On Monoculture and the Structure of Crop Rotations

Hennessy, David A.

doi:10.1111/j.1467-8276.2006.00905.x

Cited by 81 publications

(52 citation statements)

References 26 publications

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“…In addition, the farmers' choices to intensify their crop rotations, or bring additional land into crop production, is affected by local markets (Hennessy, 2006;Pannell et al, 2006). With the further development of the ethanol market and increased capacity of ethanol production in Kansas over time, it is likely that Kansas farmers may have responded to the increased demand for corn locally, by intensifying corn production on existing cropland and/or bringing new land into crop production.…”

Section: (2) Methodsmentioning

confidence: 99%

Ethanol plant location and intensification vs. extensification of corn cropping in Kansas

Brown¹,

Hanley²,

Bergtold³

et al. 2014

Applied Geography

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Farmers' cropping decisions are a product of a complex mix of socio-economic, cultural, and natural environments in which factors operating at a number of different spatial scales affect how farmers ultimately decide to use their land in any given year or over a set of years. Some environmentalists are concerned that increased demand for corn driven by ethanol production is leading to conversion of non-cropland into corn production (which we label as "extensification"). Ethanol industry advocates counter that more than enough corn supply comes from crop switching to corn and increased yields (which we label as "intensification"). In this study, we determine whether either response to corn demand --intensification or extensification --is supported. This is determined through an analysis of land-use/land-cover (LULC) data that covers the state of Kansas and a measure of a corn demand shifter related to ethanol production --distance to the closest ethanol plant --between 2007 and 2009.

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Section: (2) Methodsmentioning

confidence: 99%

Ethanol plant location and intensification vs. extensification of corn cropping in Kansas

Brown¹,

Hanley²,

Bergtold³

et al. 2014

Applied Geography

View full text Add to dashboard Cite

show abstract

“…Thus, profit maximization is a static problem in our model, except for the effect of current acreage decisions on future government payments. In many cropping systems there exist incentives to rotate crops that create dynamic complementarity in production (e.g., see Hennessy 2006). Incorporating the dynamic optimization implied by these crop rotation incentives would substantially complicate our model.…”

Section: Assumption 3 No Dynamic Complementarity In Productionmentioning

confidence: 99%

The Effects of Policy Expectations on Crop Supply, with an Application to Base Updating

Hendricks

Sumner

2014

American J Agri Economics

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We develop a dynamic model to assess the effects of policy expectations on crop supply and illustrate the approach with estimates of the effects of base updating in U.S. crop programs. For corn and soybeans in the Corn Belt, the effect of base updating is relatively small because relevant crop alternatives are subject to similar policies and the alternatives are substitutes in production. Increasing acreage of one program crop to capture future payments from base updating reduces future payments from the alternative crop. We also use our model to assess the effect of base updating on acreage response to prices.

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“…The optimal crop rotation is given by the following set of conditions (Hennessy 2006): Now consider the effect on planting decisions of an immediate unanticipated permanent change in output prices. Assuming constant prices in future crop years, the optimal rotation in the current year is either cc , ss , or cs .…”

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confidence: 99%

Crop Supply Dynamics and the Illusion of Partial Adjustment

Hendricks

Smith

Sumner

2014

American J Agri Economics

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We use field-level data to estimate the response of corn and soybean acreage to price shocks. Our sample contains more than eight million observations derived from satellite imagery and includes every field in Iowa, Illinois, and Indiana. We estimate that aggregate crop acreage responds more to price shocks in the short run than in the long run, and we show theoretically how the benefits of crop rotation generate this response pattern. In essence, farmers who change crops due to a price shock have an incentive to switch back to the previous crop to capture the benefits of crop rotation. Our result contradicts the long-held belief that agricultural supply responds gradually to price shocks through partial adjustment. We would not have obtained this result had we used county-level panel data. Standard econometric methods applied to county-level data produce estimates consistent with partial adjustment. We show that this apparent partial adjustment is illusory, and we demonstrate how it arises from the fact that fields in the same county are more similar to each other than to fields in other counties. This result underscores the importance of using models with appropriate micro-foundations and cautions against inferring micro-level rigidities from inertia in aggregate panel data. Our preferred estimate of the own-price long-run elasticity of corn acreage is 0.29 and the cross-price elasticity is -0.22. The corresponding elasticities for soybean acreage are 0.26 and -0.33. Our estimated short-run elasticities are 37 percent larger than their long-run counterparts. 2 How much more land gets allocated to a crop when relative prices change? The answer to this question is the central parameter for understanding world food prospects, the impacts of farm subsidies, and the environmental consequences from land use change, among other public and policy issues (e.g., Roberts and Schlenker 2013;Lichtenberg and Zilberman 1986;Searchinger et al. 2008;Donner and Kucharik 2008). We provide a new and better answer for an important set of commodities in the world food system. We use a conceptual approach that accounts for crop rotations, a massive sample of individual fields, and econometric methods that account for heterogeneous incentives to rotate crops and heterogeneous responses to prices. Moreover, we show that supply response is seriously misestimated when standard econometric methods are applied to county-level panel data. One consequence of this bias is a mistaken understanding of supply dynamics and, in particular, the relationship between short-run and long-run supply response.A typical agricultural field in the United States Corn Belt tends to alternate between growing corn in one year and soybeans the next. This pattern reflects a common agronomic feature of crop production: planting a crop on the same field in consecutive years decreases the productivity of the soil for growing that crop and increases pest populations. These features generate dynamic complementarity in crop production because the marginal valu...

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On Monoculture and the Structure of Crop Rotations

Cited by 81 publications

References 26 publications

Ethanol plant location and intensification vs. extensification of corn cropping in Kansas

Ethanol plant location and intensification vs. extensification of corn cropping in Kansas

The Effects of Policy Expectations on Crop Supply, with an Application to Base Updating

Crop Supply Dynamics and the Illusion of Partial Adjustment

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