle, few empirical data are available on production practices of cow/calf and stocker operations in Arkansas. This report shows that there are some differences in production methods across operation types. Further, the report summarizes demographic characteristics of Arkansas cow/calf and stocker operations. The results of this study can be particularly helpful in providing the needed data for studying the potential economic impact of feeding weaned calves to heavier weights in Arkansas as a value-added production alternative to selling calves at weaning. It should also prove helpful in the formulation of budgets and simulation models

Modeling the Effects of Cap and Trade and a Carbon Offset Policy on Crop Allocations and Farm Income

A static, producer profit maximization framework is used to capture county level land use choice on the basis of profitability, greenhouse gas (GHG) emissions to the farm gate as well as soil carbon sequestration as affected by tillage and soil type. Policy scenarios of a 5% GHG cap on agricultural emissions in conjunction with a carbon offset payment system, designed to provide producer payments for net carbon footprint (GHG emissions – soil carbon sequestration) reductions compared to a baseline are evaluated to determine potential changes to land use and or producer income as a result of different policy scenarios. Results suggest that a policy solely targeted at emissions can be counterproductive in the sense that acreage reductions of more input-intensive crops also lead to soil carbon sequestration reductions. Producer income effects are largely negative unless carbon prices reach nearly $100 per ton.Cap and Trade, Carbon Sequestration, GHG Emissions, Agriculture, Agricultural and Food Policy, Environmental Economics and Policy, Q50, Q58, Q54,

Economic Evaluation of Soybean Fungicide Seed Treatments

The effect of nine different fungicide seed treatments for soybeans were tested from 2004 to 2007 at Keiser, Stuttgart, and Hope, Arkansas. While seedling emergence was effective across all treatments, only three treatments showed statistically significant differences in partial returns, defined as gross revenue minus seed and seed treatment costs. Comparisons of the regret a producer would experience as a result of non-optimal seed treatment suggested that broad spectrum seed treatment could enhance profitability by an average of $32 per acre with similar treatment recommendations across a range of seeding rates, output prices and study conditions.Crop Production/Industries, Production Economics,

SPATIAL YIELD RISK ISSUES: COMPARING YIELD RISK ACROSS REGION, CROP AND AGGREGATION METHOD

Crop yield risk analysis is difficult since historic field level yields are often not available. Spatially aggregated yield data are available, however, but aggregation distortion for farm level analysis may exist. This paper addresses how much aggregation distortion to expect and offers some adjustment solutions across crops and production regions.Risk and Uncertainty,

Hedging Break-Even Biodiesel Production Costs Using Soybean Oil Futures

The effectiveness of hedging volatile input prices for biodiesel producers is examined over one- to eight-week time horizons. Results reveal that hedging break-even soybean costs with soybean oil futures offers significant reductions in input price risk. The degree of risk reduction is dependent upon type of hedge, naïve or risk-minimizing, and upon time horizon. In contrast, cross-hedging break-even poultry fat costs with soybean oil futures failed to reduce input price risk.biodiesel, hedging, poultry fat, soybean oil, Agribusiness, Demand and Price Analysis, Environmental Economics and Policy,

How A Cap-and-Trade Policy of Green House Gases Could Alter the Face of Agriculture in the South: A Spatial and Production Level Analysis.

With the Waxman-Markey Bill passing the House and the Obama administration’s push to reduce carbon emissions, the likelihood of the implementation of some form of a carbon policy is increasing. This study estimates the greenhouse gas (GHG) emissions of the six largest crops produced in Arkansas using 63 different production practices as documented by University of Arkansas Cooperative Extension Service. From these GHG estimates a baseline state “carbon footprint” was estimated and a hypothetical cap-and-trade carbon reduction of 5, 10, and 20% was levied on Arkansas agriculture. Results show that while a modest reduction in GHG emissions (5%) would only affect crop allocations amongst certain crops while marginally reducing state net returns, a 20% reduction would cause major cropping pattern shifts with some traditional row crops nearly disappearing.Cap-and-Trade, carbon, sustainability, Agricultural and Food Policy, Environmental Economics and Policy, Q28, Q52, Q54, Q56,

The Impact of Reducing Greenhouse Gas Emissions in Crop Agriculture: A Spatial- and Production-Level Analysis

With the Waxman-Markey Bill passing the House and the administration’s push to reduce carbon emissions, the likelihood of the implementation of some form of a carbon emissions policy is increasing. This study estimates the greenhouse gas (GHG) emissions of the six largest row crops produced in Arkansas using 57 different production practices predominantly used and documented by the University of Arkansas Cooperative Extension Service. From these GHG emission estimates, a baseline state “carbon footprint†was estimated and a hypothetical GHG emissions reduction of 5, 10, and 20 percent was levied on Arkansas agriculture using a cap-and-trade method. Using current production technology and traditional land use choices, results show that the trading of carbon-emitting permits to reduce statewide GHG emissions by 5 percent from the baseline would enhance GHG emissions efficiency measured as net crop farm income generated per unit of carbon emissions created. The 5 percent reduction in GHG emissions does cause marginal reductions in acres farmed and has marginal income ramifications. Beyond the 5 percent reduction target, gains in GHG emissions efficiency decline but remain positive in most counties through the 10 percent GHG reduction target. However, with a 10 percent GHG reduction, acreage and income reductions more than double compared to the 5 percent level. When GHG emissions are reduced by 20 percent from the baseline, the result is a major cropping pattern shift coupled with significant reductions in traditional row crop acreage, income, and GHG emissions efficiency.greenhouse gas emissions, carbon equivalents, sustainability, cap and trade, Environmental Economics and Policy, Resource /Energy Economics and Policy,