Annual/Termination Reports:

[11/11/1111] [11/11/1111] [12/19/2006] [09/13/2006]

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Report Information

Participants

Brief Summary of Minutes

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Publications

Impact Statements

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Report Information

Participants

Brief Summary of Minutes

Project Number: NC-1016

Project Title: Economic Assessment of Changes in Trade Arrangement, Bioterrorism Threats and Renewable Fuels Requirements on the U.S. Grain and Oilseed Sector

Period Covered: 1/1/2005  12/31/2005

Date of this report: 12/19/06

Annual Meeting Dates: 6/21/05 and 10/16/05

Participants: Alexander, Corrine (cealexan@purdue.edu) Purdue University; Allen, Albert (allen@agecon.msstate.edu) Mississippi State University; Conley, Dennis (dconley@unl.edu) University of Nebraska; Crooks, Anthony (anthony.crooks@usda.gov) Rural Development, U.S. Department of Agriculture; Eckhoff, Steven (seckhoff@uiuc.edu) University of Illinois; Fruin, Jerry (fruin001@umn.edu) University of Minnesota; Gallagher, Paul (paulg@iastate.edu) Iowa State University; Gauthier, Wayne (wgauthier@agcenter.lsu.edu) Louisiana State University; Hoffman, Linwood (lhoffman@ers.usda.gov) Economic Research Service, USDA; Houston, Jack (jhouston@agecon.uga.edu) University of Georgia; Kenkel, Phil (kenkel@okstate.edu) Oklahoma State University; Larson, Don (larson.4@osu.edu) Ohio State University; Lavoie, Natalie (lavoie@resecon.umass.edu) University of Massachusetts; Parcell, Joe (parcellj@missouri.edu) University of Missouri; Turvey, Calum (cgt6@cornell.edu) Cornell University; Wailes, Eric (ewailes@uark.edu) University of Arkansas; Wilson, William (bwilson@ndsuext.nodak.edu) North Dakota State University; Woolverton, Michael (mikewool@ksu.edu) Kansas State University; Yeboah, Osei (oyeboah@ncat.edu) North Carolina A&T State University.

Brief summary of minutes of annual meeting: http://www.lgu.umd.edu/lgu_v2/pages/reportMeet/5662_min.doc

Accomplishments:
Research on value added markets for corn, soybeans, rice and wheat focused on evolution in markets in response to: 1) development of genetically modified (GM) traits and issues of coexistence, 2) grain and oilseed supply chains, transportation and logistics, 3) renewable fuels. Research on GM and non-GM crops examined costs and risks of testing and segregation, identity preservation, traceability and valuing new traits when GM crops are produced and processed along with conventional varieties (coexistence). Variety selection, marketing, segregation strategies, contracting strategies and transportation systems were analyzed. Research on grain and oilseed supply chains analyzed adoption of ISO 9000 standards to attain greater internal operation efficiency, to access to new markets, and to meet customer requirements. Farmer buying behavior in agricultural input markets such as seed and fertilizer was investigated to understand input market segmentation, bundling of products, services and information. Logistics simulation models of wheat, soybeans, corn and rice were in various stages of development and use. The validity of using export unit values to test price discrimination in international grain trade was evaluated and found that the results might instead reflect product differentiation and/or other data aggregation problems. Research on renewable fuels was pursued with the development of transshipment models for corn and soybeans to assess the impacts of existing and planned ethanol and bio-diesel plants. Engineering economic models were also developed to examine economies of scale for both wet and dry corn milling to produce ethanol. The nature of grain pricing and extent of local competition in the vicinity of ethanol plants was studied to determine returns to farmers and costs to ethanol plants.

Research on responses to natural disaster and bio-terrorism has focused on the impacts of hurricanes, drought, and the response of grain and oilseed sector to potential bio-terrorist threats. A questionnaire was developed for review by the committee to survey agribusiness firms in the grain and oilseed sector regarding their preparedness for bio-terrorism. Spatial models of the grains and oilseed sectors are in development to be used to analyze impacts of a bio-terrorist attack on the grain and oilseed sector. An NRI competitive research grant was awarded to investigate bio-security preparedness using case studies.

