Production Efficiency of Specialized Swine Producers

This research provides an efficiency evaluation of swine firms by specialization type providing estimates of technical, allocative, scale, and overall efficiency separately for farrow-to-finish, farrow-to-feeder, feeder-to-finish, farrow-to-weanling, and weanling-to-feeder operations. Results indicate variation in efficiency measures both across and within operation specializations. This suggests optimal adjustments for enhancing efficiency may not be homogeneous across the industry and may vary across specializations. The analysis also implies that future analyses of the swine industry must carefully and individually consider the diverse specializations comprising the industry. These findings are important in further understanding the rapid change occurring in the swine industry in the form of increased production specialization.     

Land Cover in a Managed Forest Ecosystem: Mexican Shade Coffee

Managed forest ecosystems like shade coffee supply valuable ecological services. Yet little is known about the drivers and characteristics of clearing in such systems. We present a spatial econometric analysis of land cover in a shade coffee region in southern Mexico. We find that plots close to large cities are less likely to be cleared all other things being equal—the opposite of the pattern usually observed in natural forests. In addition, we find that membership in coffee-marketing cooperatives, farm size, and certain soil types are associated with tree cover, while proximity to small town centers is associated with clearing.     

Capitalisation of the SPS into Agricultural Land Rental Prices under Harmonisation of Payments

As the 2013 Reform of the Common Agricultural Policy (CAP) calls for the harmonisation of Single Payment Scheme (SPS) payments, we estimate the implications of this mandate on agricultural land rental rates over time as Germany began harmonising payments in 2010. Using Bavarian farm‐level panel data we find strong capitalisation effects that increase substantially in the years following 2009. On average, the marginal effect on rental rates of an additional SPS euro is 37 cents, growing over time to 53 cents as harmonisation develops.     

Estimating multiproduct and product‐specific scale economies for agricultural cooperatives

This article estimates multiproduct and product‐specific scale economies, scope economies, and cost efficiency with single and annual cost frontiers using a nonparametric approach. Multiproduct scale and scope economies are found that suggests increasing scale and product diversification can reduce cost for agricultural cooperatives. Many agricultural cooperatives experience economies of scale indicating that variable returns to scale as opposed to constant returns to scale is the appropriate technology for modeling agricultural cooperatives. Product‐specific scale economies for all outputs are close to one indicating that individual outputs are operating close to constant returns to scale. Annual frontier estimates show that cooperatives have become less cost efficient over time, but scale and scope economies remain relatively consistent across years. Further, results show that economic measures obtained from the single frontier are statistically different from those measures calculated from annual frontiers, suggesting that the cost frontier has shifted over time. The trade‐off between cost efficiency and multiproduct scale economies indicates that smaller cooperatives can reduce a higher percentage of cost by increasing the scale of operations rather than just becoming cost efficient. Because larger incentives exist for small cooperatives to increase scale, mergers will likely continue until economies of scale are exhausted in the industry.     

Quality investing in Asian stock markets

We examine two quality investing strategies using gross profitability (GP) or FSCORE, respectively, over the period of 2000–2016 in Hong Kong, Japan, Korea, Singapore and Taiwan stock markets. We find that the high-quality stocks generally earn positive returns in these markets. Both FSCORE and GP are significantly positively associated with subsequent stock returns in the cross-sectional regressions. We also find that financial institutions as sophisticated investor concern about stock quality. The actively managed institutions buy significantly more high-quality stocks than low-quality stocks in each of five Asian markets. The trading pattern is not significant in passively managed institutions.     

Trade signing in fast markets

This study assesses the accuracy of trade signing algorithms in fast trading environments using NASDAQ and NYSE trade and quote data. Using data that contain true trade signs, we show that the Lee and Ready algorithm outperforms the tick rule and classifies trades at least as well as in earlier studies from slower trading environments, even in subsamples where the market is particularly fast. We conclude that trade signing remains viable in fast markets, and that the use of quote data continues to increase trade classification accuracy.     

Distortions to agricultural incentives: Evidence from Nigerian value chains

Understanding how policies affect price transmission and incentives for producers and consumers along the complete value chain is a relevant research question due to the more globalized structure of agricultural value chains. In particular, Nigerian agricultural value chains have been targeted by a number of policy decisions. We analyze the import‐oriented palm oil value chain and the export‐oriented cacao value chain, estimating the price distortions from policies and their implications for production incentives at the regional level. For palm oil, due to protective trade policies and domestic initiatives, the nominal rate of protection (NRP) at the farmgate for palm oil producers shows that producers have been protected. NRPs at the border for cacao beans and cocoa products are negative, which may be due to a quality gap, the export market structure, and the concentration of buyers in global markets. Negative NRPs at the farmgate are seen for all regions, showing disincentives in the cacao beans export market reverberate through the domestic market despite domestic support policies. In both value chains, NRPs at farmgate vary across regions partially due to regional policy frameworks and partially due to local conditions impacting price transmission.     

Young millennials,environmental orientation,food company sustainability,and green word-of-mouth recommendations

Threats loom for the global food supply. Food companies are taking action, yet consumer awareness lags. A sustainability materiality (SM) index was created that asked young millennials if issues related to a food company’s environmental footprint, ethical governance, community engagement, and nutrition-related actions influenced their product purchasing decisions. In comparison to their peers, those who held new ecological paradigm-related values were more likely to report that the SM index issues influenced their purchasing decisions. They offered more green word-of-mouth (WOM) recommendations to their friends. Regardless of their environmental orientation, those who purchase products consistent with the SM index are more likely to provide green WOM recommendations. Purchasing products consistent with SM index issues mediated the relationship between proenvironmental orientation and green WOM recommendations. Perceived personal ability was unrelated to green WOM recommendations. Educating and enlisting young consumers to offer green WOM recommendations will increasingly become a strategic business concern.     

Are Kansas farms profit maximizers? A stochastic additive error approach

Profit maximization is widely assumed as a behavioral objective in agricultural economics research. This paper applies deterministic and stochastic tests to examine adherence of a sample of Kansas farms to the profit maximization hypothesis. A modification of Varian's stochastic method is developed to account for farms that have zero netput. Results indicate that none of the farms satisfy the joint hypothesis of profit maximization and nonregressive monotonic technological change under the deterministic case. Results support the existence of nonregressive technological change during the study period for the sample of Kansas farms. Using a rejection criterion of 10% for measurement error in quantity data, most of the sample of Kansas farms (81% based on the additive error model and 92% based on the proportional error model) adheres to joint hypothesis of profit maximization and nonregressive monotonic technological change. The consistency with profit maximization is stronger for those farms that do not enter and exit in the production of an output.     

Estimating the effect of monopsony power on elasticity estimates

Love and Shumway (1994) developed a nonparametric deterministic test for monopsony market power using a normalized quadratic restricted cost function with one input for which the firm has potential market power. This research examines monopsony power using Lau’s Hessian identity relationships based on the empirical properties of duality theory. Lau’s Hessian identity shows the Hessian matrices are equal under pure competition using an unrestricted profit function, restricted profit function and production function approach. We examine how market power changes in the monopsony case using Lau’s Hessian identity relationships. Results show that there is a difference between the unrestricted and restricted profit function results under monopsony power. The important implication is that if an input or output is potentially in a market subject to market power, that input or output should be modelled as a fixed input or output to correctly recover the underlying technology.