ECONOMETRIC MODELLING OF THE EUROPEAN COMMUNITY COMPOUND FEED SECTOR: AN APPLICATION TO FRANCE

This paper develops a model of the European Community compound feed sector capable of explaining demand for feed ingredients, and the output demand and prices for compound feeds. The adopted framework rests upon the use of duality theory to represent the optimising production decisions of compound feed firms. In addition, an appropriate methodology is suggested to capture the rapid expansion in the consumption of compound feeds in the European Community and their adoption by livestock producers. The model is then applied to the French compound-feed sector using annual time-series data stretching over the period 1962–1980.     

On the Use of Price Ratio in Aggregate Supply Response: Some Evidence from the Poultry Industry

The specification of supply/demand relationships has received considerable attention in agricultural economics (Heien 1977). Economic theory has helped provide a basis for the specification of such relationships, one of its contributions being the proposition that prices should be interpreted only in relative terms. This has had a profound influence on model building in agricultural economics, leading a number of researchers to avoid the use of absolute prices in economic analysis. For this reason, numerous market models of the agricultural economy use price ratios as explanatory variables (e.g., Chen; Chen et al.; Heien, 1976; Gerra; Kulshreshtha and Wilson; Rahn; Talpaz; Morzuck et al.; Houck and Gallagher; Wilson et al.); these examples suggest that the use of such ratios is fairly widespread in econometric modeling of the crop and livestock sectors. One of the best examples of price ratios is the "feed cost to price" ratio commonly used in the analysis of livestock supply response. Indeed, since feed cost constitutes a major part of the total production cost in livestock activities, the "feed cost to price" ratio is often considered a proxy for profitability. For this reason, data on such ratios are regularly published for various livestock activities (e.g., USD A). Also, "feed cost to price" ratios are often employed in the specification of models of livestock supply response, (e.g., Chen; Chen et al.; Heien 1976; Gerra; Kulshreshtha and Wilson; Rahn; Talpaz). However, not all models of aggregate supply response follow this approach. For example, Freebairn and Rausser, and Arzac and Wilkinson, use prices as separate variables rather than in ratio forms in their models. In particular, they do not employ price ratios in their livestock and crop supply equations. The existence of these different approaches raises questions about the appropriateness of the use of price ratios in the modeling of aggregate supply.     

Implications of biofuels mandates for the global livestock industry: a computable general equilibrium analysis

The rapid growth of biofuels production, particularly in the United States, the EU, and Brazil, has had important implications for the global livestock industry—both by raising the cost of feed grains and oilseeds and by forcing onto the market a large supply of biofuel by‐products, most of which end up in livestock feed rations. This article investigates the impact of an expanding biofuels industry on the mix and location of global livestock production. Surprisingly, we find that growth in the U.S. and EU biofuels industries results in larger absolute reductions in livestock production overseas than in those regions, due to the international transmission of grains prices which is offset locally by the lower cost of by‐products. We also find that nonruminant production is cut more than ruminant livestock, because it is less able to use biofuel by‐products in its feed rations. Implementing biofuel mandates increases cropland area, a large portion of which is estimated to come from reduced grazing lands. The biofuel producing regions are expected to reduce their coarse grains exports and increase imports of oilseeds and vegetable oils, while they increase their exports of processed feed materials. In sum, biofuel mandates have important consequences for livestock as well as crops, with net effects influenced by the important role of by‐products in substituting for feedstuffs.     

Economic potential for improving the nutritional characteristics of feed grains

A comprehensive set of potential new feed grains for Australia was evaluated to help establish the options with the highest priorities for research. The cost–reducing impacts of the different options were analysed using a linear–programming model that determined the least–cost feed rations for the different livestock industries. Economic welfare analysis was then used to estimate the size and distribution of the benefits of research from the feed grains quality–improving research. The analysis revealed that there are only limited opportunities to improve the productivity and competitiveness of Australia's livestock industries by improving the nutritional characteristics of feed grains.     

