Three Agricultural Economics Faculty Honored at professional meetings earlier this month:
M. Cakir and J. V. Balagtas; AAEA Quality of Research Discovery Award
Dr. Joe Balagtas, along with former Purdue Agricultural Economics student M. Cakir, received the Quality of Research Discovery award from the Agricultural and Applied Economics Association for their article “Estimating Market Power of U.S. Dairy Cooperatives in the Fluid Milk Market.” The article, published in the American Journal of Agricultural Economics in 2012, addresses two important policy questions: How much market power accrues to dairy cooperatives? and What are the welfare implications of market power in U.S. milk markets? This paper sheds new light on how market institutions jointly influenced market power in fluid milk markets in the United States. This paper ties together three branches of the literature with rich histories in agricultural economics. The first branch is that of producer cooperatives, which were enabled by exemption from antitrust law granted under the Capper-Volstead act of 1922. The rich literature on farmer cooperatives dates back at least to Nourse’s (1922) seminal paper. The modern understanding of the economics of cooperatives is informed by the tools of industrial organization theory starting with Sexton (1986). The second branch is that of marketing order regulation, economic analysis of which dates to Kessel (1967). The third branch is the modern analysis of market power in agricultural markets, which stretches from Schroeter (1987). This paper brings together these three branches to advance understanding of fluid milk markets. A key finding is that while the estimated market power for dairy cooperatives is small (e.g., 0.0027 for the Northeast region), the fact that the derived demand for milk facing cooperatives is very inelastic allows cooperatives to exact markups of approximately 9%. The resulting estimate of annual income transfer from milk buyers to dairy farmers in the regions subject to FMMO regulations is approximately $636 million. Retail demand for fluid milk is also quite inelastic, but the estimated conduct parameter for processor-retailers is relatively small, so that the retail markup is less than 1%. The resulting estimate of annual income transfer from final milk consumers to processor-retailers is approximately $73 million.
Dr. Wallace Tyner: AAEA Distinguished Graduate Teaching Award
In recognition of his outstanding teaching and mentoring Dr. Wallace (Wally) Tyner received the Distinguished Graduate Teaching Award (more than 10 years experience) from the Agricultural and Applied Economics Association at their annual meeting earlier this month. Wally takes a highly rigorous approach to the presentation of the materials in his courses. Nonetheless, students flock to these courses because they recognize his ability to inculcate difficult course material. As a testament to Tyner’s approachability, patience and rapport with students, he is highly sought after as a mentor among Purdue graduate students. During his tenure at Purdue, Wally has supervised 21 Ph.D. dissertations and 30 M.S. students. Among the Ph.D. students, academic placements include University of Wyoming, University of Denmark, University of Tennessee, Renmin University, Clemson University, and Calpolytechnic State University, and non-academic placements include the USDA, Farm Credit, EPA, private companies, and the World Bank. Tyner served for years as the Head of the Department of Agricultural Economics at Purdue, and in that capacity he oversaw the admission and funding for the graduate programs. During Tyner’s tenure as Department Head the graduate programs grew substantially in terms of student numbers. In addition, Tyner was instrumental in leading curriculum development to improve the doctoral program and in establishing a collaborative program between our department and a management program to deliver an MBA degree to executives in the Agribusiness sector.
Kwamena Quagrainie and co-authors: CAES Honorable Mention for Publication of Enduring Quality Award
Dr. Kwamena Quagrainie, with co-authors J. Unterschultz and M. Veeman received Honorable Mention for the Publication of Enduring Quality award presented by the Canadian Agricultural Economics Society. Their article “Effects of Product Origin and Selected Demographics on Consumer Choice of Red Meats,” was published in the Canadian Journal of Agricultural Economics in 1998. This article has made a large contribution to the Canadian agricultural economics profession. In particular, it is one of the first applications of stated preference methods to food choice in Canada. The methodology applied in this paper has now become the standard for investigating new and innovative credence attributes of foods and different aspects of labeling as well as consumer responses to food production technologies, agricultural production practices and certification strategies.
Quagranie, Unterschultz and Veeman’s article has been cited 84 times according to Google Scholar and over 30 times in Scopus. More importantly, almost every subsequent study of this type in the CJAE cites this paper. Even 15 years after its publication, the stream of citations is regular and continuing. Beyond its methodological contributions, the article’s content has been important for the agricultural sector in Alberta and Canada. It’s led commodity groups to realize that sophisticated research designs could be used to answer complex marketing questions ex ante. And, in the province of Alberta, Quagranie, Unterschultz and Veeman’s study (and the slightly earlier one by the same authors) has provided the basis for significant collaboration with the meat industry. Finally, this was one of the first studies to import choice methodologies from resource economics and business schools in agricultural economics.