Trade agreements and proposals including the NAFTA, CAFTA, and MERCOSUR regional trade agreements and the Doha WTO round negotiations were analyzed to determine impacts on United States grain and oilseed sectors in terms of economic welfare costs and benefits and various factors, such as exchange rates, that influence the success of trade agreements.

Impact:

The questionnaire developed to study agribusiness firm vulnerabilities to bio-terrorism, will be used to estimate of costs to firms and measures taken to safeguard against threats will provide baseline data that can be used by the grain industry and policy decision-makers to assess preparedness.

Transshipment logistics models being developed will have multi-faceted applications. They are and will be used to provide information to stakeholders regarding impacts of 1) trade agreements, 2) development of renewable fuels, and 3) natural disasters and potential bio-terrorist acts on the U.S. grain and oilseed sectors.

Research using economic engineering models provide information regarding efficient scale of ethanol and bio-diesel plants as planning and investment continues in the renewable fuels sector.

NRI Competitive Grant Developing Security of U.S. Commercial Grain Storage and Transportation Systems awarded to Rayas-Duarte, P; Kenkel, P; Adam, B.D.; and Phillips, T.W. Oklahoma State University. $50,000. 2004-2006.

Publications:
1. Fuentes, Porfirio, Albert J. Allen and Warren Couvillion, "Direct Estimation of Fast-Vessel Transportation Cost for Trading High-Value and Perishable Commodities between Southern U.S., Latin American, and Caribbean Regions: A Case Study," paper accepted for publication in the Southwestern Journal of Economics (2005).
2. Chowdhury, A.A. Farhad, and Albert J. Allen, "Impact of NAFTA on U.S. Corn Trade with Mexico," International Journal of Business and Economics, 2005, Volume 4, No. 1, Pp. 77-85.
3. Allen, Albert J., Joselito Estrada, and Saleem Shaik, "An Analysis of the Structural and Ownership Changes in the World Maritime Fleet", The World Trade Organization Impacts on U. S. Farm Policy Conference, June 1-3, 2005, New Orleans, Louisiana http://cnas.tamu.edu.
4. Allen, Albert J., Agro-Market Research and Data Analysis, Project Number 332219-B, Final Report Submitted to Agricultural Cooperative Development International/Volunteers in Overseas Cooperative Assistance (ACDI/VOCA), Washington, DC, October 11, 2005.
5. Allen, Albert J., Joselito Estrada, and Saleem Shaik, "An Analysis of the Structural and Ownership Changes in the World Maritime Fleet", paper presented at the World Trade Organization Impacts on U. S. Farm Policy Conference, June 1-3, 2005, New Orleans, Louisiana.
6. Estrada, Joselito K., Albert J. Allen, and Saleem Shaik, "Structural Change in the International Maritime Fleet: A Shift-Share Analysis," paper presented at the Maritime Administration Seminar, Texas A&M University at Galveston May 2005.
7. Allen, Albert J., "Marketing Research and Data Analysis" PowerPoint presentation made to the employees of the Ganja Regional Consulting Center, September 15, 2005, Ganja, Azerbaijan.
8. Allen, Albert J., "Marketing Plan," PowerPoint presentation made to the employees of the Ganja Regional Consulting Center, September 19, 2005, Ganja, Azerbaijan.
