The Agricultural and Applied Economics research program is committed to providing the highest standards of excellence in research on all aspects of the economics of regional, state, and global production, distribution, and consumption of food and fiber goods and services, and public and private use of natural resources. Accomplishments/ impacts made possible by funding from the Legislative Appropriations Request include:
Economics of Precision Agriculture Practices. Evaluation of precision agricultural practices in the southern portion of the Texas High Plains has shown that widespread adoption of these technologies in corn, grain sorghum, peanuts and cotton production has the potential to increase regional net revenue by $50 million per year.
Profitability of Cotton Variety Selection. Adoption of indeterminate “picker”– type cotton varieties over determinate “stripper” – type cotton varieties can increase cotton producers’ gross margin by over $145 per acre.
Water Conservation Policy Efficiency. Recent research challenges the argument for managing groundwater as a common property resource, and suggests that a CRP type of policy would be superior to tax and quota-based ones to achieve water conservation goals.
Weather Forecasts and Wheat Grain Production. Wheat producers can improve net income by approximately $15 per acre by incorporating El Nino forecasts into their decision making process. If only 25% of the 650,000 acres of wheat in the Texas High Plains were managed by adopting the use of the forecast, the net result may be as high as $2.5 million in increased net income.
Risk Management and Water Conservation. Producers who are less risk-averse and who have declining water availability prefer subsurface drip irrigation systems that have less uniformity of water distribution. A shift from 5% flow variation to 27% flow variation can improve net present value of net income by up to $450 per acre.
Cotton Seed Demand and Outlook. High prices of feed-stocks and food products have pulled the demand for cotton seed to unprecedented levels. If trends continue, the share of cotton seed as a percent of total cotton farmer revenues could reach 40% or higher in the near future.
Global Cotton Demand Outlook. World cotton production and mill use is projected to increase by almost 25 million bales in the next 10 years, with trade increasing by about 20 million bales and world prices declining 1-3 cents/lb. below 2008/09 levels. U.S. share of world cotton exports is projected to decrease from 39% to 27% over the next 10 years.
U.S. – European Union Trade. The European Union market for U.S. sorghum has expanded rapidly in the last two years, outpacing traditional U.S. markets like Japan and Mexico. U.S. exports to the E.U. in 2007 and 2008 have grown to three and ten times the average 2000-2006 export level. Consolidation of the E.U. market will require improved U.S. competitiveness.
Free Trade And Cotton. When U.S. cotton apparel restrictions on imports from China expire on December 31, 2008, cotton apparel prices in the U.S. are expected to decline by as much as $.25/kg while U.S. cotton prices are expected to decrease by less than $.01/kg as a result.