Agricultural Marketing Policy Center

Permanent URI for this communityhttps://scholarworks.montana.edu/handle/1/2942

The purpose of the Agricultural Marketing Policy Center is to provide applied research and education, including extension education on agricultural marketing and related policy issues for informed decision-making by farm and ranch managers, public decision makers in rural communities and in local and state agencies, state legislators, and congressional delegations in Montana and the Northern Plains and Rockies Region.

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The 2007 Farm Bill: Montana Producer Preferences for Agricultural, Food, and Public Policy
(2007-02) Johnson, James B.; Haynes, George W.; Brester, Gary W.
The Farm Security and Rural Investment Act of 2002 provides the direction for federal agricultural, food, and public policy through September of 2007. The 2002 Act is the most recent in a series of comprehensive farm bills that have authorized federal farm programs. When the 2002 Act expires, new legislation will guide future programs. In the absence of new legislation, federal farm programs could revert to permanent legislation dating from 1949. The presence of permanent legislation helps provide the impetus needed to insure that agriculture, food, and rural policy issues will be addressed by Congress and by United States Department of Agriculture (USDA) programs.
Adjusted Gross Revenue-Lite: A Whole Farm Revenue Insurance Available in Wyoming
(2008-02) Johnson, James B.; Hewlett, John P.; Griffith, Duane
Adjusted Gross Revenue-Lite (AGR-Lite) is a federally-subsidized whole-farm revenue protection insurance plan. The plan is a whole farm (ranch) revenue insurance that covers revenue losses from most farm-raised crop commodities, animal commodities and unprocessed (unaltered) animal products such as milk and wool. The plan protects against low revenue due to losses in production and declines in product quality and market price. Specifically, the plan provides protection against low revenue due to production losses attributable to unavoidable natural disasters and market fluctuations that impact farm revenue in the insurance year.
Agricultural Chemical Prices in Canada and the United States: A Case Study of Alberta and Montana
(MSU Extension, 2004-12) Smith, Vincent H.; Johnson, James B.
Differences in retail prices for similar or identical agricultural chemicals have been a source of controversy in the Prairie Provinces of Canada and the Northern Great Plains States of the United States since the mid-1990s. Such differences may exist because of differing pesticide regulations between the United States and Canada. Different regulations may inhibit trade between the two regions and isolate markets from one another. If this is the case, then regulatory harmonization that allows Canadian and U.S. agricultural producers to purchase agricultural chemicals in Canada or the United States would generally lead to harmonization of agricultural chemical prices.
Agricultural Leasing Study
(2015-07) Haynes, George W.; Smith, Vincent H.
This study describes crop-share and cash leasing arrangements in Montana for calendar year 2013 by surveying land owners, who own dry and irrigated cropland and grazing land. A dataset containing names and address of all land owners in Montana was provided by the Department of Revenue’s Property Assessment Division. A sample of 880 land owners selected from this population completed the telephone implemented by the Bureau of Business and Economic Research at the University of Montana. Faculty members in the Department of Agricultural Economics and Economics at Montana State University were responsible for developing the questionnaire; conducting personal interviews with landlords, tenants, and real estate agents; and, analyzing these data.
Agriculture in the Tongue River Basin, Output, Water Quality, and Implications
(2013-05) Fitzgerald, Timothy; Zimmerman, Grant
Natural resources have long been important to economic activity in Montana. From wildlife populations to mineral deposits, different residents have recognized the natural potential of the state and worked to create wealth from different resources. Agriculture has been and remains a important means of creating economic value from natural resources—gross revenues from agriculture are larger than any other sector in Montana, though it ranks lower in terms of contribution to gross domestic product.1 This study considers the value of a specific natural resource in Montana—water quality in the Tongue River in the southeastern part of the state. The study has three main sections: the first documents the agricultural production of the region; the second evaluates the importance of water quality to that production; and the third considers the distributional implications including contribution to public finances.
The Canadian Wheat Board: Government Guarantees and Hidden Subsidies
(MSU Extension, 2004-07) Goodloe, Carol
The operations of the Canadian Wheat Board (CWB), a state trading enterprise, have generated controversy over the years, partly because of an alleged lack of transparency in its operations. This study examines one aspect of operations that is not well understood – the government guarantee of CWB borrowing and export credit sales. The CWB is able to take advantage of this special privilege to generate a “financial cushion,” or non-market based revenue, that it can use to enhance returns to producers, discount export prices, or pay administrative expenses. Current WTO negotiations should build on U.S. and EU proposals on STEs and export credit guarantees to address potential trade-distorting practices of STEs such as the CWB.
