Abstract We develop a spatially‐explicit model of the U.S. beef packing industry to study key questions related to competition in an oligopsony setting. Cattle supplies are modeled at the county level, and packing plants' location, capacity, and ownership are taken as given. Packers procure negotiated cattle by competing in prices in each local (county) market, while accounting for transportation costs and pre‐existing contracted supplies (alternative marketing arrangements). The model, calibrated to match observed 2022 data, is solved for the Bertrand–Nash equilibrium prices. The computed markdown in the price packers pay for fed cattle is decomposed into three components: the portion due to the inherent spatial oligopsony power; the amount due to an aspect of market concentration (firms owning multiple plants); and the component due to contracting. We find that markdowns are moderate, about $3.69/cwt or 2.6% of the fed cattle price, on average. About 54% of this markdown is due to the spatial configuration of plants, 40% is due to pre‐contracted supplies, and only 6% of the markdown is attributed to multi‐plant ownership by firms. Separately from markdowns, capacity constraints are found to lower fed cattle prices by 0.8% on average. Beyond the baseline, simulated counterfactual scenarios highlight specific policy‐relevant questions. Markdowns are reasonably robust across counterfactuals, decreasing only modestly when plants operate independently or the use of contracting is limited. Across all counterfactual scenarios, cattle prices per se are most affected by tightening capacity constraints (as arising from a major plant closure or an upward swing in the cattle cycle).

Abstract Farm delinquency is linked to many negative indicators of farm survival, including increased risk of bankruptcy and farm failure. Minority farmers and ranchers (MFR) have been found to exhibit higher rates of delinquency on U.S. Department of Agriculture (USDA) Farm Service Agency (FSA) loans compared to their non‐Hispanic White male counterparts. These findings persist even after accounting for economic/financial factors expected to predict loan repayment performance. In this study, to further explore the existing discrepancy between loan default rates for MFR and White, non‐Hispanic borrowers, we look more broadly than financial indicators and introduce MFR representation on the FSA County Office Committee (COC) as a proxy for the local cultural climate in an agricultural community. Using changes in COC membership demographics over time and across counties, this study suggests that MFR representation on the COC is associated with a lower probability of MFR delinquency by roughly 10 percentage points. With the probability of delinquency also being about 10 percentage points higher among MFR, the effect represents a significant improvement in loan repayment outcomes for the group. The FSA COCs represent an important linkage between the USDA and the local agricultural community. Moreover, elected minority representation on COCs can be considered as indicative of supportive cultural climates for minorities in agriculture. Given that COC membership composition may represent a proxy for local cultural climate in agriculture, this research raises interesting questions about the potential relationship of MFR representation and community engagement, to FSA program performance.

Abstract We explore ethnic and gender disparities in U.S. agriculture by comparing productivity gaps between male‐ and female‐headed family farms, and between non‐Hispanic White and minority‐headed family farms. Using Agricultural Resource Management Survey data from 2017 to 2020, propensity score matching techniques are applied to obtain comparable samples based on observable covariates. Statistical tests reveal structural differences in production technologies between male‐ and female‐headed farms, and between non‐Hispanic White and minority‐headed farms, thus requiring the estimation of separate production technologies for each group. Accordingly, a stochastic metafrontier framework is used to envelop the group frontiers and assess technology gaps. The results indicate that female and minority‐principal operators not only use different production technologies but are also less proficient at combining inputs to maximize farm output. The results also reveal within‐group gender and ethnic differences—ceteris paribus, among non‐Hispanic White and minority‐led farms, female producers generated substantially less output compared to their male counterparts. Similarly, among male principal operators, Hispanic producers generated more output compared to their non‐Hispanic White and non‐Hispanic non‐White counterparts.

Abstract Habits are key determinants of consumer behavior across a range of domains, such as food consumption, brand selection, transportation choice, technology usage, and health‐related behaviors. Habits may also affect consumer responses to exogenous shocks, including changes in policies targeted at consumers. Adequately defining and measuring habits is therefore important for both understanding and predicting consumer behavior. In this paper, we develop a habit index that is based on regularity of observed purchases. Our index is suitable for comparing habitualness across product groups and types of households. We estimate the index using Danish home‐scan food purchase data and find that across product groups, habitualness is higher for breakfast foods and products with short shelf lives. Across households, habitualness decreases with household income and is higher for households whose main shopper is male. We also examine how habitualness affects price sensitivity and responsiveness to Danish fat and sugar taxes. We find that habitual consumers are less sensitive to general price fluctuations, but more responsive to tax changes.

Abstract Sandstorms, exacerbated by global warming and distinct from industrial sources of air pollution, have significant detrimental effects on various socio‐economic factors. However, evidence of their impact on agricultural production and the adaptation strategies employed by farmers remains limited. This paper estimates the impacts of sandstorms on crop yields and examines the associated adaptation strategies. Using data from 288 counties in China's winter wheat production regions spanning 2000 to 2007, we uncover a substantial 14.8% reduction in winter wheat yields in northern China due to sandstorms. Each additional hour of sandstorm during the winter wheat growing season corresponds to a 1.4% decrease in yield. Household‐level data further reveal that sandstorms not only threaten food security by reducing crop yields, but also lead to a significant decrease in planted areas. Furthermore, we find that farmers increase their investments in fertilizer and labor as adaptation measures to mitigate the negative impacts of sandstorms on crop yields. Our results suggest that timely irrigation following a sandstorm, especially in areas with less precipitation, can effectively mitigate its adverse effects, offering valuable insights for reducing the economic impact of sandstorm events. These findings underscore the need for adaptive strategies to safeguard agricultural productivity in the face of increasing sandstorm risks, offering valuable insights for policymakers and stakeholders engaged in agricultural resilience planning.

Abstract We compare the impact of two extension modalities on knowledge accumulation and willingness to pay for a weather index insurance product among smallholder farmers in Kenya. One approach to extension is based on experiential learning and involves participation in an incentivized framed experiment (or game). The other is based on conventional “narrative‐based” learning. While both modalities increase farmer knowledge, incentivized gamification causes more learning. We also find that experiential learning affects follow‐up demand for the insurance product, which is not true for narrative‐based learning. Interestingly, demand for insurance shifts inward after playing the insurance game. This reduction in demand is mainly caused by increased knowledge about the insurance product, but we also present suggestive evidence that experiencing basis risk during the game was more salient than theory‐based learning about basis risk. Game‐based learning is an effective approach to promote knowledge accumulation and may accentuate or attenuate adoption of innovations by updating ex‐ante , possibly biased, expectations.

Abstract We estimate the effects of result‐based agri‐environmental payments on biodiversity using a unique dataset containing information about plant vegetation. The data include information on surveyed plant species for a large number of randomly selected plots followed over a period of 20 years in Switzerland. In our estimation, we utilize a difference‐in‐discontinuities approach based on exogenous variation in payments triggered by (i) a policy reform in Switzerland that led to a considerable increase in payments that was uncertain prior to the implementation and (ii) an administrative threshold of reform that defines eligibility for payment depending on the botanical quality. We find that the increase in result‐based payments led to an increase in the biodiversity of plots that were almost eligible for the payments before the reform but not for plots that already satisfied the eligibility criteria. Our findings have important implications for the design of result‐based payments.