DERIVATION OF OPTIMAL LIVESTOCK RATIONS USING QUADRATIC PROGRAMMING

Linear programming has been used extensively as a procedure for formulating least-cost livestock rations. More recently attention has heen focused on the incorporation of information on animal performance into the linear programming derivation of optimum livestock rations. Where the production is a quadratic function of nutrient inputs and where there are a large number of possible ration ingredients, parametric quadratic programming is shown to be an efficient computational technique for the derivation of “expansion path” rations. The region of economic interest along the expansion path is identified for the liveweight gain interval described by the production function. The rise of information contained in programming solutions to evaluate the economic significance of nutrient requirements and to aid in the search for possible ration ingredients is briefly discussed.     

Evaluating Input Standards for Non‐Point Pollution Control under Firm Heterogeneity

The efficacy and cost of input standards for reducing nitrate pollution from New Zealand dairy production are evaluated. In contrast to previous studies, firm heterogeneity is explicitly considered through the novel integration of efficient techniques for the calibration and decomposition of large optimisation models. Nitrogen fertiliser application should not be targeted by policy given its minor role in determining emissions. In contrast, livestock intensity is an appropriate base for regulation given its strong correlation with pollutant load. Abatement cost increases as stocking rate declines, but this can be offset at low levels of regulation through utilising slack feed resources to improve per‐cow milk production. Both uniform and differentiated input standards based on livestock intensity achieve substantial decreases in pollutant load at moderate cost. However, because of disparity in the slopes of abatement cost curves across firms, a differentiated policy is more cost‐effective at the levels of regulation required to achieve key societal goals for improved water quality.     

TIME AND RECURSIVENESS IN LIVESTOCK FEEDING TRIALS*

In livestock feeding experiments the problem of recursiveness arises because the quantity of feed consumed by an animal is a function of its past history of feeding. The problem is most acute where experiments are designed to analyse sub ad lib feeding. The analysis of such experiments encounters two important problems. The first is that the actual quantity of feed consumed is an endogenous variable and is not directly under the control of the experimenter or the livestock producer. The second problem is the mathematical complexity of the relationships involved. A solution is suggested as a quasi reduced-form model.     

ECONOMIC ANALYSIS AND LIVESTOCK FEEDING

Much has been written about feeding eficiency as a major influence on projits in livestock production. Feed costs are shown to be the largest single item of cost and feeding eficiency to hinge on the twin problems of ascertaining the best level of yield for which to feed and of selecting those, feedstufs that produce the yield at least cost. Having demonstrated the incontrovertible logic of marginal analysis in the solution of these problems, agricultural economists tend to abandon the farmer to the task of putting theory into practice. While it is not disputed that a knowledge of principles may assist producers by delineating the information that is ideally required, the gul/ that exists betmeen theoretical principles and their practical application is a very real one, and is the concern of this paper in respect of the determination of optimal levels of output. After reviewing the manner in which the relevant theory applies to diferent types of livestock production practical problems are considered and possible solutions discussed.     

Cost Minimization and Managing Soil Nutrient Loading: Conflict or Compromise?

