INDIRECT UTILITY FUNCTIONS AND TESTABLE CONDITIONS

We develop testable hypotheses for utility maximization given risk averse producers based on a general specification of the utility function. This is a direct expansion of the model posed by Pope (1978). Empirical tests using production data with a translog specification indicate that utility maximization does not always hold.Research Methods/ Statistical Methods,

The Triple Bottom Line: What is the Impact on the Returns to Agribusiness?

event-study, sustainability, profitability, corporate social responsibility, Dow Jones Sustainability Index, Agribusiness, Agricultural and Food Policy, Agricultural Finance, Demand and Price Analysis, Environmental Economics and Policy, Financial Economics, Risk and Uncertainty,

Factors Affecting the Adoption of Genetically Modified Crops by Young and Beginning U.S. Farmers and Ranchers

The comprehensive set of programs in the 2008 Farm Bill designed to support Young and Beginning Farmers and Ranchers (YBFR), combined with a substantial amount of resources allocated to each of these programs, can be viewed as an investment in ensuring the future sustainability of the U.S. agriculture system. Understanding the factors that influence YBFR to adopt technology will become increasingly important if YBFR are to succeed. Of particular interest is why YBFR adopt Bt corn, Bt cotton, and HT soybeans. Results conform to a majority of our a priori expectations; YBFRs are more likely to adopt GM crops if they are not a full owner of the farm operation, as sales of the farm operation grow, if the crop is important to their region, and as they become more risk averse.Agricultural and Food Policy,

Protecting Your Turf: First-mover Advantages as a Barrier to Competitor Innovation

Product innovation for a juice company and its associated first-mover advantages are analyzed. Stochastic simulation is used to model market size, price, competitive intensity, and the likelihood of competitor entry. Results of moving first allow the firm to capture market share, realize first-mover advantages in excess of $2 million, and deter competitor innovation. In addition, the proposed model is flexible enough to be applied in other industries.Product innovation, first-mover advantages, barriers to entry, stochastic simulation, uncertainty, Research and Development/Tech Change/Emerging Technologies,

Identifying Abnormal Returns to Food and Agribusiness Stocks on Key Farm Policy Legislative Dates

The efficient market hypothesis would suggest that stock prices incorporate the information revealed in the public process of creating legislation as the debate occurred. Thus, there should be no abnormal returns to agribusiness stocks on key legislative dates when drafting and altering the farm bill. Using an event study methodology, key legislative dates are tested for abnormal returns to firms that supply inputs to or process outputs of agricultural producers. Typically, agribusinesses react on the date legislation emerges from the joint House and Senate conference committee.agribusiness stock values, event study, farm bill, Agribusiness, Agricultural and Food Policy,

Innovativeness and Innovation: Implications for the Renewable Materials Supply Chain

innovativeness, innovation, supply chain management, triple bottom line, corporate social responsibility, Agribusiness, Agricultural Finance, Demand and Price Analysis, Financial Economics, Q10, Q27, Q42, Q47,

Internet Access and Internet Purchasing Patterns of Farm Households

The Internet is becoming an increasingly important management tool in production agriculture. Using data from the 2004 Agricultural Resource Management Survey (ARMS) and a double-hurdle estimation approach, we explore the adoption of computers with Internet access by and Internet purchasing patterns of farm households. Adoption of the Internet is positively related to age and education of the operator, off-farm work, presence of spouse, participation in government programs, farm size, and regional location of the farm. Internet purchasing patterns of farm households are positively related to the education of the operator and spouse, presence of teenagers, and regional location of the farm. Finally, farm businesses and their households are more likely to purchase a greater percentage of non-durable goods through the Internet as distances to markets increase.adoption of Internet, education, farm size, farm households, Internet, double-hurdle model, farm business, major household items, minor farm inputs, Agricultural Finance, Consumer/Household Economics, Farm Management,

Valuing Limited Information in Decision Making Under Uncertainty

Fresh Juice Inc. (FJI) is in the process of determining whether they should launch a new fruit juice in a market that has been relatively stagnant for the last 15 years. Management of FJI is faced with uncertainty surrounding market share, market size, price, and competitor entry. In addition, FJI has the ability to chose between alternative production processes; this choice directly affects the likelihood the investment will return a positive Net Present Value. This case teaches students how to develop a stochastic simulation models given limited information to analyze risk investment decisions.: simulation, uncertainty, strategic management, flexibility, limited information, investment analysis

Is Growing Livestock Inventories a Sustainable Initiative Given Phosphorus Crop Removal Regulations?

As environmental regulations continue to tighten and shift from nitrogen to phosphorus-based application standards for manure, phosphorus removal will become increasingly important for any state considering a livestock growth initiative. A framework was developed that can determine a state’s phosphorus removal capacity based upon production of livestock and crops and varying phosphorus removal standards. The state level results indicate that Indiana, along with Arizona, Illinois, Iowa, Kansas, and Texas, are well positioned to undertake a livestock growth initiative given that each state has excess phosphorous removal capacity.Agribusiness, Livestock Production/Industries,

Scorecarding and Heat Mapping: Tools and Concepts for Assessing Strategic Uncertainty

The dramatic changes occurring throughout the agriculture industry are creating new and different uncertainties that result from a turbulent business climate. The objective of this paper is to present a methodology to understand, assess and evaluate, and manage strategic uncertainty. The approach is to present a mental model that frames assessment of strategic uncertainty from a potential and exposure perspective. Scorecarding and heat mapping assessment tools operationalize the mental model. Participants in an executive agribusiness educational workshop applied this mental model and the assessment tools to one of three hypothetical seed companies. The participants then provided an evaluation of the usefulness and effectiveness of uncertainty scorecarding and heat mapping.Uncertainty, scorecarding, strategic uncertainty, heat mapping, potential, exposure, likelihood, Risk and Uncertainty,