Master of Agribusiness / Agricultural Economics / Vincent R. Amanor-Boadu / Despite at least three waves of transformations in the US coffee retail market, traditional retailers have not altered their merchandizing approaches for decades. This may be due primarily to the fact that there are still margins being made in selling canned coffee, the initial coffee wave in this research. Yet, because of their significant role in the retail segment, traditional retailers cannot be ignored by coffee suppliers. This implies that with each shift in the coffee industry, it is important for the participants to find ways of enabling the traditional retailer to make the necessary transformation – at least with their products – so that they can secure their market share and their continuing success. The research develops a number of case studies of different coffee retailers who are developing innovative processes for merchandizing new coffee formats, such as Keurig K-Cups and Ready to Drink (RTD) products. The research shows that coffee merchandizers can learn from these retailers to develop support programs for their traditional retail customers to leverage their importance in the coffee market to enhance their own sales and profitability. We identify a number of value innovation strategies that may be used to achieve this objective of enhancing performance in traditional coffee merchandizing. For example, we identify a store-within-a store strategy that is already in operation for a number of product categories in traditional retail, and suggest that it be expanded to include coffee. This approach will elevate purchases across the segment and help enhance overall competitiveness. The approach is not unlike Kroger’s treatment of its natural and organics as a separate department or Roche Brothers’ creation of a gourmet specialty, which is prominently displayed near the store’s entry. It has become a prime location where new and exciting entrants to the specialty assortment are presented to shoppers in an elevated way. In this location, they are typically expected to sell-through initial quantities rapidly. The research presents innovative ideas to help coffee purveyors help their customers reposition emerging “waves” of coffee products in their traditional retail systems. It hopes that traditional retailers will benefit from the case studies of lessons from other categories and initiatives so that they can improve their own performance, and in so doing help coffee purveyors enhance their own performance.

Master of Science / Department of Agricultural Economics / Hikaru Hanawa Peterson / The purpose of this study was to examine the economic contribution of rural grocery stores to the communities they serve. In addition, this study looked at the community characteristics that influence the level of economic contribution of a rural grocery store. The analysis was conducted for 163 Kansas rural grocery stores that were selected from cities with populations of fewer than 2,500 people. Regarding the first objective, household income changes and loss of business activity associated with each grocery store were estimated using the IMPLAN economic modeling system. To do so, changes in employment at each grocery store and household income in the community were measured assuming the loss of income that affected households in a city would face if they had to travel a greater distance to buy groceries. The economic contribution of rural grocery stores in Kansas averaged $644,413, ranging from $38,441 and $3,921,027. The results showed that population and location within the state had direct effects on the economic impact of a grocery store. With more complex economies in the eastern and south central parts of Kansas, these stores had a greater economic contribution than stores in the Southwest and Northwest. Communities in the western parts of Kansas would be the worst off from losing their grocery store because of increased travel costs they would incur by traveling the next alternative store. For the second objective, city and county characteristics that were thought to influence the level of the economic contribution of a store were tested. Two regression models were considered specifying the natural log of the economic contribution of the grocery store and the percentage of total value added the grocery store contributed to the county economy as the respective dependent variables. It was observed that population was one of the biggest drivers of the economic contribution of a grocery store. Other variables that were statistically significant in both models were the number of city households that had children, relative remoteness of the county, the number of convenience stores per 1,000 people, and the county wealth. In conclusion, this study showed that grocery stores have a significant impact on the communities that they serve. Both employment and travel costs had direct implications on the economic impact of a store. Additionally, demographic factors and other community characteristics influenced the level of impact that these grocery stores can have on their communities.

