Brief Summary of Minutes of Annual Meeting

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.