Master of Agribusiness / Department of Agricultural Economics / Vincent R. Amanor-Boadu / Many small communities in the Alps are facing the same problem of ensuring a durable economic development, protecting their natural resources and preserving their traditions under the constraints of higher production costs, distance from markets, isolation, severity of climate, a lower level of public services. This is the situation faced by Bagolino, a small town of roughly 4,000 inhabitants located in the Italian Alps. One of the major supporters to the growth of Bagolino, along with tourism, is its cheese Bagòss , whose origin dates back centuries. The Bagòss cheese is a semi-cooked cheese that is produced under strict processing methods that have been practiced for centuries. The Bagòss industry, with its unique organizational system, challenges researchers to investigate what factors are decisive in explaining its success. It is an example of a common situation in the Alps whose products arise from history, traditions and natural environment. This research aims to explain which factors influence the production of the Bagòss cheese and which factors explain differences among producers. Various aspects of interest of the Bagòss industry were examined through a literature review: social and economic situation of Bagolino and history of the town helped to get a better understanding of the background of the industry. The review of literature about entrepreneurship and supply chain was aimed to get a better understanding of the Bagòss industry organization; whereas theories about rural development and sustainable development described the social and environmental context of this production. Last the review of the main economic theories helped to analyze the Bagòss industry from the economic perspectives: monopolistic competition and the resource based view of the firm. Data were collected from multiple sources; the main source of data was a survey of farmers that involved all Bagòss producers. Data from administrative source were important for revision and also furnished data that could not be obtained from farmers. Qualitative interviews with experts were important for checking purposes and for understanding of the social and economic environment in which the Bagòss production takes place. Analytical tools of this thesis were of three different types: qualitative data used mainly to describe the growth medium of Bagòss and to formulate hypotheses to be tested with an econometric model. Statistical analysis provides a complete description of the industry. The Bagòss industry is not characterized by highly diversified use of the land: summer pastures, long term meadows and forests are the three main categories of the use of land. Almost all labor force is made up of family members and relatives. There are a total of 657 adult milking cows involved in the Bagòss production, with an average of 24.33 cows per farm; most farmers process all or part of their cow milk. The main product is the Bagòss cheese. We estimated the production at 146.5 tons of Bagòss. 69% of Bagòss is sold after aging for less than a year. In terms of marketing the most important channels are Bagolino’s retailers, consumers buying directly and retailers located outside Bagolino. According to our estimates EBITDA equals to 1,388 thousand Euro, an average of more than 55 thousand euro per farm. Two factors are able to explain most of the variability in the milk production: the number of workdays in the farm and the total cost of purchased feed. The EBITDA / tons of milk ratio is an indicator of the farm efficiency: the explanatory model for this is based on the operator’s age and level of education, the percentage of Bagòss sold after aging for one year or more, the percentage of Bagòss sold by direct sale to consumers and the size of the herd. Finally, a model able to explain the variability of the EBITDA / work days ratio was built; this ratio is considered to be an indicator of the labor productivity. This model is based on the percentage of Bagòss sold after aging for one year or more, the percentage of Bagòss sold to restaurants and hotels, the total milk production and the cost of rent of pastures. The first three have a positive impact on the dependent variable, whereas the fourth has a negative impact. The last two models show that small farms tend to be less efficient in their use of resources, and also less efficient in the use of labor.