Master of Science / Department of Agricultural Economics / Vincent Amanor-Boadu / Food insecurity affects 16 percent of the population in northern Ghana, making food security a major focus for many of the development programs in the country. A major initiative to overcome food insecurity may involve the development of effective storage systems to help farmers control the flow of their production to markets and, thus, have higher control over the price they receive. While the poor storage infrastructure in the region is known, there is lack of knowledge about the factors motivating farmers to utilize storage in spite of these conditions. The purpose of this paper is to increase understanding about storage behavior of smallholder maize farmers in northern Ghana. A review of the literature indicates credit plays a large role in storage behavior. The purpose of this thesis is to bridge the gap between literature on storage as a bank, and on storage as a way to ensure food security. Specific objectives include: i) estimating formal and informal credit’s effects on storage behavior of smallholder maize growers, and ii) examining the effect of credit at various levels of storage. This analysis is based on data collected on 527 farmers in Ghana’s four northernmost regions obtained from an agricultural production survey conducted in 2013 and 2014 by USAID-METSS – a project funded by the Economic Growth Office of the USAID mission in Ghana. Ordinary Least Squares modeling was employed to determine the marginal effects of formal and informal credit on storage. Additionally, quantile regression modeling estimated the marginal effects at different levels of storage, including the median. The results indicate that formal credit and on-farm storage had statistically significant negative effects on maize storage at both the mean and median, but only farm output proved to be statistically significant at different levels across the storage distribution. On-farm storage had a statistically significant negative effect on storage when compared to storing off-farm at facilities like local store rooms. Carryover storage from the previous year tested to have statistically significant negative effects on storage. Under the conceptual framework utilized for this study, the results suggest that using formal credit increases a household’s food security.

Doctor of Philosophy / Department of Agricultural Economics / Jason S. Bergtold / In recent years, great attention has been placed on conservation systems for agricultural production. Conservation practices offer economic and environmental benefits, yet conventional practices remain the prevailing system in some regions. As conservation efforts are launched by different local and federal agencies, understanding farmers’ motivations when adopting conservation practices is important to ensure the continuation of adoption through the development of programs that are tailored to meet farmers’ preferences and constraints. The purpose of the first essay was to identify the factors affecting farmers’ choice of tillage practice at the crop level. Farmer’s choice of No-till, Strip-till and Conventional tillage was modeled for dryland corn, wheat and soybean production in Kansas. The results show that tillage decisions are crop-specific and that factors such as risk aversion, baling and grazing of crop residue, crop acreage, and farmers’ approach to adopting new technologies are significant factors affecting farmers’ decisions. The second essay focused on the adoption of continuous no-till, conservation crop rotation, cover crops, and variable rate application of inputs and the effect that incentive payments, payment mechanism, and off-farm environmental benefits from conservation have on the decision to adopt. This essay also examined the risk associated with the variability of net returns and its effect on farmers’ willingness to adopt using a non-linear extended expected utility framework, allowing for the estimation of a utility parameter for net returns, farmer’s subjective judgment of probabilities, and farmers’ risk attitudes. Farmers were found to exhibit risk aversion, with an estimated risk premium of approximately 3% of net returns. Results also suggested a preference for federally-run programs and for programs with higher off-farm environmental benefits. The third essay examined the timing of adoption of continuous no-till, cover crops, and variable rate application of inputs. This study found that risk aversion delays the timing of adoption of cover crops and variable rate application of inputs. However, the timing of adoption of continuous no-till was not affected by risk aversion. Findings also indicated that farmers who consider themselves innovators adopt at a faster rate than their counterparts.

Master of Science / Agricultural Economics / Jason S. Bergtold / The use of elasticities of substitution between inputs has become the standard method for addressing the effect of a change in the mix of input used for production from a technological or cost standpoint. (Chambers 1988) A researcher that wants to estimate this elasticity, or some other comparative static, typically would do so using parametric production or cost function (e.g. translog or normalized quadratic) with panel data. For a study with only cross-sectional data, the construction of such a function may be problematic. Using a dual approach, a nonparametric alternative in such a situation may be the use of Data Envelopment Analysis (DEA). Cooper et al. (2000) provided a methodology for estimating elasticities of substitution for the technical production problem using DEA. To our knowledge, this has not been extended to the cost efficiency problem, which would be equivalent to estimating Allen partial or Morishima elasticities of substitution between inputs using a cost function (or cost minimization framework). The purpose of this thesis is to show how elasticities of substitution can be derived and estimated for the technical production and cost (overall economic) efficiency DEA under variable returns to scale. In addition, an empirical example using Kansas Farm Management Association (KFMA) data is presented to illustrate the estimation of these elasticities. The results showed that input substitutability is relatively limited at the enterprise level

