Black Sea and World Wheat Market Price Integration Analysis

In 2008–10, Russia and Ukraine together exported an average of 29 million tons of wheat per year, and have become important players in the international wheat market. This research summarizes the short‐ and long‐run wheat price dynamics between Ukraine and Russia, and other major wheat exporters—the United States, European Union (EU), and Canada—from 2004 to 2010. Tests of market price co‐integration (Johansen maximum likelihood test and residual‐based tests) as well as threshold error correction techniques were performed for this purpose. The results suggest that Russian wheat prices were co‐integrated with EU and U.S. wheat prices but not with Canadian wheat prices. Ukrainian wheat prices were found to be co‐integrated with French wheat prices only. The estimated long‐run wheat price transmission elasticities were estimated to be equal to 1.04 between Russian and French (a representative country of the EU) wheat prices, 1.16 between Russian and U.S. wheat prices, and 1.05 between Ukrainian and French wheat prices. We also found the short‐term relationships between the co‐integrated series to be statistically significant. Price adjustments in all co‐integrated prices were found to be symmetric.     

Imperfect Price Transmission: Is Market Power Really to Blame?

Several studies in the literature have argued that price transmission in vertically‐related markets is imperfect, i.e. that farm input price changes are not fully passed‐through to the final product price. Market power, notably oligopoly, is presumed to be the principal source of imperfect price transmission. To date, the impact of oligopsony (buyer) power on the degree of price transmission has not been evaluated using a formal theoretical model. Moreover, neither has the combination of oligopoly and oligopsony despite the fact that its influence has been formally acknowledged in both the UK and some European food markets. This paper makes a contribution to the literature by developing a model of price transmission where both oligopoly and oligopsony power co‐exist and where industry technology is assumed to be characterised by variable input proportions. It shows that taking the degree of price transmission in a perfectly competitive market as a benchmark, oligopoly and oligopsony power do not necessarily lead to imperfect price transmission, although they can. Indeed, they may counteract each other's impact on the degree of price transmission. The key to these outcomes is to be found in the functional forms for retail demand and farm supply.     

巢湖虾蟹产业经济发展战略研究

虾蟹是我国重要的养殖品种,发展虾蟹产业对优化渔业经济结构,促进农渔民增收,保障市场有效供给都具有十分重要的意义。巢湖是安徽省乃至长江中下游地区水产品重要生产地,本文对巢湖虾蟹产业发展的现状与特点进行了阐述,并剖析了制约巢湖虾蟹产业发展的主要问题,提出必须从科技创新、产业结构、产品质量、组织化程度等方面采取措施,进一步做大做强巢湖虾蟹产业。     

Competition between farmed and wild salmon: the Japanese salmon market

This article examines the Japanese market for salmon. This market is of interest, since it is the largest and most diversified salmon market in the world with wild and farmed species, from Europe and South and North America, competing in the same market. In contrast to the European Union (EU)‐ and U.S.‐markets, there have been neither trade conflicts nor trade restrictions. The Japanese market can hence provide information about the impact of bringing substantial quantities of a new product into a market, and the effect of large‐scale aquaculture on traditional fisheries. In this article, market integration between wild and farmed salmon on the Japanese market is examined, using both bivariate and multivariate cointegration analysis. Tests for the Law of One Price are also conducted. The results indicate that the species are close substitutes on the market, and that the expansion of farmed salmon has resulted in price decreases for all salmon species.     

Impacts of price and productivity changes on banana‐growing households in Uganda

This article compares the effects of changing market prices and farm productivity on the welfare of banana‐growing households in the Ntungamo district of Uganda. A heterogeneous‐agent model is applied via a series of mathematical optimization problems, to simulate production and consumption responses of 70 farm households surveyed in 2006. Results show that a given increase in productivity has a greater impact on poverty alleviation than that same increase in market prices. Despite the effects of productivity gains being comparable across different types of household groups, price improvements primarily benefit the incomes of households who are involved in rural producer organizations, who are located closer to markets, and who sell at the market.     

