MANAGEMENT AND INFORMATION AT U.S. AGRIBUSINESSES: PERSPECTIVES FROM THE CATTLE-BEEF SECTOR

Agribusinesses in the cattle-beef sector use information from both external sources and proprietary sources in the management decision making process. This research reports the results of personal interviews with employees at all levels of the beef market channel, covering the information resources that they value and the priority their firms place on information. Respondents used data on prices and cattle inventories collected by the public sector, data on retail grocery sales made available through private firms, and data and analysis from trade associations. Companies involved in meat packing and retail distribution use information technologies to automate delivery and billing for products and they are investing in improved systems. A barrier to a more efficient supply chain in beef is the incomplete implementation of retail scanner systems for fresh meat.Livestock Production/Industries,

Lending to Agribusinesses in Zambia

Microfinance has been celebrated in the last decade as a new paradigm shift in lending that has achieved immense success in improving the living standards of the poor through the provision of financial services. Institutions involved in microfinance around the world have used innovative loan contract mechanisms to profitably lend to the poor and achieve very high repayment rates while allowing the borrowers to profit and grow their enterprises. While high repayment rates have been realized by microfinance institutions focused on lending to consumers and to retail-type micro enterprises, few microfinance institutions focused on lending to agricultural producers have achieved comparable success. This article compares the mechanisms employed by major microfinance institutions with a successful lending institution in Zambia that serves agricultural businesses. Findings are: ZATAC uses progressive lending and group lending contracts adapted in some ways to suit seasonal agricultural production credit requirements. The institution also uses various forms of collateral substitutes like other microfinance institutions. We also find that ZATAC uses other mechanisms such as automatic loan repayments tied to production, cooperative sanctions, contracted production and provision of business development services that eventually improve loan repayments significantly and enable the lender to lower interest rates.Agribusiness,

EMPIRICAL INVESTIGATION OF THE IMPACT OF THE 2007 RECALL ON THE DEMAND FOR PEANUT BUTTER BRANDS

The US Food and Drug Administration confirmed in February 2007 that a major foodborne illness outbreak was caused by two peanut butter brands, Peter Pan and Great Value, manufactured by ConAgra Foods Inc. at its Sylvester, Georgia, processing plant. As a result, on February 14, 2007, ConAgra voluntarily issued a nationwide recall of its Peter Pan and Great Value peanut butter products produced since May 2006 and sold through grocery and retail stores throughout the United States. Using the ACNielsen Homescan Panel for calendar years 2006, 2007 and 2008, this study investigates the impacts of the recall on the demand for peanut butter by estimating a second degree polynomial distributed lag with a lag length of three and endpoint restrictions imposed. The estimation results showed that the recall did have a statistically significant positive impact on the demand for peanut butter as a category. Also, the recall appeared to have had a statistically significant demand-enhancing effect on the Jif peanut butter brand and a demand-diminishing effect on the Skippy peanut butter brand. In all the cases, the maximum impact of the recall took place one to two weeks after the release of the recall.food recalls, polynomial distributed lag model, consumer behavior, Agricultural and Food Policy, Consumer/Household Economics, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Health Economics and Policy, Marketing,

VALUE ADDED IN FOOD MANUFACTURING AND RETAILING: A RATIO ANALYSIS OF MAJOR U.S. STATES

Agribusiness,

THE ECONOMIC IMPACT OF THE RED IMPORTED FIRE ANT ON THE METROPLEXES OF TEXAS

This research estimates the annual economic impact of the fire ant on key urban sectors in Texas. A study was conducted in 1998-1999 in the 5 metroplexes of Austin, Dallas, Fort Worth, San Antonio and Houston to estimate the costs of controlling and managing fire ants (Lard, et al). This study found that the annual expenditure for fire ant control and management by selected sectors in these metroplexes totaled more than $581 million. The total annual expense by sector amounted to$526 million for households, $29 million for golf courses,$25 million for schools, and $0.6 million for cities. These annual cost figures do not include all urban costs or costs borne by electrical utility companies, communication firms and cable companies. These results can be used to assess damages and estimate the potential costs and benefits of control and management programs, such as the community-based effort underway as part of the Texas Fire Ant Initiative.Crop Production/Industries,

A PRELIMINARY SURVEY OF USERS OF AGRICULTURAL ECONOMICS INFORMATION: PROCEDURES AND RESULTS

This survey of 100 economic analysts in agriculture, outside of government and academia, assesses the changing public-private balance in information services in agriculture. Its objectives were to: (1)contact front-line private-sector analysts who handle economic issues in agriculture and ask them about the data and information they most value and why, (2) experiment with measurement instruments to segment and describe information attributes that users value; and (3) assess the interest of front-line analysts in the changing public- private balance in information provision. The results provide a list of information services used by analysts, descriptive responses on attributes that contribute to value-added, and statistical analysis relating respondent characteristics to the use of information from the U.S. Department of Agriculture.Teaching/Communication/Extension/Profession,

EFFECT OF REVENUE INSURANCE ON ENTRY AND EXIT DECISIONS IN TABLE GRAPE PRODUCTION: A REAL OPTION APPROACH

This study determines the entry and exit thresholds of table grape farming with irreversible investment under uncertainty. Real option approach is adopted to consider the investment and management flexibility. Also revenue insurance is introduced to consider the effect of the risk management programs on the entry and exit thresholds. Results show that revenue insurance increases the entry and exit thresholds by 1% and 4%, respectively, thus discouraging new investment and current farming, as long as the revenue guarantee is less than the exit threshold. Revenue insurance increases the entry threshold by 3% and decreases the exit threshold by 13% as long as the revenue guarantee is greater than the exit threshold. In this case, revenue insurance discourages the investment and encourages the current farmer to stay in farming, further. However, the decrease in the subsidy rate results in the increase in both entry and exit thresholds. Thus, the premium subsidy levels should be carefully considered if the policy objective is to encourage growers to shift to higher-value crops.Risk and Uncertainty,

Machinery-Sharing Contractual Issues and Impacts on Cash Flows of Agribusinesses

Contractual arrangements for joint machinery ownership between independent agribusinesses are explored. A two-farm economic simulation model of locations in Texas, Colorado, and Montana is developed to provide insight associated with sharing combines. Important variables include combine size (efficiency), yield losses resulting from untimely access to equipment, the penalty structure for untimely delivery, and cost-sharing and depreciation deductions claimed between producers. Combine sharing is risk-reducing in most cases. The gains to both parties are lowest when harvesting periods overlap. While the value of sharing is positive under many scenarios, benefits from sharing are small relative to total farm revenue.combines, machinery sharing, risk, simulation, Agribusiness, Agricultural Finance,

PROFITABILITY OF GEOGRAPHIC DIVERSIFICATION STRATEGY

Agribusiness,