Master of Science / Department of Agricultural Economics / Hikaru H. Peterson / Organic has become a familiar term in agriculture, usually bringing to mind the phrases “no chemicals” and “large premiums.” While organic products usually command a substantial price premium over their conventional counterparts, the determinants of this premium are generally unknown. The lack of literature covering organic prices is not from a lack of interest but from a lack of information and data for organic commodities. This study examines two aspects of organic grain prices in an attempt to learn more about the organic grain sector. The first objective was to identify determinants of organic premiums received by members of a Kansas organic grain cooperative. Six different grains along with alfalfa hay were examined using hedonic models and bootstrapping statistical techniques. Findings of the hedonic analyses are as follows. Dairy farms seemed to pay a lower premium for feed grade corn and hard red winter wheat compared to other types of buyers. Buyers located in Kansas tended to provide a smaller premium than buyers located elsewhere. Early contract periods produced a smaller premium than later periods. Shipment timing was much the same, with fourth quarter shipments receiving the largest premium. Additionally, each subsequent contract year resulted in a larger premium. If the cooperative had arranged shipment of the commodity, a lower premium was acquired. Finally, longer contract lengths resulted in a larger premium. The second part of this study examined various price series of organic and conventional commodities to determine if the two markets were related. Using vector autoregressive models, cointegration and causality tests were conducted, and speed of adjustment to a shock in the long run equilibrium and exogeneity were also examined. Of the 43 pairs of organic and conventional price series tested, 29 were found to be cointegrated. Of those cointegrated pairs, 11 causal relationships were found. Five of these causal relationships indicated that the conventional commodity prices led the organic. There were six instances where the organic commodity prices were found to lead the conventional. For most causal relationships, about 5% of the adjustment to a shock, or divergence from long run equilibrium occurred in one week.

Doctor of Philosophy / Department of Agricultural Economics / Ted C. Schroeder / Concerns regarding management of animal disease and related perceptions about food safety have escalated substantially in recent years. Terrorist attacks of September 2001, discovery of bovine spongiform encephalopathy in a dairy cow in December 2003 in Washington state and subsequent discoveries of BSE infected animals in Texas in 2005 and Alabama in 2006, and recent worldwide outbreaks of highly contagious animal diseases (i.e., Foot-and-Mouth Disease and Avian Influenza A (H5N1)) have made apparent the need for animal traceability in U.S. livestock production and marketing. In addition, animal identification and trace-back systems are rapidly developing throughout the world increasing international trading standards. In recent years, increasing numbers of economic analyses of animal diseases have integrated epidemiological models into economic frameworks. However, there are only a few studies that have used this integrated framework to analyze the effects of animal traceability on highly contagious animal diseases. This study’s goal is to quantify and evaluate the economic impacts of different depths of animal identification/trace-back systems in the event of a hypothetical highly contagious foot-and-mouth disease outbreak that poses a threat to U.S. livestock competitiveness. Specifically, an epidemiological disease spread model is used to evaluate the impact of a foot-and-mouth disease outbreak in southwest Kansas. The information obtained from the disease spread model is then used in conjunction with an economic model to determine the changes in welfare of producers and consumers. Results obtained from the epidemiological model indicate that as the depth of animal identification in cattle is increased, the number of animals destroyed is reduced as are the associated costs. Also, the length of the outbreak is reduced by approximately two weeks. The economic results suggest that as surveillance is increased, decreases in producer and consumer welfare are smaller. Furthermore, as surveillance is increased, decreases in producer and consumer surplus measures can be reduced by approximately 60 percent.

Doctor of Philosophy / Department of Agricultural Economics / John M. Crespi / The EU is one of the world’s biggest importers of bananas and, as such, import policies enforced by this trade union are likely to have a great impact on major producers of bananas. Aiming to protect communitarian producers and exporters from selected ex-colonies of Africa, the Caribbean and Pacific and to honor previous agreements, the EU unified its import policy for bananas in 1993. This policy, known as the Common Market Organization for Bananas, generated one of the most controversial trade disputes in history. After several modifications of the original regime, in January 2006, the EU changed its import regime to satisfy a World Trade Organization mandate and to honor an agreement signed with the United States in 2000. This dissertation reviews the history of the trade disputes in the EU banana market and analyzes the effects that the new import regime will have on major suppliers. To do this, a theoretically-consistent demand system is estimated and then the calculated parameters are used to model the effects of the tariff-only import system in the EU banana market. Based on the results, producers surplus are estimated and Monte Carlo simulations are performed to do a sensitivity analysis of the results. In the demand estimation component, the EU market is modeled as a system containing four major suppliers using the Almost Ideal Demand System (AIDS). This estimation fills an important gap in literature regarding the lack of well-estimated demand elasticities of bananas in the EU. The EU banana market is then modeled based on a equilibrium displacement model framework. Results of this analysis are then used to calculate point estimates of producer surplus changes as a measure of the impact of the new import policy on banana suppliers. Monte Carlo simulations are based on parameter estimates obtained from the AIDS model. These simulations allowed not only sensitivity analysis but also probabilistic inferences about the statistical significance of the estimates obtained in the previous components. Results indicate that the hypothesis that the new import regime will not affect the major suppliers of the EU banana market cannot be rejected. This might indicate that the policy enforced by the Common Market Organization for Bananas and the current tariff-only import regime are statistically equivalent. In other words, the EU expertly enacted a tariff level that will leave much as status quo.

