Factors Affecting Hay Supply and Demand in Tennessee

摘要: Understanding the interactions between supply and demand for hay is important because of hay’s significance to agricultural sector economy, an crop on highly erodible soils. As example, Tennessee has most cultivated cropland in United States (Denton, 2000), nearly half state’s current CRP acreage contracts are set expire 2007 (U.S. Department Agriculture, 2006), one economically crops produced state 2004). Cross (1999) attributed upward trend since 1980 increasing number farmers who were searching alternative production activities, such as hay, pasture livestock, replace row soils Congress, House Representatives Senate, 2002). Hay ranked tenth value receipts at $49.25 million 2006 cattle calf first $500 million. second $262 2003 averaged $248 over a five period from 2002 – 2006. Underscoring importance was national ranking fourth other (excluding alfalfa) 4.25 tons 2007). To quantify these relationships, must understand characteristics markets. Markets usually localized weight bulky physical hay. Although species not identical, many livestock situations close substitutes, with possible exception alfalfa In Tennessee, differentiated product used mostly by dairy equine producers. Nevertheless, constituted only 2.5% all 2004) its price tends move proportionally prices; thus, modeling purposes can be aggregated Shumway’s (1983) study Texas field treated composite commodity (Nicholson, 2005) called 2002, 47,000 operations within forage, while side, 50,000 involved beef another 24,000 Despite lack central markets (Cross, 1999), buyers sellers seem aware prices their area. Word mouth, directory website (Tennessee Farm Bureau Federation, 2005), Facts bulletin Agricultural Statistics Service, among primary outlets discovery (Rawls, September producers typically assumed takers (Shumway, 1983) large numbers buyers; nevertheless, search costs differentials result market. Even though have avenues determination short run, they little information about what causes change year year. The overall objective this research illustrate how understanding provide valuable policymakers. Using market specific objectives to: 1) determine factors that influence effects, 2) 3) briefly Estimating help making more informed business decisions policymakers insight into proposed policies might affect accomplish objectives, modeled econometrically, coefficients models acreage, yield, responses results then potential impacts 2008 retirement Conservation Reserve Program (CRP) 2007. proved fairly unresponsive output input both long runs. weak response own substitute may also being harvest effort guarantee reliable roughage feed herds throughout winter months. They willing give up potentially higher profits avert risk shortages cattle. appeared responsive real per capita income flexibility 1.55. This finding reasonable increase purchasing power typical household. increases, would expect consumption normal good (Schroeder Mark, 1999). Increased positively derived inputs; hence, increased A quantity (HPRODt) could explained structure. First, some produce amounts much which sold These able lower cost than price, or forgo savings buying off-farm source Additionally, unlike corn cattle, less organized structured. Farmers producing cash no nearby convenient grain elevator auction sell product. Weak changes suggests driven solely profit motive. Instead, motives enter functions utility maximizers.