Purdue Agricultural Economics Report

The Purdue Agricultural Economics Report (PAER) exists to serve and further the core mission of the department to engage with real world problems that are of value to stakeholders. The scholarship communicated in this publication will represent the department’s excellence in creative endeavor for new knowledge and its dissemination in the economics of agriculture and natural resources.

Recent Publication:

2022-08 PAER Purdue Farmland Values & Cash Rents Survey Results

August 10, 2022

The Purdue Farmland Value and Cash Rents Survey suggests Indiana farmland prices grew at a record pace between June 2021 and June 2022, exceeding previous highs set in 2021.

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Articles:

Publication Date: August 2022
Article ID: PAER-2022-22

Todd Kuethe, Associate Professor and Schrader Chair in Farmland Economics

Summary: Indiana farmland prices grew at a record pace between June 2021 and June 2022, according to the recent Indiana Farmland Value and Cash Rent Survey. Statewide, the average per acre price for top quality farmland increased by 30.9% to $12,808; average quality farmland increased by 30.1% to $10,598; poor quality farmland prices increased 34.0% to $8,631. Across all quality grades, farmland prices exceeded the previous highs set in 2021.
Publication Date: August 2022
Article ID: PAER-2022-23

Michael Langemeier, Associate Director of the Center For Commercial Agriculture and Professor of Agricultural Economics

Summary: A standard measure of financial performance most commonly used for stocks is the price to earnings ratio (P/E). A high P/E ratio sometimes indicates that investors think an investment has good growth opportunities, relatively safe earnings, a low capitalization rate, or a combination of these factors. However, a high P/E ratio may also indicate that an investment is less attractive because the price has already been bid up to reflect these positive attributes. This paper computes a ratio equivalent to P/E ratio for farmland, the farmland price to cash rent ratio (P/rent), and discusses trends in the P/rent ratio.
Publication Date: August 2022
Article ID: PAER-2022-24

Chad Fiechter, Ph.D. Student; Michael Langemeier, Associate Director of the Center for Commercial Agriculture and Professor of Agricultural Economics; James Mintert, Director of the Center for Commercial Agriculture and Professor of Agricultural Economics

Summary: Farmers purchase the majority of US farmland. The 2017 USDA Census of Agriculture reports more than 60% of farmland is owned by farmers. Farmers’ farmland value expectations are an important driver of farmland prices.
Publication Date: August 2022
Article ID: PAER-2022-25

Todd H. Kuethe, Associate Professor and Schrader Chair in Farmland Economics, Mohammad Haseeb Daudzai, M.S. Student and Pete Drost, M.S. Student

Summary: The recent rise in farmland prices has many market participants concerned of a potential farmland price bubble, where the prices exceed the true value of the asset.
Publication Date: May 2022
Article ID: PAER-2022-12b

Farzad Taheripour, Steffen Mueller, Hoyoung Kwon, Madhu Khanna, Isaac Emery, Ken Copenhaver, & Michael Wang

Summary: We recently reviewed the article published by Lark et al. (2022) in PNAS, detected various problematic assumptions, approaches, data, and results in that study. Based on our findings, we concluded that these authors overestimated GHG emissions of corn ethanol consumption due to the RFS.
Publication Date: May 2022
Article ID: PAER-2022-12a

Farzad Taheripour, Steffen Mueller, Hoyoung Kwon, Madhu Khanna, Isaac Emery, Ken Copenhaver, & Michael Wang

Summary: Lark et al. (2022) recently published “Environmental Outcomes of the US Renewable Fuel Standard” and addressed domestic land use change (LUC) of corn ethanol and associated greenhouse gas (GHG) emissions that are potentially caused by the U.S. Renewable Fuel Standard (RFS), as introduced in the 2005 Energy Policy Act and in the 2007 Energy Independence and Security Act (EISA). To do so,
Publication Date: April 2022
Article ID: PAER-2022-11

Dr. Nicole Olynk Widmar, Professor of Agricultural Economics

Summary: Dr. Nicole Widmar provides an update on the State of the Purdue Ag Econ Graduate Program.
Publication Date: April 2022
Article ID: PAER-2022-12

Yizhou Hua, Ph.D. Candidate; Holly Wang, Professor of Agricultural Economics; and Christine Wilson, Professor & Associate Dean at College of Agriculture

Summary: Purdue’s undergraduate students are willing to pay $1545 (31%) and $384 (7.6%) less for online and hybrid options respectively compared with the in-person study option, given the basic in-person tuition rate $5000 per semester at Purdue.
Publication Date: April 2022
Article ID: PAER-2022-13