Master of Agribusiness / Department of Agricultural Economics / David G. Barton / The goal of this thesis was to help Farmers Cooperative Equity Company (FCE) remain a firm, stable cooperative while increasing wealth of their patron owners. This thesis evaluated alternative equity redemption strategies to help FCE decide what decisions need to be made for proper use of equity for financing assets and increasing patronage returns. To develop an understanding of FCE and their current financial structures, we looked at the history of FCE and cooperatives in general. Then we gave a brief background of financial performance measures that were used to evaluate the profitability, solvency, liquidity, and efficiency of FCE. A cooperative performance profile was then run on FCE, by using a financial analysis program called PERFORM, to compare it to other agriculture cooperatives. The results for FCE were very strong in that they were performing at or above the 50th percentile range for many of the measures examined. FCE appears to be a very profitable, liquid, solvent, and efficient cooperative. We then used the results provided by the financial analysis program called PERFORM to make financial projections for the future to evaluate alternative equity redemption strategies for FCE. A computer program called FINPLAN was used to make the financial projections and evaluate the alternative equity redemption strategies. Five different strategies were evaluated and compared to the status quo, “strategy S0,” business as usual. The results showed that if the projections made for the future are correct, FCE would be able to return larger redemptions to patron owners by implementing an alternative equity redemption strategy that adheres to strict balance sheet management. Balance sheet management requires a cooperative to meet predetermined solvency and liquidity goals and then distributes the residual equity over and above that needed to finance assets, in combination with debt, as the equity redemption budget for that year. FCE could return larger redemptions while financing their operations through the use of patron equity and then return excess equity to patrons based upon cooperative usage. FCE’s general manager and board of directors have been provided with this thesis and the full project report. This thesis and project provide FCE with valuable information for them to make critical decisions on cooperative finance, including income distribution and equity management decisions.

Master of Agribusiness / Department of Agricultural Economics / Arlo Biere / This thesis is the plan used to outline a business plan for a prospective business, TASTE ST LOUIS. While working toward my MAB Degree, I realized there were many things I could implement from the program into the business that would help this new business venture to succeed. I was able to research the food service industry to gain a better understanding of how to market and plan for the success of this venture. After I started the research on this business venture, I soon found that we needed a business plan that would answer many questions we had regarding the success of our business. The first part of the thesis is a brief summary of the food service businesses in St. Louis and the geographic analysis that became the deciding factor in locations. The second part of the thesis is an explanation of TASTE ST LOUIS. This section gives the history of the business and explains the development and start-up. The third portion, of the thesis is the small- business plan and pro forma financial statements.

Doctor of Philosophy / Department of Agricultural Economics / Tian Xia / This dissertation presents the development of a new approach to include the interaction of vertically differentiated products, a subject that has been largely ignored in previous studies, to analyze the market power of exporters and importers in the world markets of agricultural commodities. Three theoretical models, a residual demand elasticity (RDE) model, a residual supply elasticity (RSE) model, and a two-country partial equilibrium trade model, are developed, and the corresponding empirical models are specified for U.S.-Japan soybean trade. Genetically modified (GM) and non-genetically modified (non-GM) soybeans are vertically differentiated products in the sense that GM soybeans are largely defined as an inferior substitute to non-GM soybeans. I compare two versions of these models: a new approach in which the interaction between non-GM and GM soybeans is taken into account and the traditional approach in which the interaction is ignored. In each of the three models (the RDE model, the RSE model, and the partial equilibrium trade model), the traditional approach overestimates the market margin of U.S. non-GM soybean exporters and that of Japanese non-GM soybean importers. By considering the interaction between non-GM and GM soybeans, the new approach greatly reduces the estimates of the corresponding market margins of U.S. exporters and Japanese importers to improve the accuracy of such estimates. The statistical significance of the coefficient estimate of the interaction term, the U.S. GM soybean price or the Japanese GM soybean price, in all three models suggests that the new approach, which includes the interaction between non-GM and GM soybeans, is necessary and preferred. The partial equilibrium trade model includes both an RDE equation and an RSE equation in a system to address the possible contemporaneous cross-equation correlation. Thus, the estimation results of the partial equilibrium trade model are further improved, compared to those of the RDE model and the RSE model. Using the traditional approach to estimate the partial equilibrium trade model, I find that the U.S. non-GM soybean exporters’ market margin is 56.5% and the Japanese non-GM soybean importers’ market margin is 16.1%. However, the results obtained by using the new approach show that the market margins of U.S. exporters and Japanese importers are 33.2% and 6%, respectively. By taking into account the interaction between non-GM and GM soybeans, the new approach improves the accuracy of the estimates of market margins of soybean exporters and importers. U.S. non-GM soybean exporters do have a significant market margin in international markets, but it is not as large as the one suggested by the traditional approach. Although Japanese non-GM soybean importers enjoy some market margin, it is relatively small. The theoretical and empirical models and results in this dissertation provide new and more accurate estimates of residual demand and supply elasticities and market power and improve the understanding on world soybean markets. These results can be useful for industry participants in international soybean markets, academic researchers, and policy makers.