9. Allen, Albert J., "Export Documentation," PowerPoint presentation made to the employees of the Ganja Regional Consulting Center , September 20, 2005, Ganja, Azerbaijan.
10. Allen, Albert J., "Packaging and Labeling," PowerPoint presentation made to the employees of Ganja Regional Consulting Center, September 21, 2005.
11. Allen, Albert J., "An Overview of A Two Week Assignment in Azerbaijan", PowerPoint Presentation made at the Faculty and Graduate Student Seminar Series, Department of Agricultural Economics, Mississippi State University, October 7, 2005.
12. Myles, Albert E. and Albert J. Allen, "Evaluating the Benefits of Selected Agricultural and Rural Economic Development Policies," paper presented at the 2005 Professional Agricultural Workers Conference (PAWC), Tuskegee University, Tuskegee, Alabama, December 4-6, 2005.
13. Lavoie, N., 2005. "Price Discrimination in the Context of Vertical Differentiation: An Application to Canadian Wheat Exports." American Journal of Agricultural Economics, 87: 835-854.
14. Lavoie, N. and Q. Liu. "Pricing-To-Market: Market Segmentation or Product Differentiation?" -- Working Paper 2004-11, Department of Resource Economics, University of Massachusetts, Amherst. -- Food System Research Group, University of Wisconsin-Madison, Working Paper FSWP2004-03, November 2004.
15. Gallagher, P., Wisner, R. and Brubaker H. 2005. Price Relationships in Processors Input Market Areas: Testing Theories for Corn Prices near Ethanol Plants. Canadian J. Agric. Econ. 53(2005):117-139.
16. Gallagher, P., Brubaker, H. and Shapouri, H. 2005. Plant Size: Capital Cost Relationships in the Dry Mill Ethanol Industry. Biomass and Bio-energy 28(May 2005):565-571.
17. Gallagher, P. and Shapouri, H. 2005. USDAs 2002 Ethanol Cost-of-Production Survey. U.S. Dept. of Ag, Office of Energy Policy and New Uses, Agricultural Economic Report No. 841, July.
18. Gallagher, P. 2005. Ethanol Industry Outlook. Proceedings, 16th Annual Integrated Crop Management Conference, ISU Extension, Dec. 7-19, 2004.
19. Gallagher, P. and Otto, D. 2005. Iowas Ethanol Industry Situation. Iowa Renewable Fuels Assoc., Nov. 2004.
20. Wailes, Eric J. 2005. Rice global trade, protectionist policies, and the impact of trade liberalization. In Global Agricultural Trade and Developing Countries. Eds. M. Ataman Aksoy and John C. Beghin. World Bank. January, 2005.
21. Durand-Morat, A. and E. Wailes. Trade and protection: the case of GM rice adoption and acceptance. Paper presented at the 9th ICABR International Conference on Agricultural Biotechnology, Ravello, Italy, July 6-10, 2005. Available at: http://www.economia.uniroma2.it/conferenze/icabr2005/papers/Wailes an d Durand paper.pdf
22. Wailes, E.J. and A. Durand-Morat. 2005. Impacts of WTO Policy on U.S. Rice Policy. Selected paper presented at the World Trade Organization Impacts on U.S. Farm Policy Conference. New Orleans, LA. June, 2005.
23. Durand-Morat, A. and E.J. Wailes. 2005. General and Partial Equilibrium Analysis of the Impact of CAFTA on the U.S. Rice Sector. Selected Paper presented at the American Agricultural Economics Association Meeting. Providence, RI. July, 2005. at: http://agecon.lib.umn.edu/cgi-bin/pdf view.pl?paperid=16263&ftype=.pdf