Dr. Francisco Scott, Economist, Federal Reserve Bank of Kansas City

Summary: The supply chain in agriculture is dynamic. Dr. Scott provides a few examples of how to understand demand, supply, and competition in some parts of the supply chain.
Publication Date: April 2022
Article ID: PAER-2022-14

Pedro Antonio Diaz Cachay, Masters Student; Dr. Todd Kuethe, Associate Professor and Schrader Endowed Chair in Farmland Economics

Summary: We find that ERS forecasts for farm debt are unbiased, as the forecasts do not systematically differ from realized values. However, ERS forecasts are inefficient, as they over-react to new information.
Publication Date: April 2022
Article ID: PAER-2022-15

Hari P. Regmi, Ph.D. Student; and Todd H. Kuethe, Associate Professor and Schrader Endowed Chair in Farmland Economics

Summary: USDA baseline export projections exhibits downward bias. Projections of total exports and high value commodities are informative up to year four while bulk commodities export projections are informative up to year three.
Publication Date: April 2022
Article ID: PAER-2022-16

Haden Comstock, M.S. Student; Nathan DeLay, Assistant Professor

Summary: This paper finds that there may be a positive correlation between participation in the Federal Crop Insurance Program (FCIP) and time to adoption of certain Precision Agriculture Technologies (PATs).
Publication Date: April 2022
Article ID: PAER-2022-17

Mario Ortez, Doctoral Candidate

Summary: In the late 1700’s Thomas Malthus famously worried that food production would not keep up with population growth. Here in his own words: “The power of population is indefinitely greater than the power in the earth to produce subsistence for man” (Malthus, 2010). Thereafter, Fr. Gregor Mendel, O.S.A. laid the foundation of modern genetics, Louis…
Publication Date: April 2022
Article ID: PAER-2022-18

Zach Neuhofer, Doctoral Candidate

Summary: We decomposed consumer preferences for food labels, such as organic, into the impacts resulting from beliefs about health, taste, food safety, and animal welfare. We find consumers have a positive association with labels on chicken, and that health and taste perception are primary drivers of demand.
Publication Date: April 2022
Article ID: PAER-2022-19

Douglas Abney, M.S. Student; Brady Brewer, assistant professor of agricultural economics; and Nathan DeLay assistant professor of agricultural economics

Summary: We studied the presence of digital agriculture jobs in the agricultural job market and reflected on the economic impact of rural broadband connectivity on digital agriculture jobs.
Publication Date: April 2022
Article ID: PAER-2022-20

Chad Fiechter, Doctoral Student

Summary: USDA price forecasts for steers, barrows and gilts, broilers and turkeys are unbiased and efficient. However, the USDA milk price forecasters prefer to under-predict price movements.
Publication Date: April 2022
Article ID: PAER-2022-21

Carlos Zurita, Doctoral Candidate

Summary: The Trade Facilitation Agreement (TFA) is a novel á-la-carte agreement negotiated among members of the World Trade Organization. The TFA allows country member governments to choose only those provisions that they feel capable to be held responsible for. Hillberry and Zurita (2022) study the TFA’s cross-country commitment behavior and provide three main takeaways. Some TFA measures are perceived to be more difficult to implement than others. Countries with higher income levels are prepared to implement more measures. The content of commitments made is mostly explained by the number of commitments made. Although aid for trade facilitation helps, it may take decades for developing countries to fully implement the TFA.
Publication Date: February 2022
Article ID: PAER-2022-10

Megan N. Hughes, Ph.D. Student Agricultural Economics; Olivia Wyrick, Student Natural Resources and Environmental Sciences; Carson J. Reeling, Associate Professor; and Meilin Ma, Assistant Professor

Summary: A lack of regulation has led to variance in the quality of carbon offsets generated in carbon markets. Improved verification standards may help to improve the long-term sustainability of these programs.
Publication Date: January 2022
Article ID: PAER-2022-1

Larry DeBoer, Agricultural Economics Professor Emeritus

Summary: Uncertainty over the course of the pandemic and the response by workers and businesses to inflationary pressures are expected to be the determining factors in what is likely to be slower GDP growth in 2022.
Publication Date: January 2022
Article ID: PAER-2022-2

Author: Maria I. Marshall, Professor, Jim and Lois Ackerman Endowed Chair in Agricultural Economics

Summary: COVID-19 exposed how lack of childcare impacts households and employment.

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The Purdue Agricultural Economics Report is a quarterly publication written by faculty and staff from the Department Agricultural Economics at Purdue University.

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