Doctor of Philosophy / Department of Agricultural Economics / Ted C. Schroeder / Contingent valuation (CV), choice experiment (CE) and experimental auction (EA) or the combinations of the three methods are often used by researchers to elicit consumer willingness to pay for food attributes (food label). The main concern about these approaches is that different quality attributes of food are assumed independent. The problem of the independence assumption of a food attribute is that one attribute can signal information about another attribute or could be a proxy of overall product quality. In addition, in surveys consumers tend to be forced to focus on the limited attribute information that are presented by researchers, whereas in the real world, consumers have various sources of food quality information. The limited attributes provided in a survey may lead respondents to allocate their budgets to those limited attributes rather than allocate their budgets to a larger number of product attributes to truly reveal their preferences. The main objective of this study is to reveal the marginal impacts of additional food quality attributes on consumer WTP for food labels. Surveys containing a series of online CEs were collected to investigate the effects of additional beef steak attributes on consumer WTP in two different US markets. Both surveys included the same four questionnaires. Two questionnaires test the effect of additional attributes when no cue attributes are provided to the respondents, while the other two questionnaires test the effect of additional attributes when cue attributes are also presented. Every questionnaire contains two CEs, with the second CE having one more attribute than the first. Random parameters logit models are estimated for each CE in the four questionnaires with survey results from both samples, resulting in 16 sets of estimations altogether. The models with the different survey samples reveal consistent results regarding changes in WTP with more attributes added to the CEs. Consumer WTP for the most important attributes in the CE decreases when the number of attributes increases from three to four, while the WTP for the most important attributes increases when the number of attribute increase from four to five. The changes in the WTP for attributes depend on their relationships with the newly added attributes to the CEs and the number of attributes in CEs.

Doctor of Philosophy / Department of Agricultural Economics / Andrew P. Barkley / Tariff rate quotas (TRQs) are one of the most widely used trade policy instruments in agricultural trade. The issue of whether TRQs are efficient trade policy instruments for improving market access has been widely debated. Some believe that TRQs impose an extra barrier to trade, circumvent the reforms sought under the General Agreement on Tariffs and Trade (GATT) and World Trade Organization (WTO) and may not be as attractive as initially envisioned. Others believe that the TRQs are useful and facilitate trade and liberalization. Any expansion in quota, or decrease in tariffs, or combinations of the two, has the potential to liberalize trade in a specific industry. There is strong clamor for continued reforms in the conduct of agricultural trade – including the implementation of TRQs. The purpose of this study is to increase the understanding of TRQs, and determine the impact of their implementation on the Philippine corn market. Specifically, the study will estimate the quantities of supply, demand, imports, domestic equilibrium prices, and border prices under different TRQ liberalization regimes. In this study, an existing TRQ model was utilized to determine how effective TRQs are as a trade policy instrument for trade liberalization and increasing market access. The results reveal that the Philippine corn market was restricted by the out-quota tariff. De facto liberalization of the TRQ at the level of the out-quota rate (50%) or even at 35% (in-quota rate), does not completely liberalize the corn market. Progressively reducing both tariffs liberalizes the market and leads to increases in surpluses. The lower tariffs, however, lead to less government revenues. The smaller the gap between the in-quota and out-quota, the smaller the quota rents become. Increasing the quotas has no significant impact in liberalizing the corn market, and the increase in imports decrease producer surplus in all cases. The TRQ model of the Philippine corn sector reveals that changing the components of the TRQ would lead to different impacts on supply, demand, consumer, producer and net surplus, and government revenues. Knowledge of the regime in which the country is trading can determine which individual policy instrument of the TRQ, the in-quota and out-quota tariff and the quota, should be used to increase market access or address the concerns of stakeholders in the corn sector. It is thus important for policy makers to find a workable tariff level that would serve the interest of all stakeholders in the sector.