24. Wailes, E.J, B. Watkins, R. Hogan, B Coats, M. Cochran. Estimates of Arkansas Agricultural Economic Losses in 2005. SP03 2005 Department of Agricultural Economics and Agribusiness, University of Arkansas, Fayetteville. at: http://www.uark.edu/depts/agriecon/Arkansas Ag Losses 2005.pdf
25. Hignight, J., E.J. Wailes, J. Popp, and J. Smartt. 2005. Economic analysis of on-farm reservoirs under alternative land tenure arrangements. Farm Management and Marketing Newsletter. December, 2005. University of Arkansas, Cooperative Extension Service.
26. Wilson, W., Koo, W., Taylor, R., and Dahl, B. 2005. Long-term Forecasting of World Grain Trade and U.S. Gulf Exports. Transport Research Record: Journal of the Transportation Research Board, No. 1909, p. 22-30.
27. Wilson, W., and Dahl, B. 2005. Railcar Auctions for Grain Shipments: A Strategic Analysis. Journal of Agricultural & Food Industrial Organization 3(2)Article 3, p. 1-27.
28. Hawes, C., Wilson, W., and Dahl, B. 2005. Value at Risk: Agricultural Processor Procurement and Hedging Strategies. AAE Rpt. #553. Dept. of Agbs. & Applied Economics, NDSU, ND Ag. Exp. Sta.
29. Wilson, W., Koo, W., Taylor, R., and Dahl, B. 2005. Fundamental Factors Affecting World Grain Trade in the Next Two Decades. AAE Rpt. #555. Dept. of Agbs. & Applied Economics, NDSU, ND Ag. Exp. Sta.
30. Huso, S., and Wilson, W. 2005. Strategic Analysis of Trait Commercialization in Genetically Modified (GM) Grains: The Case of GM Wheat. AAE Rpt. #559. Dept. of Agbs. & Applied Economics, NDSU, ND Ag. Exp. Sta.
31. Huso, S., and Wilson, W. 2005. Impacts of Genetically Modified (GM) Traits on Conventional Technologies. AAE Rpt. #560 and #560-S (Summary Report). Dept. of Agbs. & Applied Economics, NDSU, ND Ag. Exp. Sta.
32. Wilson, W., Henry, X., and Dahl, B. 2005. Costs and Risks of Conforming to EU Traceability Requirements: The Case of Hard Red Spring Wheat. AAE Rpt. #564. Dept. of Agbs. & Applied Economics, NDSU, ND Ag. Exp. Sta.
33. Wilson, W., DeVuyst, E., Koo, W., Taylor, R., and Dahl, B. 2005. Welfare Implications of Introducing Biotech Traits in a Market with Segments and Segregation Costs: The Case of Roundup Ready Wheat. AAE Rpt. #566 and #566-S (Summary Report). Dept. of Agbs. & Applied Economics, NDSU, ND Ag. Exp. Sta.
34. Wilson, W., Wilson W., and Dahl, B. 2005. Protein Demand in Hard Wheats. AAE Rpt. # 567. Dept. of Agbs. & Applied Economics, NDSU, ND Ag. Exp. Sta.
35. Conley, D. and Kerr, C. 2005. "Impacts of Hurricane Katrina on Corn Exports in the Mississippi Gulf Region". Invited written testimony for a Hearing before the Committee on Agriculture, House of Representatives, U.S. Congress. Serial No. 109-18, pp 80-84. Submitted by Congressman Tom Osborne, Oct. 26, 2005.
36. Conley, D. 2005 "Economic Assessment of Selected Terrorism Acts on the U.S. and World Corn Markets." Academic Symposium of the International Food and Agribusiness Management Association (IFAMA), Chicago, Illinois, 06/25/2005. URL: http://www.ifama.org/conferences/2005Conference/default.htm
37. Adhikar, M., K.P. Paudel, N.R. Martin, Jr., and W.M. Gauthier. 2005. Economics of dairy waste use as fertilizer in central Texas. Waste Management 25 (2005) 1067-1074.
38. Gauthier, W.M., K.P. Paudel, J. Westra and L. Hall. 2005. Abstract. Influence of Cost Share and EQIP Incentive Payments on Adoptions of Best Management Practices by Louisiana Dairy Farmers. J. of Agricultural and Applied Economics. 57(2): 509.

