We compare productivity and technical efficiency of organic and conventional dairy farms in the United States. We address self-selection into organic farming by using propensity score matching and explicitly test the hypothesis that organic and conventional farms employ a single, homogeneous technology. Utilizing the 2005 Agricultural Resource Management Survey on Dairy Costs and Returns Report data, we reject the homogeneous technology hypothesis and find that the organic dairy technology is approximately 13 percent less productive. However, we find little difference in technical efficiency between organic and conventional farms when technical efficiency is measures against the appropriate technology.Key words: dairy, organic, productivity, propensity score matching, stochastic frontier, technical efficiency Carlos D. Mayen is assistant professor in the Department of Agricultural Economics and Agricultural Business, New Mexico State University. Joseph V. Balagtas is assistant professor and Corinne E. Alexander is associate professor, both in the Department of Agricultural Economics, Purdue University.This research was supported by the Economic Research Service, United States Department of Agriculture, through the cooperative agreement # 43-3AEL-5-80064, and by the Purdue University Agricultural Experiment Station. The authors thank Michael Schutz, Jeffrey Dorman, and two anonymous reviewers for helpful comments. 1 Technology Adoption and Technical Efficiency: Organic and Conventional Dairy Farms in the United StatesAlthough the organic dairy sector in the United States is a niche market, it has exhibited potential for growth in the U.S. dairy sector. In 2005, certified organic dairy farms accounted for approximately 1 percent of the dairy cows in the U.S. and accounted for less than 1 percent of total U.S. milk production (McBride and Greene 2007). However, from 2003 to 2006, sales of organic dairy products nearly doubled, making organic dairy one of the fastest growing segments of organic agriculture in the United States, as well as a fast growing segment of U.S. dairy (Organic Trade Association). Growth in demand for organic dairy has been fueled by a complex mix of consumer concerns of food safety, nutrition, concern for the environment, and other factors (Klonsky 2000;Blank and Thompson 2004;Rotz et al. 2007). Growth in supply has been spurred in part by the promise of high returns relative to conventional dairy farming, as well as environmental concerns on the part of producers (McBride and Greene 2007). Proponents of the organic movement have held up the organic model as a potentially profitable alternative to conventional dairy production, especially for smaller operations as well as new farmers (Sato et al. 2005;Rotz et al. 2007).Yet little is known about the production practices of the organic dairy sector, not in small part because the industry is so new. In particular, little work to date has systematically addressed the effect of organic standards on the production process. Under standards d...

Market price dynamics for North American oriented strand board markets are examined. Specifically, the role of transactions costs are examined vis-à-vis the law of one price. Weekly data for the January 3rd, 1995 through April 14th, 2006 period are used in the analysis. Nonlinearities induced by unobservable transactions costs are modelled by estimating smooth transition autoregressions (STARs). Results indicate that nonlinearity is an important feature of these markets and that the parity relationships implied by economic theory are generally supported by the STAR models. Implications for the efficiency of spatial market linkages are examined by estimating generalized impulse response functions.

A structural econometric model of vertical relationships is adopted to identify pricing behavior in the supply chain for fluid milk in the United States. The model consists of a system of equations that allows estimation of oligopoly power of dairy co‐operatives and downstream firms, exploiting federal milk marketing order regulations to identify co‐operatives’ marginal cost. A key finding is that co‐operatives use their market power to raise the farm price of milk by almost 9% above marginal cost, resulting in an income transfer of more than $600 million per year in markets regulated by federal milk marketing orders.

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We assess the effects of the dramatic rise in agricultural commodity prices during 2007-2008 on income dynamics and poverty among rural households in Bangladesh. A unique panel data set allows us to put the effects of recent events in the context of long-run trends in income and poverty. We use data from a nationally representative longitudinal survey of rural households in ) analysed income dynamics and poverty incidence for the first three waves, finding a declining trend in both the incidence and severity of poverty, aided in particular by human capital development and off-farm employment opportunities. We update and extend the analysis to include data collected in 2008, at the height of a spike in agricultural prices. We find that the price of a balanced food basket increased by more than 50% during 2000-2008, while household income rose only 15%. As a result the incidence and severity of rural poverty in Bangladesh sunk to pre-2000 levels during 2004-2008. Thus, the price spikes in 2007-2008 helped push an additional 13 million people into poverty in rural Bangladesh. Moreover, we find that the determinants of poverty have not been time-invariant. In particular, agricultural production, which had previously been associated with a higher incidence of poverty, served as a hedge against higher food prices during 2004-2008.JEL classifications: D13, O12, O13, Q02, Q12