Master of Agribusiness / Department of Agricultural Economics / Allen Featherstone / Because agriculture is a cornerstone in the U.S. and World economies, the agricultural retail industry is becoming more competitive. To gain a competitive advantage, agricultural retailers must take advantage of competencies that they have. The thesis provides an in depth analysis of how FluidGro products effect the profitability of Centennial. It explores the issues impacting Ag Retail and how marketing concepts and theories can make a retailer achieve success in volatile times. Insight is provided regarding how Centennial Ag Supply can use those strategies to give them a low cost position and a differentiated product and how Centennial can improve profitability by implementing effective marketing strategies for the FluidGro brand of products. Finally, a couple of capital improvement options that Centennial Ag can invest in to increase the sales and profitability of their FluidGro product line and what impact that will have on company sales and profitability. A net present value analysis is used to analyze the capital improvements and linear regressions estimate the profitability of the FluidGro product line and how this will contribute to increased profitability to the parent company, Centennial Ag Supply. Results indicate that Centennial should first invest in a wholesale division. Next, Centennial should invest in a heat exchanger to allow it to manufacture additional products.

Master of Agribusiness / Department of Agricultural Economics / Christine Wilson / Methane digesters are a potential investment for a dairy farm. A digester can lower greenhouse gas emissions, manage manure waste, generate energy, provide fertilizer and recycle bedding. The AgSTAR project of the Environment Protection Agency describes anaerobic digesters as a solution to a problem dairy farmers have always had to solve but that has become more acute with the innovation of larger scale, confined animal feeding operations developed in response to the growing food demands of the world’s larger and more prosperous middle class population – what to do with cow manure. Digesters take cow manure and convert it into energy while also eliminating manure odor. Energy is the primary economic benefit of a digester. A dairy farmer can use the electricity or gas generated from the digester to fuel the energy needs of the farm. Selling gas or electricity on the market is a revenue source that largely determines the level of profit from investing in a digester. This thesis will explore the four economic factors required to make anaerobic digesters a viable economic investment for a 1,500 head cow herd in the United States. It is imperative that farmers are able to obtain a return on the investment as soon as possible as many do not have the capital to invest in a nearly $1 million project. Congress may need to provide additional incentives for farmers and utility companies to take waste and process to energy. The future for methane digesters looks profitable when energy and carbon markets are available and allowed to trade competitively. The federal government may consider focusing on incentives for the utility companies’ infrastructure to make purchases of renewable energy from a digester more economically attractive and efficient. Today, an obstacle for increasing the number of digesters in the United States is the cost associated with moving the energy from the digester and into the national natural gas to grid. Natural gas companies may need to be compensated for that expense plus the potential difficulties of dealing with multiple suppliers or digester owners. Electricity companies have a grid in place to power rural and urban communities. They have spent billions of dollars and decades to establish efficient routing of power to residents and businesses. Manure digesters are mostly located in rural areas that would also require an investment in infrastructure to move the energy from the digester to the power grid. Mandating net-metering would require energy companies to purchase renewable energy, but consumers may see an increase in their cost. Therefore, the answer to increasing the number of manure digesters in the United States may be to direct the incentives to utility companies to invest in expanding infrastructure rather than increasing digester owner subsidies. Although, the REAP grants are helpful for assisting farmers with startup installation costs, there may not be a need to increase that subsidy in the next farm bill if an energy bill includes incentives for energy companies to purchase renewable energy from digesters.