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MINUTES: NC-1016
July 26, 2006
Hyatt Regency Hotel
Long Beach, California

NAME
(Attendance)
INSTITUTION
E-mail Address
Allen, Albert Mississippi State University
(662) 325  2883 ALLEN@AGECON.MSSTAEDU

Alexander, Corinne Purdue University
(765) 494-4249 cealexan@purdue.edu
Bahn, Henry JH (A) USDA CSREES.
(202) 720-8143 hbahn@csrees.usda.gov

Conley, Dennis M. University of Nebraska dconley@unl.edu

Crooks, Anthony Tony (A)
USDA. Rural Development. Anthony.crooks@usda.gov

Fruin, Jerry University of Minnesota Fruin001@umn.edu

Gallagher, Paul Iowa State University paulg@iastate.edu

Gauthier, Wayne M. (S) Louisiana State University
(225) 578-2765 wgauthier@agcenter.lsu.edu

Houston, Jack University of Georgia
(706) 542-0753 jhouston@agecon.uga.edu

Kenkel, Phil (A) Oklahoma State University KENKEL@OKSTATE.EDU

Thompson, Sally (AA) Purdue University sallyt@purdue.edu

Turvey, Calum G. Cal Cornell University Cgt6@cornell.edu
Wailes, Eric (C) University of Arkansas ewailes@comp.uark.edu
Wilson, William Bill (A) North Dakota State University bwilson@ndsuext.nodak.edu

Yeboah, Osei North Carolina A&T State U.
(336) 334- 7056 oyeboah@ncat.edu
A = Absent AA = Administrative Adviser C= Chairman S= Secretary

Chairman Wailes called the meeting to order at 11:00 a.m. on Wednesday, July 26, 2006. The minutes of the October 16, 2005 meeting were approved by voice vote on a motion by Gallagher that was seconded by Houston. The following observations and announcements were made relative to logistics and committee membership:

(1) This meeting is being held in conjunction with the annual meeting of the American Agricultural Economics Association (AAEA). Joint meetings are a necessity for the work of this committee as a number of committee members only receive support for one professional trip per year. There is a growing concern that the states experiment stations are not funding the work of their regional committees to the extent that they have in the past.

(2) Donald Larson, the representative from Ohio, retired June 30, 2006. There is a need to determine if Ohio will provide another representative.

(3) The vice-chairman, Joe Parcell from Missouri, is primarily responsible for working with livestock and will no longer be available for working with this grain and oilseed marketing committee. To date, no one from Missouri has been named or is expected to be named to replace Parcell as a member of NC-1016.

(4) The next meeting of the committee is scheduled to be held in Washington, D.C. in conjunction with the Food & Agricultural Marketing Policy Section (FAMPS), March 2007. At that meeting, a mid-term election of NC-1016 officers will be held.

Conley identified the potential of expanding his linear programming model for assessing the impacts of natural or man-made disasters upon corn markets to include geographic based analysis of ethanol plants. In response to a question, Conley said that he used a rate-based function for reflecting transportation costs. Conley also indicated that he had updated his model to include 2004 data and that it would be published electronically as a bulletin.

Fruin observed that the problems associated with the production of soy-diesel from soybeans were not the same as the problems associated with the production of ethanol from corn. Fruin identified problems with Brazil. Fruin also observed that rail rates were under pressure to increase. Fruin also noted that no funding support had yet been received from the Minnesota Soybean Association and that the initial work addressed the effects of international shock events upon the demand and supply of Minnesota soybeans and not ethanol or soy-diesel production.

Plans for developing products out of the models developed by Conley and Fruin included presentations at the International Food and Agribusiness Management Association (IAMA) meetings. Conley observed that the majority of audiences only wanted to hear (1) problem statement, (2) scenarios, and (3) results under given scenarios. There was little interest in model algorithms.

Wailes asked how the models might contribute to the 2007 Farm Bill debates. Fruin noted that the emphasis was going to be on ethanol and that emphasis needed to be placed on the shift that was going to occur in regional corn and soybean production. This emphasis, however, was not currently a part of either the corn or soybean model.
Wailes noted that NC-1016 had an agreement with FAMPS to sponsor a national conference (Conference) in Washington, D.C. in March of 2007. Suggested dates were either the weeks of March 12-16 or March 19-23. The Farm Foundation has tentatively agreed to co-sponsor the Conference. The Council on Food, Agricultural and Resource Economics (C-FARE) and the AAEA office will be asked to assist in making logistical arrangements for hotel rooms and meeting spaces and conference registration. Thompson suggested that an effort be made to get the Waugh room at ERS for reasons of economy and efficiency. There is a need to contact James McDonald at ERS with respect to reserving this room, if FAMPS are in agreement.

