The Effect of the El Nino Southern Oscillation on U.S. Corn Production and Downside Risk

El Nino Southern Oscillation (ENSO) teleconnections imply anomalous weather conditions around the globe, causing yield shortages, price changes, and even civil unrests. Extreme ENSO events may cause catastrophic damages to crop yields, thus amplifying downside risk for producers. This study presents a framework for quantifying the effects of climate on crop yield distributions. An empirical application provides estimates of the effect that ENSO events have on the means of U.S. county-level corn yield distributions, as well as the probabilities of catastrophic crop loss. Our findings demonstrate that ENSO events strongly influence these probabilities systematically over large production regions, which has important implications for research and policy analysis in the production, risk management, climate change, and civil unrest literatures.Climate, El Nino Southern Oscillation, Maximum Entropy, Risk Management, Yield Distribution, Crop Production/Industries, Environmental Economics and Policy, Production Economics,

A Mixed Effects Model of Crop Yields for Purposes of Premium Determination

Farm income is highly variable due to annual price and yield uncertainties. The federally subsidized crop insurance program is an important tool for managing this risk, and has grown from a relatively modest program to one that encompasses the majority of productive cropland in the country. The success of this program depends on identification of actuarially fair insurance premium rates, which in turn depends on accurate estimation of farm-level yield distributions. We use the confidential U.S. Department of Agriculture Risk Management Agency (RMA) panel dataset to estimate farm-specific distributions of yields and actually fair crop insurance premiums. Our ongoing work includes using the difference between our estimated actually fair premiums and RMA's to predict which insurance contracts farmers select. Ultimately, we will predict potential efficiency gains from using our empirical model for premium determination.Yield, Crop Insurance, Policy, Mixed Model, Agricultural and Food Policy,

Agricultural Arbitrage, Adjustment Costs, and the Intensive Margin

Farmland and capital are an important and rapidly expanding component of the agricultural economy, and empirical evidence suggests that these assets are quasi-fixed in that adjustment costs are incurred when holdings are altered. Increased interest in the rate of return for investing in farmland suggests that an important consideration is the effect of adjustment costs on this return. A novel theoretical model is developed that ties together contributions from the farmland pricing and adjustment cost literatures, and the first order conditions for a utility maximizing decision maker are rearranged into intertemporal arbitrage equations that are similar in spirit to traditional finance models. The common assumptions that land and capital are quasi-fixed assets, and that production is characterized by constant returns to scale are tested and the evidence supports these assumptions. An empirical application of the arbitrage equations provides evidence that risk aversion and adjustment costs are jointly significant components of agricultural production, and that adjustment costs generate significant changes in the rate of return to farmland. The results have important policy implications as sluggish supply response due to quasi-fixity can lead to dramatically inflated commodity prices, and an accurate measure of the farmland return can help determine how far the extensive margin will expand or contract in response to a variety of policy scenarios, such as the subsidization of corn for ethanol, an increase in the variety of subsidized crop insurance products, or the introduction of new revenue support programs such as ACRE.Arbitrage, Adjustment Costs, Farmland, Asset Pricing, Capital, Cost Function, Risk, Production, Agricultural Finance, Consumer/Household Economics, Crop Production/Industries, Farm Management, Financial Economics, Land Economics/Use, Production Economics, Risk and Uncertainty,

Molecular weight, solubility and viscosity of β-Glucan preparations from barley pearling byproducts

β-Glucan, the representative dietary fibre component of barley, has received much attention, primarily due to its nutritional significance. In this study, β-glucans prepared from barley pearling byproducts were characterized with respect to their molecular weight, solubility and viscosity. Following the initial alkaline extraction, the crude β-glucan extract (45% purity) was further purified to approximately 90%. The isolated β-glucans exhibited a wide molecular weight range with peak molecular weight of less than 1 × 106 daltons. Solubilities of crude and purified β-glucans in water were lower than that of β-glucan in the native barley pearling byproducts. However, the aqueous solubility of purified β-glucan from pearlings was substantially higher than that of commercial β-glucan. Compared to the latter, purified β-glucan exhibited low apparent viscosity in aqueous solutions

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