Master of Agribusiness / Department of Agricultural Economics / Allen M. Featherstone / Small scale broiler and layer production constitutes a significant part of the poultry industry in Zambia. However, the contribution of small scale enterprises to broiler production is more pronounced than layers with statistics showing 60 and 30 percent for broilers and layers, respectively. This study was carried out for the purpose of determining the economic profitability of both broiler and layer enterprises and also to evaluate their degree of attractiveness for investment. The thesis used the Net Present Value and Internal Rate of Return methods to determine the economic profitability for both broiler and layer enterprises. The data used in the analyses were obtained direct from the market and additional data were extracted from the Cost of Doing Business Manual 2012, a publication of the Zambian Development Agency. Additionally, the study used a capital investment of US $50,000 for each enterprise, 25 percent opportunity cost of capital and an economic life of five years. The data were used in estimating the enterprise budgets for both broiler and layer enterprises from which income statements were generated. The enterprise budget for broiler production estimated revenue from the sale of live broiler chickens at a wholesale price while the layer enterprise budget estimated its revenue from the sale of eggs and culled hens. The sale prices used were US $5 per broiler chicken, US $3.60 per tray of eggs and US $2 per culled hen as obtaining on the market at the time. In addition, production was estimated at 60,000 broilers and 30,000 trays of eggs from 3,000 layers annually. The cost of constructing brooder houses and purchase of production equipment were the major cost components for the two enterprise budget estimates. The estimates indicated that these two cost components amounted to US $27,090 and US $21,095 for boiler and layer enterprises respectively. The other cost component was production cost and it includes the cost of labor, feed, day old chicks, marketing, vaccines, transportation, electricity, debeakers, heaters, stationery, etc. The cost of feed constituted about 65 percent of total production cost for layer enterprises and about 60 percent for broiler enterprises. The total production cost as a percentage of revenue was estimated at 80 percent and 70 percent for broiler and layer enterprises, respectively. The analyses were completed under three alternative scenarios that included optimistic, expected and pessimistic scenarios. The analyses across all scenarios show that both broiler and layer enterprises are economically viable for investment though the broiler enterprise is more economically profitable than the layer enterprise. They both show positive NPVs and IRRs in excess of the 25 percent opportunity cost of capital used in the analysis. The analysis for broiler enterprise showed a NPV of US $178,242 for the optimistic scenario, US $122,742 for the expected scenario and US $30,550 for the pessimistic scenario. Results obtained from layer enterprise analysis showed NPVs of US $72,388, US $49,260 and US $11,186 for the optimistic, expected and pessimistic scenarios, respectively. Consistent with the decision rules of the NPV and IRR methods, both enterprises were found to be economically viable for investment. On a comparative basis though, the small scale broiler enterprise was found to be more attractive for investment than the small scale layer enterprise as indicated by the results of the NPVs and IRRs. The lucrative nature of the broiler enterprise and easy of management could be used as possible explanation to the current investment trends seen in the Zambian poultry industry.

