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Economics Working Group Progress Report. Eric Belasco, Suzette Galinato, Jingze Jiang, Tom Marsh, and Srinivasa Ponnaluru. March 13, 2012. Overview. Economic Model of Optimal Mulch Use Jingze Jiang, Tom Marsh, Eric Belasco Enterprise Budgets Suzette Galinato Production and Risk
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Economics Working Group Progress Report Eric Belasco, Suzette Galinato, Jingze Jiang, Tom Marsh, and Srinivasa Ponnaluru March 13, 2012
Overview • Economic Model of Optimal Mulch Use • Jingze Jiang, Tom Marsh, Eric Belasco • Enterprise Budgets • Suzette Galinato • Production and Risk • Eric Belasco
Optimal Mulch Use • Tasks accomplished: (Jingze Jiang; Phd Project) • Developed a dynamic economic model of mulch use • Measure over time profits=revenue-costs subject to economic and noneconomic processes • Gathered data and information • Constructed empirical model to measure user cost • balance the decision of mulch use vs cost of disposal • Simulated different scenarios/sensitivity analysis • Submitted abstract to the 2012 AAEA meetings
Optimal Mulch Use Profit= Revenue-Costs Markets & Demand Environmental Concerns Yield & Quality Production Inputs & Disposal Experiments Information/Relationships
Optimal Mulch Use • Tasks to be accomplished: • Continue to gather data and information • Link physical relationships to economic variables • Derive decision rules for optimal mulch use by grower, which provides a baseline for comparisons • Simulate tradeoffs for plastic and biodegradable mulches/sensitivity analysis • Compare private and social benefits for use of plastic mulches and biodegradable mulches • Investigate government intervention to balance individual and social optimum
Price Analysis • Tasks accomplished: • Adilet Maimekov, MS student project • Examined price determinants for different commodity thermoplastics • Found pricing predominately determined by • price lagged 1 period • either gas or oil prices (or both) • Provides a better understanding of expected prices and variation in pricing of plastic films for economic model
Enterprise Budgets • Tasks accomplished: • Completed working drafts of budgets for: tomato, lettuce and strawberry • Submitted budgets of field-grown tomato and lettuce to WSU Extension for publication as WSU Fact Sheets • Required multiple contacts and meetings with growers
Enterprise Budgets • Tasks to be accomplished: • Submit remaining crop budgets to WSU Extension Publications and finalize them after peer review • Post fact sheets on SCRI Project and IMPACT websites • Post plastic mulch requirement calculator on SCRI Project and IMPACT websites
Plastic Mulch Calculator • Tasks accomplished: (Suzette) • Costs built into enterprise budgets: • Material • Installation • Removal • Disposal • Tasks to be accomplished: • Investment decisions • Finish and post stand alone plastic mulch calculator
Production and Risk • Tasks accomplished: • Initial evaluation of early-to-season premium • Evaluation of crop insurance options for fruit/vegetable • Theoretical development of relationship between high tunnels and crop insurance in risk management • AAEA paper and presentation, summer 2011 meetings
Production and Risk • Tasks to be accomplished: • Evaluate risk management strategies with HTs • Assess the interaction between HTs and crop insurance programs • Use team results to create hypothetical scenarios • Place team results within context of a longer weather time series (how frequent do these types of events occur?) • Incorporate results from ongoing Certified Organic Production survey
Production and Risk • Tasks to be accomplished: • Incorporate outcomes from year 2 • Yield • Marketable yield • Quality • More in-depth analysis regarding early-to-market premium using farmer’s market data
Production and Risk • Tasks to be accomplished: • Two presentations upcoming with Carol and Annette • Women in Agricultural Educators National Conference (March in Memphis) • HTs as a risk management tool • National Small Farms Conference (Sept. in Memphis) • A case study in uses (and abuses) of HTs • Assess the insurability of HTs? (weather-based)
Publications/Drafts • Belasco, E., S. Ponnaluru, S. Galinato, and T.L. Marsh. “An Assessment of the Interaction between High Tunnels and Crop Insurance for Specialty Crop Producers,” American Agricultural Economics Association, Pittsburg, 2011. • Jiang, J., T. L. Marsh, and E. Belasco. 2012. “Optimal Pollution Control in Agricultural Production: Biodegradable vs Plastic Mulches,” Working paper, Washington State University. • Galinato, S.P., C. Miles and S.S. Ponnaluru. “2011 Cost Estimates of Producing Fresh Market Field-Grown Tomatoes in Washington,” Working Paper submitted to WSU Extension Publication. • Galinato, S.P. and C. Miles. “2011 Cost Estimates of Producing Fresh Market Field-Grown Lettuce in Washington,” Working Paper submitted to WSU Extension Publication.