Structural and productivity change in US agriculture, 1950–1982

This paper tests whether structural change in US agriculture is an important channel to TFP growth and evaluates the relative impact of (i) public research and education policies, (ii) private R&D and market forces, and (iii) government farm programs on structural change. We specify a structural econometric model, fit it to US state aggregate data, 1953–1982, and use the associated reduced‐form model to perform counter‐factual policy simulations. The findings include: structural change is a channel to TFP growth in both crop and livestock subsector, i.e. specialization, size, and part‐time farming do impact TFP, holding other variables constant. Public R&D and education have been at least as important as private R&D and market forces for changing livestock specialization, farm size, and farmers’ off‐farm work participation over the study period, but private R&D and market forces have been relatively more important for crop specialization. Changes in farm commodity programs had little impact on farm structure over these study period. Overall, we conclude that if public R&D and education policies had been unchanged at their 1950 values over 1950–1982, major structural changes in US agriculture would have occurred anyway. The forces of private R&D and market forces were at work, including a decline in the price of machinery services and agricultural chemicals, relative to the farm wage.     

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.     

中国对虾产业发展现状及国际竞争力提升对策

2010年中国对虾总产量持续位居世界之首,然而出口量和出口金额均小于同期的泰国;同时,出口单价也低于同期的越南,中国对虾生产与贸易面临着来自泰国、越南和印度尼西亚等国强有力的竞争。本项研究通过对我国对虾产业发展现状的考证,最后提出应建立对虾产业整合协调机制,提升对虾产业组织化水平,是提升中国对虾产业国际竞争力的有效手段。     

Are French consumers ready to pay a premium for eco‐labeled seafood products? A contingent valuation estimation with heterogeneous anchoring

Could the future French eco‐label for fresh seafood products find its place in the French market? This study employs a contingent valuation method to estimate French consumers’ willingness‐to‐pay (WTP) for eco‐labeled fresh seafood products. We exploit original data from a survey carried out in 2010, where 626 participants responded to a double‐bounded dichotomous choice model, through an ascending or descending bid system. Controlling for shift and anchoring effects in random effect probit models, we significantly improve estimation of WTP and its determinants for the three species studied (monkfish, lobster, sole), in particular when using heterogeneous anchoring. We show that WTP is positively correlated to respondents’ income, and also to their environmental concern, to living alone, to living far from the coast, and to trusting NGOs or public institutions more than producer organizations to implement an eco‐label. We also show that the mean price premiums do not differ between species. Finally, on average, the maximum premium consumers accepted to pay is approximately 10% of the product price.     

Agent‐based modeling for ex ante assessment of tree crop innovations: litchis in northern Thailand

This study uses an agent‐based model for ex ante assessment of agricultural innovations. The model builds on whole farm mathematical programming (MP) and extends the methodology with a spatial representation of the system, the heterogeneity of farm households and landscapes, and the interaction between farm households. We apply the model in a northern Thai watershed to study the potential of four innovations to increase the profitability of litchi orchards. Cost‐benefit analysis shows that each innovation would increase the profitability of litchi growing; however, the results of the agent‐based model show that at current price levels these innovations alone would not be enough to stem the decline in the area under litchis. The model was validated and the sensitivity of the results tested for variations in the irrigated water supply and liquidity. We report on how farmers responded to these results and discuss the implications for other areas in northern Thailand.     

Impact of trade liberalisation on dairy market price co‐movements between the EU,Oceania, and the United States

This study investigates the impact of trade liberalisation on the spatial price co‐movements between the dairy markets of the EU, Oceania, and the United States. We consider two main dairy products, namely butter and whole milk powder (WMP), and employ R‐Vines to assess the development of the tail dependence between the price series. We split the time span (i.e. 2000‐2017) in December 2007 to capture the change in the tail dependence as well as in the potential of each region to act as the central market. Our findings indicate that the EU acts as the central market for butter in both sub‐periods, whereas the EU succeeds Oceania in acting as the central market for WMP from the first sub‐period to the next. Further findings highlight slightly increasing tail dependence in the butter market and in the WMP market for the EU‐OCE and EU‐US pairs. However, the tail dependence for the WMP prices between Oceania and the United States weakens, in which we attribute to the 2013 Chinese ban on milk powder imports from Oceania.     

