Innovative Methods of Milk Transport: Double-Bottoms and TOFC

Costs involved in double-bottoms (tandem trailers) and TOFC (trailer-on-flatcar; piggyback) were modeled and compared with conventional over-the-road transport of bulk milk from northern Vermont in single trailers. Both modes were found to be both cost-effective and fuel-sparing alternatives to conventional transport.Since the study's completion, although not as a direct result of it, two shippers have adopted these innovations. One of them (using double-bottoms) has budgeted savings even larger than those claimed in our study.

Forecasting the Basis for Corn in Western New York

This study develops a simple model to forecast the basis for corn in a specific region. Improved forecasts can improve hedging decisions. Basis behavior, however, depends on explanatory variables that are themselves difficult to forecast with precision. This limits the usefulness of the basis model, but it does offer some benefit over naive forecasts.

Explaining Truck Rate Variations for Produce Shipped to the Northeast

Models are developed to examine the determinants of weekly truck rates for produce shipped to the Northeast from California and Florida. In the empirical work, a large proportion of the variation in rates is explained and the estimated parameters are generally consistent with a priori expectations. The total quantity of produce shipped from each state, the proportion of this total which is compatible with the commodity in question, and the F.O.B. price if the commodity were found to be the most important determinants of truck rate levels. Fuel costs have a surprisingly weak influence, at least in the short run, and for Florida origin commodities the truck rate-fuel cost relationship appears to have weakened over the 1979–1983 sample period.

Characteristics of Fluid Milk Expenditure Patterns in the Northeast Region

Expenditure patterns for whole milk and lowfat milk in the Northeast region were examined by applying the Tobit maximum likelihood procedure to the 1977–78 USDA NFCS data.Results suggest that differing expenditure patterns exist between whole milk and lowfat milk. Household income estimates indicate significant positive effects on expenditure for lowfat milk but negative on expenditure for whole milk. Whole milk expenditure was estimated to be strongly related to the family life cycle stages through the child-raising years.

An Empirical Analysis of Dairy Farm Reinvestment Versus Tax-Deferred Plans for Retirement Income

This study empirically compares the retirement values of dairy farm investments to tax-deferred retirement investments that are funded with bank certificates of deposit or common stock. For a successful dairy farm, the results indicate that tax-deferred retirement plans that generate rates of return similar to certificates of deposit or common stock mutual funds are probably not as good an investment as reinvesting farm earnings back into the farm business.

Modeling the Use of Sewage Sludge on Pennsylvania Dairy Farms: An Economic Analysis

A five-year linear programming farm planning model, permitting the inclusion of nitrogen decay rates, was constructed to include the use of sewage sludge as a primary crop nutrient source. Twenty-two scenarios depicting various operating conditions were examined and maximized net farm incomes compared.Although only a small percentage difference resulted between the highest and the lowest net revenues over the five-year period, given a variety of operating circumstances, those scenarios including the use of sludge yielded the highest net incomes. Nitrogen application restrictions were at their upper limits when sludge use was included in the optimal solution. The calculation of net present values, for the two sludge contents considered, provided value estimates compatible with the linear programming solutions.

Measuring the Nonmarket Value of Massachusetts Agricultural Land: A Case Study

Agricultural land provides a variety of “nonmarket” services to the Commonwealth, including wildlife habitat, scenic vistas, and recreation. This study utilizes an iterative bidding game to estimate willingness-to-pay of residents of three central Massachusetts counties to preserve state agricultural land. Through the use of these data, estimates of the value of these nonmarket amenities are derived so that a fuller measure of the value of agricultural land can be obtained. This information may be useful to policy makers administering such programs as the Agricultural Preservation Restriction Act (Chapter 780) which are designed to arrest the conversion of Massachusetts farmland to urban uses.

Estimating Crop Yield Insurance Premium Rates

Insurance rates for crop yield protection programs have traditionally been calculated from county average yields. Where grower acreages and yields are not homogeneous, this approach leads to higher premiums and payouts and greater incidence of adverse selection. With individual grower data a production weighted rate premium calculation method can be used which avoids these problems. Furthermore, the definition of rate classes is not constrained to county boundaries. The additional complication of technical change is addressed and one solution is provided. Results are presented for the cranberry industry.

Impact of Tenancy on Land Management

Leasing of agricultural land is gaining in importance in North America. The impact of leasing on soil management practices is examined in an area in the Canadan province of Ontario. Prevailing land contracts are insecure and the rental land market appears to be imperfect in the area. Under these conditions leasing leads to undesirable soil management practices and consequently to a lower state of conservation and to lower crop productivity over time. A difference in soil management and crop productivity has been observed between owner-operated and rented land.