Optimal control models of aggregate milk supply and demand behavior are used to describe the optimal phasing of the deregulatory dairy price support in the presence of supply growth. Producers are assumed to face costs of adjustment, and are myopic with respect to price expectations and the adoption of the new quasi-fixed factor augmenting technology.

North American agriculture is passing through yet another period of adjustment in markets, production levels, and government programs. The adjustment grows out of an enormous change in global food conditions after 1980. Nations that traditionally imported large amounts of foodstuffs begin to move toward greater self-sufficiency and nations that exported to them saw surpluses began to pile up in their warehouses. The burden of these shifts was not borne evenly by exporting nations. The United States experienced a dramatic downturn in its food exports while other nations, often using government subsidies to gain market share, went on increasing production and exports.

Canada and the United States are the world's largest trading partners. The total volume of two-way merchandise trade in 1985 was $165 billion Canadian ($124 billion U.S.). Canadian dependence on U.S. markets has grown to the point that nearly 80% of our exports are destined for our southern neighbor. By the same token, more than 70% of Canada's imports originate in the U.S. That volume represents 20% of total exports from the U.S., the largest proportion going to any individual country. Obviously, trade relations between Canada and the U.S. are very important to both countries. Indeed, given their combined role in total world trade, the importance of trade relations between them goes beyond whatever it might be to those two countries alone.

The technical efficiencies of New York dairy farms were estimated using a frontier production function. The average farm was 69 percent efficient. Individual farm efficiency was regressed on variables not considered inputs to explain why a farm was not on the frontier. Favorable location in the state and larger size (cows) as proxies for technology lead to greater efficiency. Participation in the Dairy Herd Improvement Cooperative and use of mail-in computerized records as proxies for management result in a reduction in efficiency. However, only 9 percent of variation in farm efficiency could be explained.

This article reports the results of research regarding the farm-level implications for New York dairy producers of national mandatory supply control programs for feed grains and milk. The analysis is based on the proposed Harkin-Gephardt Bill which would authorize a mandatory supply control program for milk and the major supported crops. Representative farm budgets were constructed for a sample of dairy farms to assess the possible effects on costs and returns. Some farmers would gain, while others would not. The results suggest that dairy farmers who purchase all of their feed would be worse off, while farmers who grow grain would be better off under the proposed supply control program.

This paper examines the possible use of information on the relative marginal costs of point and nonpoint source water pollution abatement to assess the efficiency implications of shifting a greater portion of the burden for water quality protection to nonpoint sources. The inherent uncertainty about the effects of changes in resource allocation for nonpoint pollution abatement on nonpoint pollution loads is recognized in the analysis. This uncertainty is shown to result in significant limitations on the use of marginal cost comparisons even when point and nonpoint pollutants are perfect substitutes.

The Tax Reform Act of 1986 was studied to determine its short-run impact on Pennsylvania farmers. For the 3,059 farms studied, the average increase in total tax obligation resulting from the TRA of 1986 was $446 per farm, or a 48 percent increase in federal income taxes actually paid in 1984. Differences in impact were found across farms categorized by commodity type. Egg producers were most severely impacted, while beef cattle producers least affected. In general, the increase in adjusted gross income was due to the loss of 60 percent exclusion on capital gain income.

Most econometric studies of the groundfish sector have suggested that either imports are not sensitive to U.S. prices, or that domestic prices are not much affected by imports, or both. Using a six equation model of the domestic fresh groundfish market we obtained contrasting results. For example, a 5.82 percent tariff of the type proposed by the U.S. International Trade Commission in 1986 would, if it applied to both whole fish and fillets, lower imports of fresh fish 3.7 percent and raise domestic ex-vessel prices 2.6 percent in the long run. The main reasons for the different results appear to be our inclusion of exchange rate effects and a more accurate measure of total fresh imports.

This article evaluates the performance of expected value and expected value-variance criteria in achieving risk efficiency in crop selection. Results indicate that the expected returns criterion achieves risk efficiency in many situations because of constraints. However, in the absence of many constraints the expected returns criterion performs poorly except when highly mean-dominant activities are present. The expected value-variance criterion achieves a high degree of risk efficiency for all situations examined. This result implies that criteria more complex than expected value-variance are not necessary for crop selection analysis, given empirical returns distributions.