Farmers’ perceptions and management of risk in rice/shrimp farming systems in South-West Coastal Bangladesh

Farmers in Bangladesh face considerable risk due to fluctuations in biophysical and economic conditions, but the response to these risks is poorly understood. In particular, there is a need to better understand the endogenous management of risk in the rice/shrimp farming systems that have emerged in the inner coastal zone of Bangladesh. This paper draws on a case study of a typical rice/shrimp farming village in Khulna District to explore: (a) farmers’ perceptions of risks and their management responses, (b) risk-return trade-offs within small-, medium-, and large-farm households, and (c) the role of other farm and non-farm activities in mitigating risks to household livelihoods. Farm-level data were collected through a reconnaissance survey, a village census, household case studies, and a sample survey of 73 households. Representative farm budgets were constructed for the three farm-size classes. The key performance indicators calculated were gross margin (GM), net income (NI), and GM per workday of family labour. The riskiness of the rice/shrimp system was assessed for each farm type using farmers’ estimates of low, normal, and high yields and prices to specify triangular distributions. Cumulative distribution functions (CDFs) for GM, NI, and GM per workday were generated. A whole-farm economic analysis was also conducted to assess the relative contributions of different sources of income for each farm type. With access to saline water for shrimp farming in the dry season and fresh water for rice in the wet season, farmers have developed and progressively adapted an alternating rice/shrimp farming system that has minimised the trade-offs between the two crops and provides a good return to household and village resources for all farm types. The system is subject to significant production and market risks, especially the shrimp component. However, farmers have clearly perceived these risks and ameliorated them through a range of production, marketing, and management strategies. With these risk management practices, the rice/shrimp cropping system is economically viable, given the current variation in yields and prices. The greater risk associated with the shrimp component was offset by the renewed stability of the rice component over the past decade, and the risks of the whole cropping system were offset by other farm and non-farm sources of livelihood. Development interventions need to work with farmers to provide further options (suitable rice varieties, solutions to shrimp disease, improved village and transport infrastructure) if this resilience is to be maintained.     

The role of retail market power and state regulations in the heterogeneity of farm‐retail price transmission of private label and branded products

Given the leading role of private label brands in the fluid milk market, it is of special interest to focus on possible differences in farm‐retail price transmission between private label and branded milk as well as the causes of heterogeneity. This article examines the heterogeneous effects of private label and branded products on price transmission in the fluid milk market using a panel threshold asymmetric error correction model. Results indicate that upward retail‐price adjustment is faster than the downward price adjustment for both private label and branded milk. The speed of adjustment of private label products is significantly faster than branded products in three different price regimes. We further investigate the reasons of heterogeneity in farm‐retail price transmission of private label milk. We find that both retailer market power and state pricing regulations contribute to the heterogeneity in asymmetric price transmission. Higher retailer market power causes retail prices of private label milk to rise faster and to fall slower. The existence of a state pricing regulation slows down the adjustment speed of retail prices of private labels back to the long‐run equilibrium, regardless of whether the retail price is low or high.     

我国对虾产业国际竞争力综合评价研究

20多年来,对虾产业的发展在各养殖国都取得了令人瞩目的成就,为全球粮食安全、食物供给、经济增长、国际贸易平衡、就业等做出了巨大贡献,对虾也成为国际贸易中最重要的水产品。如何衡量各国的对虾产业国际竞争力水平高低,并提出针对性的对策,是一个重要的问题。论文选取目前世界上最大的五个对虾出口国的现实数据进行实证分析,运用主成分分析方法,得到各国的对虾产业国际竞争力评价值,并根据评价结果对我国提升对虾产业国际竞争力提出了建议。     

Product Differentiation and Cost Pass‐Through

The present paper extends the existing literature on vertical price transmission and cost pass‐through by investigating the impact of product differentiation. We apply distance‐measures of product differentiation to a specific product market (yoghurt) within one country (Germany). Results from a panel‐error‐correction model for 30 products sold in 432 stores over a period of 312 weeks suggest that product differentiation explains a significant share of differences in cost pass‐through rates: more differentiated products command higher prices and are characterised by lower equilibrium cost pass‐through rates as well as more sluggish price adjustment.     

