High Plains Ag Lab Rotations Show Fallow Still Works in Western Nebraska

The High Plains Ag Laboratory (HPAL) in Sidney, Nebraska is the dryland research site for the University of Nebraska located in the Panhandle. In addition to the typical small plot agriculture experiment areas, there is a significant dryland production area. There are a total of 718.5 acres in production, divided into 27 individual fields, ranging from the smallest unit at 19.7 acres to the largest at 36.7 acres. Within these fields there are presently seven different crop rotations, each with winter wheat as the base crop, including everything from the traditional wheat-fallow system to a continuous cropping system.

Co-Product Prices May Be Nearing Seasonal Low

The supply of corn milling co-products from ethanol production has increased rapidly over the last several years. Based on United States Department of Agriculture (USDA) projections of corn ground for ethanol production, approximately 38 million tons of distillers grains would have been produced in the 2009-10 marketing year, with 40 million tons projected for the 2010-11 marketing year. While supply has grown, so too has demand from both domestic and international users. Cattle feeders in particular have found wet distillers grains plus solubles (WDGS), modified wet distillers grains plus solubles (MWDGS) and dried distillers grains plus solubles (DDGS) to be excellent feedstuffs that can lower cost of gain through performance efficiencies and lower ingredient costs. United States swine and poultry producers have also increasingly adopted DDGS in rations in response to higher corn prices, while international shipments of DDGS have also grown.

Making an ACRE Decision for 2009

The initial sign-up period for 2009 farm commodity programs and the choice between the new ACRE (Average Crop Revenue Election) program and the existing DCP (Direct and Counter-Cyclical Payment) program is quickly winding down. But as the current August 14 deadline approaches, producers know more and more about the potential safety net provided under the ACRE program, and have a better opportunity to analyze the economics of choosing ACRE versus the DCP program before visiting their USDA Farm Service Agency (FSA) office.

Nebraska Panhandle Connects with German Institute on Agri Benchmark Project

In the Spring of 2009, the University of Nebraska Panhandle Research and Extension Center was contacted by a representative from the Institute of Farm Economics at the Johann Heinrich von Thunen Institute (vTI) in Braunschweig, Germany. In the initial meeting, a partnership was arranged to provide Western Nebraska irrigated economic data for the Agri Benchmark project operated by vTI, with the University of Nebraska receiving access to the worldwide data set that exists within the project. This relationship has grown over the past 18 months to include a number of other opportunities.

Measuring the Performance of Cooperative Equity Redemption Plans

Cooperatives differ from other businesses in that they are owned by their patrons and net margins are distributed to patrons on the basis of use instead of capital investment. For financing, cooperatives often rely on allocated equities from retained patronage refunds. Retained patronage refunds are noncash allocations of net margins reinvested in a cooperative by patrons. Under an ideal program of equity formation, equity is held by patrons in proportion to patronage. Each patron’s share of financing the cooperative is equal to the share of benefits received. Equities of former patrons are retired as active patrons take on more of the responsibility of financing the organization.

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Market report

New 2010 Crop Enterprise Budgets

The 2010 Crop Enterprise Budgets will soon be published. They will be available on the web in two places: the University of Nebraska’s “Crop Watch” website (http://cropwatch.unl.edu) in the Economics and Marketing section, and on the Agricultural Economics website at http://www.agecon.unl.edu.

Looming Changes in the Energy Economy

Over the next decade or two, the energy sector on which the world economy is based will undergo significant transformations. The fossil fuels on which the industrial revolution was built are on their way out. Nebraskans will face higher energy prices, but they will also produce more energy.

Three Counties Saw the Majority of Nebraska’s Housing Growth 2007 – 2008

According to estimates released by the Bureau of the Census in August, 2009, Nebraska’s total housing stock increased by 5,529 units between July 1, 2007 and July 1, 2008, an increase of 0.7 percent for the year. This represented an estimated rate of growth in housing stock slightly below the state’s estimated rate of population growth, which was 0.8 percent for the same time period.

The Myth of the Rational Market: Nudging Each Other Away from Fool’s Gold

A flurry of media commentary and several new books are focused on the recent financial crisis and near economic collapse. A Newsweek article by Zakaria (2009), “Greed is Good (To a Point),” suggests reconsidering the role of greed in capitalism. This is also the theme in Fools Gold (Tett, 2009), a story about the way derivatives markets have evolved: showing greed at its worst. In many ways this is the core source of the current set of problems. In some sense, these perspectives are integrated in The Myth of the Rational Market by Fox (2009), who traces the thinking on the efficient market hypothesis, now understood for what it is: a myth. Both books are based in large part on interviews with major players in the crisis. There are also books drawing mainly on science, but still quite accessible to general readers, as represented in Nudge by Thaler and Sunstein (2008). Both have done extensive research on human foibles in economic choice. There is also Animal Spirits (Akerlof and Schiller, 2009), a book about what Keynesian economics is really about, a look at human forces at work. Akerlof is a Nobel prize winner in economics, who before this has pointed to the problems with presuming rationality in real markets. Schiller is one of the few economists who predicted these events.

Baby Boomers: Will They Be Moving to Rural Nebraska?

Baby boomers are doing it again... breaking all the molds and playing havoc with trends. This time it is with migration. Baby boomers, those born between 1946 and 1964, are entering a stage of life when it is predicted that a significant number of them will be moving to rural areas; especially those areas with scenic amenities and low housing costs.

The Change from Red to White Meat: The Role of Technology

Since 1950, the composition of the U.S. meat diet has shifted markedly from red meats to poultry. For example, from 1970 to 1984, on a percapita basis, beef consumption has declined by 6.4 percent, while chicken and turkey consumptions have increased by 37.9, and 42.5 percent respectively (U.S. Department of Agriculture, 1985). The numerous studies of this phenomenon from the demand side (Chavas, 1983; Braschler, 1983; Nyankori and Miller, 1982; Moschini and Meilke, 1984; Wohlgenant, 1985, Thurman, 1987; Chalfant and Alston, 1988) have failed to achieve a consensus as to whether a change in taste contributed to this shift. One reason for the lack of consensus is that the very large price and quantity changes make it difficult to establish whether consumers are on a new indifference map. But there have been no comparable studies of the nature and causes of the technological change that has made these large consumption and price changes possible. A decrease in the relative price of poultry with respect to red meat is in any case a major explanation of recent shifts in meat consumption patterns. The main reason for such a decrease appears to be a higher rate of technical progress in the poultry industry than in the red meat industry. Substantial productivity gains in both the production and marketing of poultry over the last two decades appears to have been translated into lower retail prices for poultry. Although some productivity gains have taken place in the red meat industry, they have not matched the cost reductions in the poultry industry (Chavas, 1987). Thus, a consumption shift from beef to poultry could possibly be interpreted as a response to changing relative prices, the structural change having occurred in the meat industry. This would imply that, if the beef industry desires to maintain or expand its market, it should seek a decrease in the production and marketing costs of beef.