Agricultural Economics & Economics

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Situated jointly within MSU's College of Agriculture and College of Letters and Sciences, our department offers a unique opportunity for students with diverse interests to learn skills in critical analysis, logical problem solving, data and policy analysis, written and oral communication, business management. We train individuals who will make a big difference in the world by applying solid critical thinking skills. Our award-winning faculty has expertise in a wide variety of fields. We conduct cutting-edge research and teach a myriad of courses.

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Start date: 2010Subject: search.filters.subject.Agriculture

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    The Impacts of the Canadian Wheat Board Ruling on the North American Malt Barley Markets
    (2014-07) Bekkerman, Anton; Schweizer, Heidi; Smith, Vincent H.
    The 2011 Marketing Freedom for Grain Farmers Act deregulated Canadian grain markets and removed the Canadian Wheat Board (CWB) as the sole buyer and seller of Canadian grain. We develop a rational expectations contract decision model that serves as the basis for an empirically informed simulation analysis of malt barley contracting opportunities between Canadian farmers and U.S. maltsters in the deregulated environment. Comparative statics and simulation results indicate that some new opportunities for contracting are possible, but the likelihood of favorable conditions for U.S. maltsters to contract with Canadian rather than U.S. farmers is low—between 9% and 35% over a range of possible selection rates. The effects on contracting of the termination of the Canadian grain transportation revenue cap policy and of the relaxation of criteria for the release of new spring wheat varieties are also investigated. While changes to grain transportation policies are not likely to significantly affect favorable conditions for contracting, reducing constraints on Canadian farmers’ access to higher yielding wheat varieties could increase the returns from growing spring wheat but decrease the likelihood of contracting for malt barley with U.S. maltsters by an average of 5.3 percentage points.
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    Pea in Rotation with Wheat Reduced Uncertainty of Economic Returns in Southwest Montana
    (2015-01) Miller, Perry R.; Bekkerman, Anton; Jones, Clain A.; Burgess, Macdonald H.; Holmes, Jeffrey A.; Engel, Richard E.
    Pea (Pisum sativum L.) is increasingly being rotated with wheat (Triticum aestivum L.) in Montana. Our objective was to compare economic net returns among wheat-only and pea–wheat systems during an established 4-yr crop rotation. The experimental design included three wheat-only (tilled fallow–wheat, no-till fallow–wheat, no-till continuous wheat) and three no-till pea–wheat (pea–wheat, pea brown manure–wheat, and pea forage–wheat) systems as main plots, and high and low available N rates as subplots. Net returns were calculated as the difference between market revenues and operation and input costs associated with machinery, seed and seed treatment, fertilizer, and pesticides. Gross returns for wheat were adjusted to reflect grain protein at “flat” and “sharp” discount/premium schedules based on historical Montana elevator schedules. Cumulative net returns were calculated for four scenarios including high and low available N rates and flat and sharp protein discount/premium schedules. Pea–wheat consistently had the greatest net returns among the six systems studied. Pea fallow–wheat systems exhibited greater economic stability across scenarios but had greater 4-yr returns (US$287 ha–1) than fallow–wheat systems only under the low N rate and sharp protein discount schedule scenario. We concluded that pea–wheat systems can reduce net return uncertainties relative to wheat-only systems under contrasting N fertility regimes, and variable wheat protein discount schedules in southwestern Montana. This implies that pea–wheat rotations, which protected wheat yield and/or protein levels under varying N fertility management, can reduce farmers’ exposure to annual economic variability.
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    Evaluation of Crop Insurance Yield Guarantees and Producer Welfare with Upward Trending Yields
    (2012-12) Adhikari, Subodh; Knight, T. O.; Belasco, Eric J.
    Actual Production History (APH) yields play a critical role in determining the coverage offered to producers by the Risk Management Agency’s yield-based crop insurance products. Using both county and individual insured unit data, we examine the impact of APH yield trends for Texas cotton and Illinois corn. Our findings indicate that biases due to using simple average APH yields when yields are trending upward reduce the expected indemnity and actuarially fair premium rate. The estimated welfare effect also varies significantly with different commonly used detrending approaches. This study demonstrates that producer welfare can be enhanced through proper treatment of yield trends in crop insurance programs.
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