Doctor of Philosophy / Department of Agricultural Economics / Jason S. Bergtold / The adoption of new technologies on-farm is affected by socio-economic, risk management behavior, and market factors. The adoption of cellulosic biofuel feedstock enterprises and conservation practices plays an important role in the future of Kansas agriculture. No set markets currently exist for bioenergy feedstocks and farmers may be reluctant to produce the feedstocks without contracts to mitigate uncertainty and risk. Adoption of conservation practices to improve soil productivity and health may be affected by risk considerations also. The purpose of this dissertation is to study how market mechanisms and risk influence Kansas farmers’ willingness to adopt cellulosic biofuel feedstock enterprises and conservation practices on-farm. The first essay examines farmers’ willingness to grow switchgrass under contract using a stated choice approach. Data were collected using an enumerated survey of Kansas farmers and analyzed using latent class logistic regression models. Farmers whose primary enterprise is livestock are less inclined to grow switchgrass. In addition, shorter contracts, greater harvest flexibility, crop insurance, and cost-share assistance increase the likelihood farmers will grow switchgrass. The second essay examines how farmers’ risk perceptions impact conservation practice adoption. Factor analysis of survey data was used to identify primary risk management behaviors of Kansas farmers. A multinomial logit model of conservation practice adoption incorporating these risk behaviors was developed. Estimation results indicate that different risk management factors may have no significant impact on practice adoption. Farmers may not consider certain aspects of risk significant in their adoption decision. The third essay examines the effect of different risk management behaviors on farmers’ willingness to produce alternative cellulosic bioenergy feedstocks under contract. Data were collected using a farmer survey with a set of stated choice experiments and analyzed using factor analysis and latent class logistic regression models. While farmers approach risk management differently, the risk management behaviors identified have no significant impact on farmers’ willingness to produce corn stover and switchgrass but have a negative impact on farmers’ willingness to produce sweet sorghum as a biofuel feedstock. These results may indicate that farmers are indifferent toward adopting new bioenergy cropping enterprises when traditional crop production is profitable and more certain.

Master of Agribusiness / Department of Agricultural Economics / Vincent Amanor-Boadu / The objective of the research is to understand the volatility of cotton acres and estimate planted acres based on the factors that drive volatility in the United States at a regional level. Estimating cotton acres is important so that demand for cotton seed and technology can be anticipated and the appropriate investments in cotton seed production can be made. Post Multi-Fiber Arrangement, the US cotton economy has entered a state of imperfect completion which makes cotton price, ending stocks and the relationship of cotton to other crops important in understanding volatility in cotton acres. Linear Regression, Random Forest and Partial Least Squares Neural Networks (PLS NN) were used to estimate cotton acres at a US and Regional Level. The modeling approaches used to estimate change in acres yielded similar performance for U.S. total, Southwest, and West. The PLS NN was slightly better for the Delta and Southeast, where more crop alternatives exist. Random Forest offered a different perspective on variable importance in all regions.

Master of Agribusiness / Department of Agricultural Economics / Bryan Schurle / Frito-Lay is part of the PepsiCo Family which makes some of the best known and top selling snack foods around. Frito-Lay is the dominant player in the salty snack category in the United States, with a 65 percent share of the market. Frito-Lay brands include Lay's, Ruffles, Tostitos, Sunchips, Fritos, Cheetos, and Doritos. The objective of the thesis is to analyze a potential project: installing a raw potato sorting system on a potato chip line. Part of the analysis will be to conduct a net present value analysis of the costs and benefits associated with the project. Currently the line runs with one full time employee that inspects the raw incoming potatoes for foreign matter and color. Recently, technology options are available that the company could add to the raw potato sorting function that could potentially reduce employee labor costs. This research project provides information regarding the system’s investment cost, maintenance requirements, labor savings, and finished product quality impact. As the business environment changes businesses must keep up with rapidly changing technology to be able to compete. A company that is able to compete will be able to survive in the market and sustain profitability. Capital expenditures need to be evaluated and adopted if they keep a company competitive or make a company more cost efficient. The analysis concluded that the investment of installing a raw potato sorting system would be profitable, earning a positive NPV and internal rate of return greater than Frito-lay’s cost of capital. I would recommend that Frito-Lay move forward with this investment.