The consolidation of agricultural operations over time has led to fewer, larger farms. For livestock operations, this consolidation has also led to higher animal concentrations and a greater incidence of production externalities. While nitrogen leaching problems are relatively well documented, phosphorus runoff is fast gaining attention as the next big nutrient‐related environmental problem associated with large, highly concentrated livestock operations. One approach for managing soil nutrient loading on dairy farms is for farm or feed mill operators to better manage what they feed livestock. The results suggest that, at typical feed prices, slight reductions in nitrogen loading and significant reductions in phosphorous loading can be accomplished with minimal increases in the cost of dairy rations. An important implication of these results is that the model can be used as a performance standard to help producers and feed millers determine the cost and level of nutrient reduction that are possible. The approach also suggests which ingredients could be most problematic relative to nutrient excretion goals. Avec le temps, la consolidation des activités agricoles a donné naissance à des exploitations plus vastes mais moins nombreuses. Dans le secteur de l'élevage, cette consolidation a aussi débouché sur une plus grande densité de la population animale et une incidence plus marquée des coûts de production externes. Si l'on possède une documentation relativement abondante sur la lixiviation de l'azote, celle du phosphore attire de plus en plus l'attention, car on y voit le prochain problème majeur de pollution associé aux grands élevages à forte concentration d'animaux. Une façon d'aborder la surcharge des sols en éléments nutritifs dans les fermes laitières consiste à amener les producteurs ou les fabricants d'aliments du bétail à prêter une plus grande attention à ce qu'ils donnent aux animaux. Les résultats de l'étude laissent croire qu'au prix typique des aliments pour animaux, on pourrait réduire légèrement la charge d'azote et sensiblement celle de phosphore en majorant de façon minime le prix des rations pour bovins laitiers. Ces résultats impliquent notamment qu'on peut se servir du modèle comme norme de rendement afin d'aider les producteurs et les fabricants d'aliments àétablir la réduction de la concentration des éléments nutritifs réalisable et son coût. Cette méthode indique aussi quels ingrédients soulèveraient le plus de difficultés en regard des objectifs d'excrétion des éléments nutritifs.     

Where to implement local biotech innovations? A framework for multi-scale socio-economic and environmental impact assessment of Green Bio-Refineries

Green Bio-Refineries (GBRs) have economic and environmental potentials through changing land use from cereals to grass production and provision of grass-based protein feed for livestock production and other valuable byproducts. However, the potentials are dependent on local conditions of the GBRs, such as land productivity, environmental sensitivity and transport distances for feedstock as well as the regional economy which GBRs are a part of. In this paper, we compare the total (direct, indirect and induced) effects of different location choices of GBRs in Denmark at different (municipal, regional, national) scales − a key step for decisions about development of GBRs from both investors' and authorities' perspectives. We integrate a local life-cycle assessment (LCA), a geographic information system (GIS) analysis and an economic-environmental input-output (EEIO) based model (LINE) into a common framework (GIS-LCA-EEIO). We show that locating GBRs in Western Denmark, where the soils are primarily sandy and livestock densities are high, generates higher socio-economic gains than in Eastern Denmark, where the soils are primarily loamy and the concentrations of livestock are lower. We conclude by sketching out priority areas for developing GBRs and discuss the policy implications of the results within the context of development of a bio-based economy.     

Farmer perceptions of legumes and their functions in smallholder farming systems in east Africa

Legumes play an important role in sub-Saharan Africa (SSA) farming systems through the provision of food, feed, fuel, income and a range of biophysical benefits, such as soil fertility enhancement and erosion control. However, their full potential is not being realized. The purpose of this study was to assess farmers’ perceptions and knowledge towards legumes and the rationale of farmers for current legume production practices using a survey of 268 farmers in the Democratic Republic of Congo and Kenya. Most of the farmers had some knowledge of legumes and their characteristics. However, they had little knowledge of some key functions, including soil erosion control and soil fertility improvement. Most farmers relied on radio and other farmers for legume-related information. Farmers with relatively large livestock holdings ranked provision of livestock feed as an important legume function. We conclude that farmers put more value on short-term benefits of legumes including food and income than long-term benefits such as natural resource management and thus grain legumes are more readily identified by farmers than forage species. Also, we conclude that farmers require more than just information about legumes to increase uptake, they also require improved market access to procure inputs and sell products to realize other benefits that are associated with growing legumes.     