This paper examines the forces that affected the Northeastern fresh tomato supply in the post-WWII period. A simultaneous equation model is developed which incorporates a composite price expectation model, supply response, and factors affecting regional price. Findings reveal that data are consistent with the Rational Expectation Hypothesis. Urban pressure played a major role in shifting supply response while shipments from competing areas had a modest impact on regional production or price. The positive elasticity of producers' revenue with respect to local production highlights the aggregate benefits of increasing yields.

Simulation was used to analyze the distribution of benefits from the 1981 and 1982 federal income tax legislation for farm types that exhibit various tax characteristics. The results indicate that distributional effects are largely attributable to the reduced progressivity of the tax rate schedule. The largest farms benefited relative to the smaller farms of all farm types. Intensive livestock farms and producers of perennial crops experience additional benefits relative to other farm types primarily because of the large reduction in useful life for tax purposes of specialized livestock facilities, orchards, and vineyards.

In increasing numbers, communities that rely on groundwater for drinking supplies have discovered contamination from agricultural pesticides and herbicides, road salt, underground fuel storage, and septic systems. A variety of short- and long-run remedies are available with highly uncertain outcomes. An appropriate technique for solving a benefit-cost problem of this type is a sequential decision framework using stochastic dynamic programming procedures for solution. The approach is illustrated here by means of an application to the problem of the recent contamination of the groundwater of Whately, Massachusetts by the agricultural fumigant EDB and the pesticide aldicarb.

The pure theory of international trade, in its most elementary form, is predicated on differences in resource endowments between different countries. It has been argued, most notably by the Swedish economist Bertil Ohlin, that the existence of such inter-country differences in resource endowments explain the comparative cost differences between the factors of production, and hence the prevalence of trade. In the mid 1950's though, W. W. Leontiev's findings with regard to the nature of U.S. trade gave rise to considerable controversy because of the paradoxical nature of the findings. In this paper, the findings of Leontiev are examined and the seemingly anomalous trade patterns of India and Japan are also explored. It will be seen that while the Heckscher-Ohlin Theorem (to be explained) still holds, resource endowments in themselves are never a complete explanation of trade patterns.

The structure of the never-regulated, less-than-truckload transport market for Florida ornamentals is examined using concentration ratios, and the Hirchman-Herfindahl, Rosenbluth, and E Indices. The results indicate that this market is not highly concentrated relative to all US markets or to regulated trucking markets. This suggests that the long run structure of the trucking markets where regulations have been relaxed will not be highly concentrated and that economies of size may not be large. It was also found that, despite characteristics favorable to own-account carriage, it plays a minor role in ornamentals transportation relative to in regulated markets. This is consistent with the hypothesis that avoidance of problems and costs related to regulated carriage can be an incentive for firms to adopt own-account carriage.

Canadian exports of fresh carrots to the United States have increased substantially in recent years. The depreciation of the Canadian dollar against the U.S. dollar has been a major factor. Canadian government subsidies also may have had an impact by accelerating the construction of cold storage facilities. These have permitted the marketing period to be extended. However, an analysis of costs and returns suggests that cold storage of carrots is commercially profitable. Storage capacity would probably have increased without government aid. The returns to storage and the change in exchange rates are the primary factors contributing to the expansion of Canadian exports.

Previous studies analyzing the U.S. food industry have used national data and/or have focused on a particular sector of the industry. However, regional differences in resource endowments, income opportunities and population distribution imply that the impact of changing economic environment will not be the same for all regions. A farm to retail multiproduct sectoral model for the Northeast food industry is developed and estimated. This regional approach is used to analyze the effects of changes in exogenous variables on the Northeast region's food production and consumption. Empirical results are presented in terms of intrasectoral flexibilities and elasticities. Selected results from other regions are also presented and compared with the Northeast results.

An analysis of Conservation Reserve Program contracts obtained during the 1986 sign-up periods indicates commodity program participants enrolled more acreage at higher costs than farmers not participating in other commodity programs. Significant differences also occurred between the various commodity program crops, reflecting the difference in benefits available for these crops.