Master of Agribusiness / Department of Agricultural Economics / Mykel Taylor / The agricultural commodity market has been experiencing previously unseen high prices in recent years. This new era of prices brings with it new challenges within agriculture for farmers and grain buyers within agriculture. This research explores the basis values of hard red winter wheat in Kansas and the elevator characteristics that provide a competitive advantage for elevators buying wheat in Kansas. This research explores hard red winter wheat basis values from elevators located around Kansas from 2002 to 2013. Two hundred twenty eight locations from around Kansas were used in the research. These locations provided the price data that was used for this research. The elevator characteristics used in the research were collected from the Kansas Grain and Feed Directory and the Burlington Northern-Santa Fe and Union Pacific railway companies. Five elevator characteristics were researched that may have a significant impact on an elevators basis. These characteristics are thought to provide a competitive advantage to the location in the form of stronger or narrower basis bids to the farmer, giving the farmer a higher price for his grain. The characteristics researched included elevator capacity, transportation capabilities, elevator terminal status, shuttle loading status, and cooperative or investor-owned business structure. Each characteristic was compared against their counterpart. For example, a location is either a shuttle loader or it is not. The research provides grain companies and farmers some data that they may find useful in marketing grain and setting basis levels in the ever changing and volatile market place in today’s grain industry.

Master of Science / Department of Agricultural Economics / Jeffery Williams / Ethanol has become an important source of energy for transportation purposes in the U.S. The majority of the feedstock for this ethanol is corn grain. The use of crop residues and perennial grasses has been proposed as an alternative feedstock for ethanol production using cellulosic conversion processes. Commercial scale production of cellulosic ethanol is still on the horizon. In the meantime a wide variety of studies examining both the technical and economic feasibility of cellulosic ethanol production have been conducted. This is the first study that combines both county level cellulosic feedstock production and farmer participation rates to determine the feasibility of supplying it to cellulosic ethanol plants. This research determines the economic feasibility of supplying cellulosic feedstocks to seven potential add-on cellulosic ethanol plants of 25 million gallons per year at seven existing starch ethanol plants in Kansas. The feedstocks considered are corn stover, sorghum stalks, wheat straw, and perennial switchgrass. A mixed integer programing model determines the amount and mix of cellulosic feedstocks that can be delivered to these plants over a range of plant-gate feedstock prices given transportation costs and farm-gate production costs or breakeven prices. The variable costs of shipping are subtracted from the difference between plant-gate price and farm-gate price to find savings to the plant. The objective function of the model minimizes transportation costs which in turn maximizes savings to the plant. The role switchgrass may have as a feedstock given various switchgrass production subsidies is examined. The results indicate the minimum plant-gate price that must be paid to feedstock producers for all plants to have enough cellulosic feedstocks is $75 per dry ton. Switchgrass feedstocks were only a minor portion of biomass supplied and used without a production subsidy. A Biomass Crop Assistance Program payment increased the supply of switchgrass more than other production subsidies.

Master of Agribusiness / Department of Agricultural Economics / Mykel Taylor / Agriculture subsidization policies have a long history and have been criticized, reformed and heavily discussed multiple times over the last centuries. However, most countries in the world use farm subsidies as a policy instrument and spend billions every year. Especially highly developed and wealthy countries seem to have a tendency to subsidize production agriculture and the agricultural industry. The objective of this thesis is to improve understanding of the impact direct payments or subsidies may have on farm land values via farmers paying higher dollars for ground they rent and capitalization of those higher rents. Analysis is done by comparing the allocation of subsidy dollars from the Common Agricultural Policy on two wheat farms in Germany and Czech Republic, which are member countries of the European Union, to wheat farms in the United States and Australia, countries with relatively lower subsidy levels. Data for the farms include their cost structures, total revenues, and total direct payments. Comparisons of their relative land values and rental rates paid will provide evidence to test the hypothesis that direct subsidies are likely to increase land values. Based on the economic costs of production for the farms in Germany and Czech Republic, the value of land is not necessarily the residual claimant for the direct payments paid out through Europe’s Common Agricultural Policy. Possible explanations for this include restrictions on farmland use and farmland ownership structures held over in former communist countries where farms were owned by the state. These factors are likely to affect potential farmland owners’ perceptions of property rights and their willingness to pay a full market value for land.