Wailes indicated that there was a need to identify a set of invited speakers from the private sector and government sector. FAMPS wants at least one session addressing policy issues exclusively and a half-day for their business meeting either prior to or after the Conference. NC-1016 wants at least one session to address bio-terrorism and natural disaster responses. This will be a mutual effort. The following topics were identified in response to the question of what types of sessions needed to be included in NC-1016s portion of the conference:

1. Grain and oilseed transportation responses to natural disasters, bioterrorism and invasive species.
2. Futures prices and basis responses to disaster events.
3. Trade and welfare impacts of disaster events  alternative modeling approaches.
4. Behavioral/psychological responses to disasters
5. Disaster response and traceability.

In response to the question of what NC-1016 needs to accomplish from participation in this joint conference, Thompson observed that it needs to address the grain and oilseeds sector of the economy. The need to highlight the concentration on grain and oilseeds makes Kendall Keith a logical candidate for the Committees choice of a private sector luncheon speaker. Houston observed that we want as much exposure as possible. Thompsons suggested that conference participants should be solicited for contributions of research posters. It was recognized that papers from the research project committee would be expected.

There was discussion to make the conference papers and posters available in a Proceedings as a product of NC-1016. FAMPS gives a copy of its Proceedings as a take-away from their conferences as part of the registration fee. A NC-1016 Proceedings needs to be linked to the National Information, Management and Support Systems (NIMSS) and be included in AgEcon Search. Wailes suggested that an electronics Proceedings first be done followed potentially by an edited set of Proceedings in a book.

The deadline date for publishing a call for papers in the September/October AAEA Exchange Newsletter is August 10, 2006. Before that date, the following section leaders are to send descriptions of each of their sections to Wailes. Responses from authors will be due by October 30, 2006 with copies of the final papers to the section leader by February 1, 2006.

Fruin. Grain and Oilseed Transportation Responses to Man-Made and Natural Disasters.

Alexander. Pricing, Basis and Market Behavior Associated with Disaster Events

Turvey: Spatial Responses to Disasters (CGI and GTAP models)

Turvey: Behavioral and Psychological Responses to Bio-Terrorism

Houston: Disaster Response and Traceability.

Thompson advised of a need for coordination across the chairs of the above sections. Thompson also advised of the need to lock-in a facility by mid-September so that there will be adequate space. Turvey requested that people keep an open mind about concurrent sessions.

Thompson observed that FAMPS has had a number of funding organizations. She suggested that the Agricultural Marketing Service (AMS) be contacted. The Animal and Plant Health Inspection Service (APHIS) is also a likely agency to have an interest in this conference.

Thompson advised that NC-1016 will be evaluated by December 2006 and that there is a need to have minutes posted. It would also be well if the program for this March 2007 Conference with FAMS were to be posted. Thompson has a concern about the people who are identified as members of NC-1016, but who fail to show up for its meetings. Thompson and Alexander referred to Steven Eckhoff, an agricultural engineer at the University of Illinois, who has worked on traceability and with Dick Myers at Purdue as someone whom members of NC-1016 need to interact.

Allen indicated that the survey instrument should be ready for pre-testing by the end of August, 2006. He requested that all members review the proposed questionnaire and provide comments prior to August 31.

Wailes announced that elections for a new set of NC-1016 officers would be held at the March 2007 meeting in Washington.

Houston raised questions about the absence of incentives for people to participate on committees such as NC-1016. It was recognized that it was the committee structure that enabled university researchers to be involved with industry and government for purposes of information sharing and interchange. However, it was noted that there is little or no incentive for anyone to get involved in writing the proposals to maintain an on-going regional committee structure.

By voice vote, the meeting was adjourned at 2:00 p.m. on July 26, 2006.

Respectfully Submitted,


Wayne M. Gauthier, Secretary

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