Reconstructing production efficiency,land use and trade for livestock systems in historical perspective. The case of France, 1961–2010

This paper provides an original accounting of changes in livestock production efficiency per livestock category in historical perspective and connects livestock consumption with land requirements and virtual land trade. We use France as a demonstration study and account for productivity changes in terms of energy. Feed rations composition are reconstructed per livestock production and feed crop group over time to account for changes in land use in relation to dietary changes. Land requirements for consumption in France dropped by 28% over the study period besides an increase by 35% of the human population and by 53% of the livestock consumption. The two-fold increase in agricultural productivity is due, for half, to energy conversion efficiency improvements and for half to agricultural yields. Overall, the livestock energy conversion efficiency increased by 45% from 1961 to 2010, poultry gained 84%, pork 17%, sheep&goat 67% and cattle 27%. The feed share of oilcrops and cereals in animal rations doubled against a drop by 35% of feed from pastures. Virtual land imports for oilcrops in relation to livestock consumption in France today amount to 0.9 million ha against a maximum of 1.9 million ha in 1979. Besides its dependence on oilcrops imports, the French livestock sector displays net virtual land exports ranging from about 2.5–5.3 million ha per year over the study period. Gross virtual land trade is today five times higher than the net virtual trade. The difference highlights the share of circular product loops in increasingly integrated agricultural markets at the international scale.     

On the nature and magnitude of cost economies in hog production

In this article, we assess the impact of farm size on production cost and evaluate the marginal costs and margins by considering that input prices may change with the scale of production. By using French hog farm data, we estimate a system of equations including a feed price function, input demand functions, and an output supply function based on a technology approximated by a combined generalized Leontief‐Quadratic form. Our results suggest that the marginal costs are over‐estimated when the adjustment of the feed unit prices to a change in farm size is not controlled for. More specifically, the cost economies for large farms (enjoying the highest profits) arise primarily from lower feed prices, with technological scale economies having little impact. In contrast, farms with no hired labor exhibit technological scale economies and reach higher price‐cost margins compared to larger farms.     

Supply and demand estimates for feed grains in China

In the past two decades, the use of grain to feed livestock in China has increased rapidly. A number of studies have examined demand and supply of grain for animal feed in China. Forecasts have been made. Generally, these projections have turned out to be well wide of the actual supply and demand. Further, forecasts of supply and demand for feed grains for the same time periods have differed greatly. Accurate forecasts of variables affecting supply and demand benefit both producers and consumers. Past forecasts of supply and demand of feed grain for livestock production in China are reviewed and reasons for discrepancies between projections are explored. Ways to improve projections of demand for and supply of grain for livestock feed in China are identified.     

Decompositions of corn price effects: implications for feed grain demand and livestock supply

This article examines how corn prices affect the demand for feed grains and the supply of livestock outputs. The differential approach to the theory of the multiproduct firm is employed to examine ex ante decisions about feed grain demand and livestock supply. The estimation results suggest that livestock producers have little flexibility in adjusting the demand for corn in response to an increase in corn prices. The substitutable relationship between corn and distillers’ grains contributes to alleviating pressures on feed costs in response to high corn prices. In addition, the estimation results highlight that the composition of livestock supply can be altered by changes in livestock prices. On the basis of the estimated elasticities, the decompositions of profit‐maximizing input demand are conducted to examine the effects of changes in corn prices on feed grain demand and livestock supply. The decomposition results reveal that an increase in corn prices reduces corn demand but raises the demand for distillers’ grains mainly due to the substitution effects of corn price changes. The decomposition results also show that an increase in the price of corn reduces cattle supply but raises the supply of chicken and pork due to the output relationships in supply.     

The Effect of Energy Price Increases on the U.S. Livestock Sector

This study is unique and crucial to the current time period because of the recent high energy price escalation. The uniqueness of this study pertains to the void in energy impact research of the agricultural sector, more specifically to livestock. The U.S. Department of Energy has models estimating economy-wide impacts, but not the specific impacts on agriculture. The Iowa State study concentrated on the grain sector.
The results presented here indicate that energy price increases will have substantial effects on livestock prices and production. Energy price increases will also result in differential impacts on livestock commodities (with poultry and eggs having the largest price and production effects). Furthermore, the multi-period framework enables the livestock model to capture lagged production responses. Noticeable is the higher impacts occurring in the third and fourth years.
In the future, higher energy costs may induce changes in U.S. production, processing and distribution patterns of livestock commodities. The highly vertically integrated poultry and egg industries may begin shifting production locations away from the colder northern regions to areas with more temperate climates. For industries like beef, pork and dairy, there may be increased range production to reduce impacts from higher feed costs. For all industries, closer proximity of processing plants to major livestock producing areas may occur.     