Master of Agribusiness / Department of Agricultural Economics / Vincent Amanor-Boadu / The beef industry is a very important in the food sector of agriculture and over the past two decades the United States beef industry has faced many challenges. Over time the distribution of beef exports have changed due to food safety issues and government policies, not just in the U.S., but on a global scale forcing U.S. beef producers to diversify their export outputs to other countries that were not previously strong leaders in the export business. The U.S. must be strategic in their production decisions in order to continue to compete on a global level to avoid significant loss during adverse conditions. One of the major challenges that the U.S. industry has faced is the discovery of BSE in late 2003 in the state of Washington, which led to the closing of many borders to countries who had a significant impact on the beef industry in the U.S. Since U.S. beef is highly regarded by consumers for its quality worldwide, it is important to understand what changes have taken place in the past to have a full understanding of what changes need to be made in the future. The objective of this thesis is to look at how the distribution of the value, volume and price of U.S. beef exports have changed over the past two decades. By looking at how this has changed we will be able to see what countries are emerging as important customers and how others have declined. This is extremely important since some of the major importing countries have changed or put restrictions on the U.S. beef industry over the past two decades and the industry needs to understand these changes so that they can remain strong in the export sector. By analyzing the global trends of U.S. beef exports by value, volume and price across principal regions of the world, research will show us how to change for future changes. By assessing the effect of the discovery of BSE in the U.S on changes in the distribution of beef exports across the global regions, research will show who emerged when other countries declined. By using this research, the foregoing results will be helpful to inform the industry on what export market strategy can be developed for the U.S. beef industry. The results suggest that BSE had some negative effect on the U.S. beef industry in terms of the value and volume but did not have an impact on the price per pound of beef. Some regions had a larger impact than others when BSE was discovered, such as East Asia, but during this other regions, such as North America, came through and became the leaders in exports for U.S. beef. While there was some growth from the Rest of the World, there was not enough of an impact to compete with the foregoing countries.

Master of Agribusiness / Department of Agricultural Economics / Vincent Amanor-Boadu / The overall objective of this research is to develop a business continuity plan for a relatively large livestock company located in Francophone West Africa. This is very important in an environment when both internal and external risks can lead to significant disruptions in the business processes. The research, thus, focuses on developing a process that can be applied to establish a business continuity management process in this firm and provides the framework for implementing such a plan successfully. The livestock company, let us call it Livestock Co. to protect its identity, wants to define strategies for recovery, resumption of business and other key activities under the potential scenarios. Its managers desire to formulate crisis response strategies that would be implemented quickly when these disasters hit. The thesis envisages the potential conditions that may trigger these crises and develops the management systems to mitigate them, returning the business to it activities as quickly as possible. Some of the natural disasters that may be considered are fire, accidents and political upheavals. Some technical disasters that may be imagined may be related to infrastructure, labor crisis, and grain dust explosions. Unlike natural disasters, which often are uncertain, technical disasters can be predicted based on careful assessment of the environment or the assets. The research evaluates the process for developing a business continuity management plan and offers an implementation process to ensure its smooth execution.

Master of Science / Department of Agricultural Economics / Mykel Taylor / Forward contracts are one of the main tools used by producers to manage price risk because forward contracts shift the risk from producers to the grain elevator offering the contract. The elevators protect themselves from this risk by hedging, leaving them susceptible to basis risk, which they offset by adding a risk premium to the forward contracts they offer producers. This risk premium is affected by increased volatility and by differences in elevator-specific characteristics at elevator locations across Kansas. This study replicates the results in Taylor, Tonsor, and Dhuyvetter (2013) and adds a set of elevator-specific characteristics to measure their effect on risk premiums. A random effects generalized least squares model is estimated due to the data gathered being panel data. The contribution of this study is to further examine the drivers of risk premiums in forward contracts for Kansas wheat. The results indicate that all of the elevator-specific characteristics in the data set have a statistically significant impact on the value of risk premiums on forward contracts for Kansas wheat. The results also confirm the findings in Mallory, Etienne, and Irwin (2012) and Taylor, Tonsor, and Dhuyvetter (2013) that increased volatility post 2007 caused increases in risk premiums. The risk premiums after the structural break in 2007 increased by $0.069695/bushel, as the average risk premium prior to 2008 was $0.158682/bushel, while the average risk premium after 2007 was $0.228378/bushel.

Master of Agribusiness / Department of Agricultural Economics / Sean Fox / The commodity markets have seen a great deal of volatility over the past decade, which, for those involved, has created many challenges and opportunities. Some of those challenges and opportunities are related to the behavior of the basis – the difference between the local cash price of grain and its price in the futures market. This thesis examines factors impacting basis for corn and soybeans at an Illinois River barge terminal, inland grain terminals in central Illinois, and in the Decatur processing market. Factors used to explain basis behavior include the price level of futures markets, the price spread in the futures market, transportation cost, local demand conditions, and seasonal patterns. Using weekly data on basis from 2000 to 2013, regression models indicate that nearby corn futures, futures spread, inverted market, days until expiration, heating oil futures, and some months are significant drivers of corn basis. For inland terminals and processor regression models nearby corn futures do not appear to have significant effects. Using the same parameters for soybean basis nearby soybean futures, futures spread, inverted market, heating oil and some months are significant drivers but days until expiration do not appear to have a significant effect.