Master of Agribusiness / Department of Agricultural Economics / Vincent Amanor-Boadu / Despite the dependence of more than three-quarters of a million households depending on cocoa for their living in Ghana, the production segment of the cocoa industry is fraught with significant challenges manifesting as low farm productivity. Various intervention programs to help farmers improve productivity at the farm level have been used over the past few decades. One of such programs is the Cocoa Abrabopa Program (CAA), which uses an integrated approach where farmers are supplied inputs made up of fertilizer, pesticides and fungicides as well as provided training and extension support services. The inputs are provided on credit and the producers repay the cost of these inputs upon selling their crop. This study sought to assess the results of the CAA in enhancing the net profits of its members over time. It used survey data collected over five years from members of the CAA program. The study used an econometric model to evaluate the demographic and production characteristics of CAA members on their net profits. The results show that male members in the CAA program had higher net profits that their female counterparts, about GHS 237.32 more. For every year increase in the member’s age, the net income increased by GHS 6.46, which was statistically significant at the 10 percent level. The crux of the study – the effectiveness of the CAA program in enhancing performance – was supported by the results. Participants who were two years in the program posted GHS 591.13 more net profit than those who were in their first year. Those who were three year and four or more years posted respectively GHS 1,211.04 and GHS 18,752.29 than those in the first year. All these were statistically significant at the 1 percent level. Thus, the CAA program is producing what it is expected to produce – enhancing the net profits of its members and doing so in higher levels with the duration of membership. The study also found that having a bank account produced a higher effect on net profits than being male, posting GHS 296.13 more net profit than not having a bank account. The econometric model specified and estimated was significant and the variability in all the independent variables in the model explained about 46 percent of the variability in net profits. The study recommends that the CAA program incorporates helping all its members open bank accounts as part of its offerings. It also recommends working with policymakers and community leaders across its operational areas to encourage investments in the education of females and elimination of the tenural rights discrimination that frequently confronts females in agriculture. It also recommends that an increased effort be made to expand membership of the CAA program to all cocoa producers in Western South because of the significant benefit of the yield effect of the region on net profit of CAA members in the region.

Doctor of Philosophy / Department of Animal Sciences and Industry / Curtis Kastner / The U.S. agriculture industry is diverse and dynamic, plays a vital role in the nation’s economy, and serves as a critical component in providing the global food supply. Agriculture has and always will be susceptible to threats such as pests, disease, and weather, but it is also threatened by intentional acts of agroterrorism. One specific area of concern is foreign animal diseases (FAD) and the danger these diseases create for the U.S. livestock industry. Whether a disease outbreak is intentional or accidental, it could devastate animal agriculture and the food infrastructure and have a lasting impact on state, national, and global economies. One of the most economically devastating diseases that raise fear and anxiety in the livestock industry is foot and mouth disease (FMD). A number of administrative, regulatory, and legislative actions have been implemented at state and federal levels designed to protect the agriculture industry and to prevent, prepare for, and respond to an accidental or intentional introduction of an FAD. However, the consistency, clarity, and long-term commitment of these policy approaches remains in question. Effective policy decisions require a multidisciplinary approach that consider and balance science, economics, social factors, and political realities. A significant number of policy analysis tools exist and have been applied to animal emergency scenarios but few actually address the complexity of these policy dilemmas and provide information to policymakers in a format designed to help them make better decisions. Policy development needs to take a more multidisciplinary approach and better tools are needed to help decision makers determine the best policy choices. This dissertation analyzes three FAD policy dilemmas: mass euthanasia and depopulation, carcass disposal, and vaccination. Policy tools are developed to address the multidisciplinary nature of these issues while providing the information necessary to decision makers in a simple and useful format.

Master of Agribusiness / Department of Agricultural Economics / Bob Burton / The purpose of this thesis is to compare the net income and risk associated with custom farming, cash rent, and crop-share. This analysis will help provide insight on the best option for my 40 acres of farm land, which I recently was given from my mother. The 40 acres is located in Codington County, SD and has been previously in a corn, soybean, and wheat rotation. Another goal of the thesis is to create a business plan for Hauger Farm, which will lay out the activities involved for custom farming. The 40 acres will continue to be in a corn, soybean, and wheat rotation. A 12-year analysis was developed to determine the net income and risk associated with custom farming, cash rent, and crop-share. The analysis consisted of historical data from the past nine years while predicting the next three years. After creating the net income statement, the option providing the most income over the long-run was to have the land custom farmed. Custom farming also brought the most income variability or risk; while cash rent showed to have the lowest risk with the least variable income.