Market‐orientated Positioning of On‐farm Processed Foods as a Condition for Successful Farm Diversification

Farm diversification is stimulated within the reform of the common agricultural policy. On‐farm processing and direct marketing are options, but farmers often lack a marketoriented approach. This paper illustrates the problem by presenting a consumer survey regarding on‐farm processed yoghurt. Conjoint analysis is used to define the most preferred yoghurt in different market segments. Results of the price sensitivity meter are similar to the conjoint analysis. Farmers' price setting is not always adequate, which means that opportunities and additional income are lost. Providing the necessary assistance in collecting market information and commercial training is essential in obtaining sustainable benefits from on‐farm processing and direct marketing.     

Measurement of greenhouse gas emissions from agriculture: economic implications for policy and agricultural producers*

If agriculture were to be included in Australia’s carbon price scheme, a key decision for government would be how to estimate greenhouse gas emissions. We explore the consequences of three different methods for measuring on‐farm emissions: national accounting methods, an amended version of those methods and use of best‐available local data. Estimated emissions under the three methods can vary widely; for example, on a case study farm in Western Australia, local data indicated 44 per cent lower emissions than did the national accounts method. If on‐farm emissions are subject to an emissions price, the impact on farm profit is large and varies considerably with different measurement methods. For instance, if a price of $23/t of CO2‐e applies then farm profit falls by 14.4–30.8 per cent depending on the measurement method. Thus, the choice of measurement method can have large distributional consequences. On the other hand, inaccurate measurement results in relatively minor deadweight losses. On‐farm sequestration through reafforestation may lessen the impact of an emissions price on farm businesses, although it will require a high carbon price to be viable, especially if sequestration rates are underestimated or low.     

Sales location among semi‐subsistence cassava farmers in Benin: a heteroskedastic double selection model

In much of rural Africa, high transaction costs limit farmers’ market participation and thus their potential for income growth. Transaction costs can affect not only whether a farmer sells product but also whether sales occur at the farm gate or at a market. If production behavior is related to a chosen sales location, then analysis of interventions can be improved by explicit consideration of the decision of where to sell. This article develops a double‐selection model that explains consumption and production decisions by semi‐subsistence farmers who first decide whether to be a seller and then whether to sell at the farm gate or at an off‐farm location before deciding on production and consumption. The study tests the validity of this dual‐criteria model against a single‐criterion model in which a grower first decides to be a seller and then decides production, consumption, and sales location simultaneously. The results suggest that the dual‐criteria model provides more information than the single‐criterion model using a sample of cassava producer in Benin.     

Farm-gate tomato price negotiations under asymmetric information

This article provides an empirical analysis of farm‐gate tomato price negotiations under asymmetric information. Regression models are estimated to analyze when and by how much sellers stick to their initial ask prices and what explains the variation in the initial ask–offer price spread. Detailed information on 66 farm‐gate tomato transactions and daily tomato wholesale price data from the central vegetable market in Addis Ababa are used for the analysis. Estimation results show that farmers are less committed to their initial ask price when the buyer speaks out the transaction price first, when their quality perceptions of the tomatoes being transacted differ from those of the buyers, and when their tomato farm is at a large distance from the main road. Sellers stick more to their initial ask price when they know that the central market price is high. The initial ask–offer price spread decreases when the buyer speaks out the initial negotiation price first, but increases in the difference in quality perception between buyer and seller, and in the quantity of tomatoes being transacted.     

The Role of Index Trading in Price Formation in the Grains and Oilseeds Markets

We use both Granger‐causality and instrumental variables (IV) methods to examine the impact of index fund positions on price returns for the main US grains and oilseed futures markets. Our analysis supports earlier conclusions that Granger‐causal impacts are generally not discernible. However, market microstructure theory suggests trading impacts should be instantaneous. IV‐based tests for contemporaneous causality provide stronger evidence of price impact. We find even stronger evidence that changes in index positions can help predict future changes in aggregate commodity price indices. This result suggests that changes in index investment are in part driven by information which predicts commodity price changes over the coming months.