The Common Crop (COMBO) Policy
(2012-08) Johnson, James B.; Smith, Vincent H.; Hewlett, John P.
Beginning with the 2011 crop year, the United States Department of Agriculture’s (USDA) Risk Management Agency (RMA) introduced an initiative to combine and simplify crop insurance. RMA released the Common Crop Insurance Policy Basic Provisions and related Crop Provisions as the insurance policy basis for crop insurance coverage. The new policy is widely described as the COMBO Policy because it explicitly combines APH revenue and APH yield insurance in one general policy and creates a single APH revenue program for each of the commodities that are eligible for APH-based revenue coverage.
Constructing an Organic Price Series: Not as Easy as Expected
(2008-11) Buschena, David
The growth of organic farm production and consumer demand has raised questions regarding the profitability of organic systems. A primary component of this profitability is the size and sustainability of organic price premiums. Additionally, there have been recent large increases in the prices for conventionally-produced commodities due to increases in input costs (particularly fertilizer and fuel), changes in export demand (including the value of the dollar), and also perhaps the ethanol market. We explore the relationships between organic and conventional grain prices over the period 1998 to 2008 using monthly price series. This relatively long period allows us to assess the nature of the price relationships between organic and conventional prices for periods prior to and after the recent run-up in conventional prices. Our focus is on the three key crops for Montana: corn (as a feed barley substitute), hard red spring wheat, and hard red winter wheat.
Crop Insurance for Alfalfa Seed Production: A Pilot Program Available in Select Wyoming Counties
(MSU Extension, 2006-07) Johnson, James B.; Hewlett, John P.
In several western states including Wyoming a federally-subsidized multiple peril crop insurance product approved by the Risk Management Agency is offered on a pilot basis for forage seed production. In Big Horn and Park counties (Figure1) irrigated alfalfa seed production grown under certification standards or grown under an alfalfa seed contract is insurable.
Crop Subsidy and Crop Insurance for Wyoming Farmers in a New 2013/14 Farm Bill
(2013-07) Smith, Vincent H.; Johnson, James B,; Hewlett, John P.
Farm policy is in flux and the future of many farm subsidy programs is in question. In Congress, the Senate Agriculture Committee (and the entire Senate) and the House Agriculture Committee have recently developed alternative farm bill proposals. While the two bills include some very similar or identical proposals, they also contain some very different initiatives. Those differences would normally be resolved through a conference process within a joint House and Senate Agricultural Committee conference committee.
An Exploration of Market Pricing Efficiency During the Dairy Options Pilot Program
(MSU Extension, 2004-09) Buschena, David; McNew, Kevin
Put options have been recommended as a substitute for price support programs (Gardner, 1977; also some more recent comments?), and subsidized option purchases have received some support in lieu of subsidized insurance programs (cite?). Put options are an interesting alternative to price supports because their market-determined price levels allow for flexibility and adjustments to relevant current and expected market conditions. Options markets should also be relatively free from the bureaucratic decision processes needed for administration of commodity price supports.
Group Risk Income Protection
(MSU Extension, 2006-07) Johnson, James B.; Hewlett, John P.
Group Risk Income Protection (GRIP) is a federally-subsidized risk management tool to insure against widespread loss of revenue from an insured crop in a county. Crop producers whose yields are highly correlated with county yield are most likely to use this product to insure that the combination of yield and price results in a particular level of revenue. Unlike the related Risk Management Agency-approved Group Risk Plan insurance, either a price or yield decline may result in a producer being indemnified. If total revenue (price times yield) in county is less than a producer’s trigger revenue, the producer will be indemnified for revenue losses due to insurable causes. But producers need to recognize that they could incur reduced revenue from the insured acres of a crop and not be indemnified if there is not a commensurate decline in county per acre revenues for the crop.
GRP Rangeland Insurance for Montana
(MSU Extension, 2006-09) Schumacher, Joel Brent; Johnson, James B.; Brester, Gary W.
A new Group Risk Plan (GRP) Rangeland Insurance product is being offered by USDA’s Risk Management Agency (RMA) in 39 Montana counties. For counties in which this insurance product is not offered, USDA’s Farm Service Agency continues to offer the Noninsured Crop Disaster Assistance Program (See Briefing No. 14). The new GRP Rangeland Insurance product is intended to increase ranch managers’ options for managing risk related to the loss of grazing from any of several causes.