Horseflies,wolves and wells: biophysical and socio-economic factors influencing livestock distribution in Kazakhstan’s rangelands

There have been studies on how pastoralists assess and choose the resources required for their livestock, but little research analysing whether livestock are matched to the available resources in a seasonal migratory system by an entire pastoral community over a year. This paper reports a case study of pastoralists in Kazakhstan which shows how the inter-relation of biophysical, institutional and economic factors results in the imperfect matching of livestock numbers to the distribution of forage resources. The research is based on a three-year study using anthropological interviews, formal survey data, and remotely sensed data covering all livestock (25,000 smallstock and approximately 2300 cattle, horses and camels) in a study area of 60,000 km² for an entire annual cycle; a combination of methodologies and geographical coverage that provides a comprehensive estimation of the factors that influence the pastoral exploitation of this human-managed, complex ecosystem. The research finds that the pastoralists are subject to a number of limitations in using biophysical niches which might otherwise provide the best feed and water resources for their animals at a particular season and site. Different ecozones offer seasonally-shifting advantages and disadvantages for the livestock, but livestock owners are also economically differentiated. The interplay between economic and biophysical factors exemplifies the multi-faceted character of pastoralists’ decision-making about site selection within a relatively open rangeland tenure system. Only those with the largest livestock holdings distribute their livestock to take advantage of the best seasonal resources. Despite the wide availability of biophysically suitable sites, most livestock owners’ choices are compromised and therefore frequently suboptimal, prompting the conclusion that natural resource matching is constrained.     

Public infrastructure and productivity growth in Greek agriculture

Recent research has focused on the effect of public infrastructure on economic performance. In this paper, a model of Greek agriculture's technology and behaviour is constructed based on the dual cost function framework. The model provides a decomposition of productivity growth into the components technical change, returns to scale, and public infrastructure. The empirical estimates indicate that public infrastructure investment provides a significant return to agriculture and augments productivity growth. Over the period 1960–1995, the impact of public infrastructure on productivity growth in livestock and crop production is found to be positive, although it has been declining since the late 1970s. These results strongly suggest that a decline in public infrastructure investment can partly explain the observed decline in the productivity growth of Greek agriculture in the 1980s.     

病死畜禽无害化处理PPP项目回报机制研究

［目的］可行性缺口补助是目前我国病死畜禽无害化处理利用PPP项目的主要回报机制,识别可行性缺口补助的主要影响因素,对于优化项目成本结构、提高财政支持效率、促进项目顺利实施具有重要的意义。［方法］文章运用生命周期成本分析法,通过对我国东南部地区的A县进行典型案例分析,使用财务净现值为社会资本投资决策的成本收益指标,构建该县病死畜禽无害化处理PPP项目的全生命周期成本模型,选取产品数量及价格、工资成本、基准收益率和合作期限等指标,分别分析其变动对项目可行性缺口补贴的影响。［结果］受畜牧产业结构调整和非洲猪瘟等重大动物疫病暴发因素影响,A县项目实际处理病死畜禽数量的变化对可行性缺口补助影响最大,有机肥价格、基准收益率、工资成本次之,合作期限的变动影响较小。［结论］适应区域产业发展布局调整趋势,因地制宜确定建设规模,设置可行性缺口补助,是保证PPP项目顺利建设和运营、切实发挥效用的关键。     

Optimal Feed Mill Blending

Commercial feed blending is a complex process consisting of many potential raw ingredients and final products. The sheer number of daily orders and final products at a typical feed mill means that raw ingredients cannot be mixed to directly produce final products in an economical fashion. As a result, the intermediate production of pellets with prespecified nutritional content is a necessity that makes the feed blending problem highly nonlinear. We discuss a nonlinear approach to feed blending and compare results from an empirical application to those from a sequential linear programming approach common to most feed mills.