GRP Rangeland Insurance for Wyoming
(MSU Extension, 2006-10) Hewlett, John P.; Schumacher, Joel B.; Johnson, James B.
A new Group Risk Plan (GRP) Rangeland Insurance product is being offered by USDA’s Risk Management Agency (RMA) in 10 Wyoming counties. For counties in which this insurance product is not offered, USDA’s Farm Service Agency continues to offer the Noninsured Crop Disaster Assistance Program (See Briefing No. 14). The new GRP Rangeland Insurance product is intended to increase ranch managers’ options for managing risk related to the loss of grazing from any of several causes.
Harvest-Time Protein Shocks and Price Adjustment in U.S. Wheat Markets
(2007-08) Smith, Vincent H.; Goodwin, Barry K.
Dynamic relationships between three classes of wheat are investigated using threshold VAR models incorporating the effects of protein availability. Changes in the stock of protein are found to generate significant impulse responses in the price of hard red spring wheat and hard red winter wheat but not soft red wheat. These impulse responses to identical changes in protein stocks are larger when the absolute deviations of protein stocks from normal levels are large. Shocks to the prices of individual classes of wheat result in complex impulse responses in the prices of the other wheat varieties. Notably, however, a shock to the price of hard red winter weak appears to result in little or no impulse response in the price of hard spring wheat, though, importantly, the opposite is not true.
Harvest-Time Protein Shocks and Price Adjustment in U.S. Wheat Markets
(MSU Extension, 2005-06) Goodwin, Barry K.; Smith, Vincent H.
Dynamic relationships between three classes of wheat are investigated using threshold VAR models incorporating the effects of protein availability. Changes in the stock of protein are found to generate significant impulse responses in the price of hard red spring wheat and hard red winter wheat but not soft red wheat. These impulse responses to identical changes in protein stocks are larger when the absolute deviations of protein stocks from normal levels are large. Shocks to the prices of individual classes of wheat result in complex impulse responses in the prices of the other wheats. Notably, however, a shock to the price of hard red winter weak appears to result in little or no impulse response in the price of hard spring wheat, though, importantly, the opposite is not true.
Health Information and Impacts on the Beef Industry
(2006-11) Marsh, John M.; Holzer, Bret M.
The economic well being of cattle producers depends upon numerous factors, including consumer demand for beef, red meat and poultry supplies, marketing costs, international beef trade, and agribusiness concentration. Changes in consumer beef demand are transmitted through the marketing channel and affect meat packer demand and prices for slaughter cattle and feedlot demand and prices for feeder cattle. Since the mid 1970s, consumer demand for beef has declined due to changes in consumer preferences, demographics, and relative meat prices (Marsh 2003). Based on an estimated annual retail beef demand index, retail beef demand declined by about 47 percent from 1970 to 2004. However, more recently, from 1998 to 2005 the index increased by about 22 percent (LMIC).
An Introduction to Federal Crop Insurance Products for New and Beginning Wyoming Farmers and Ranchers
(2019-02) Johnson, James B.; Smith, Vincent H.; Hewlett, John P.
Federal crop insurance products have been available to farmers in the United States for 80 years. Beginning in the early 1990s, the range of products offered by the USDA Risk Management Agency expanded, and today farmers have access to federal crop insurance for most of the crops they grow. Currently, nationally farmers can obtain insurance for over 140 crops and forages. Over the past several years, coverage has become widely available for crops produced under organic practices at price elections based on prices that reflect organic premiums.
Introduction to Managing Risk and Specialty and Organic Crop and Livestock Operations
(2016-08) Smith, Vincent H.; Johnson, James B.; Hewlett, John P.
Producers include specialty and organic crops and specialty livestock in their farm’s enterprises for many reasons. Nevertheless, over the longer term, specialty and organic crop and livestock enterprises have to be managed in ways that ensure the farm remains profitable. On many farms specialty and organic enterprises are included because they allow the farm’s human resources to be used more effectively. A specialty livestock operation (for example, producing cheese from goat’s milk) may be introduced because a family member (child, spouse) has particular skills and interests in the enterprise and the time to manage the operation. The enterprise itself may have the added benefit of serving as a financial risk management tool because revenues from the operation are relatively stable. Increasingly, many farms are choosing to focus substantial amounts of their available resources, or even the whole farm or ranch, to specialty and organic crop and livestock enterprises.
Livestock Forage Disaster Program (LFP): Montana
(2010-01) Johnson, James B.; Smith, Vincent H.
Congress provided both ongoing and ad hoc disaster programs over the period 1980 to 2008.