Friday, January 27, 2017

Choices Magazine Theme on Herbicide Resistance

There was a really nice collection of articles recently featured in Choices:

From the theme overview:

"When resistant weeds are mobile, managing resistance can suffer from the classic “tragedy of the commons”—no one controls the resource—in this case, the effectiveness of herbicides—so no one manages it sustainably. For guidance on how to proceed, Ervin and Frisvold look to the research of Nobel laureate Elinor Ostrom and her colleagues on the management of common property resources (CPRs). "

This is the kind of work I was interested in in graduate school and this convergence of social science, economics, and genomics is very exciting. I veiwed the problem as an externality or commons problem that could be described by an Nash Equilibrium. In a later white paper I also discussed some of Elinor Ostrom's work in a similar context. If ever there was a middle ground for policy approaches to environmental challenges her work provides a nice foundation.

See also:

Game Theory, A Foundation for Agricultural Economics

Externalities, Coase, Ostrom & Demsetz

Sunday, January 22, 2017

Why corn is king when it comes to sustainably feeding a growing population

A few weeks ago there was a nice article in the Washington Post about a misguided vision emphasizing vegetables vs row crops as the focus for a sustainable food system:

We need to feed a growing planet. Vegetables aren't the answer.

I recently re-watched Food, Inc. One of the most egregious and misleading themes I get from that movie is that farm subsidies and our 'industrial' food system leads to a monoculture of mostly corn and soybeans that threatens both our health and environment. The WaPo article clearly explains why a shift away from row crops or commodity based cropping systems toward more vegetables is both non-pragmatic and more threatening to sustainably feeding the world.

There are a number of myths about commodity agriculture, monoculture, farm subsidies, and large scale agriculture, unfortunately many retailers and food products companies know how to exploit them.

See also:

 What's the big deal about farm subsidies? Four big questions about big ag, subsidies, food, and GMOs

Big Data + Genomics ≠ Your Grandparent's Monoculture

Monday, January 9, 2017

Whole Foods Facing Turf War With Mainstream Grocers

Via AgWeb:

"Whole Foods’ poor inventory and vendor management, high costs and failure to make the most of its unique appeal to millennial shoppers among the key issues…Larger mainstream grocers, including Kroger Co. and Wal-Mart Stores Inc., continue to advance on Whole Foods’ organic turf, weighing on sales. Kroger has a market value of about $29 billion and Wal-Mart is valued at about $214 billion. Whole Foods is trying to fight back by offering more discounts and starting a new chain aimed at younger shoppers. Organic products have become widely available at U.S. stores, often at lower prices than Whole Foods offers. Analysts have since questioned whether there’s capacity for more high-end organic grocers in the U.S."

MarketWatch did an interesting comparison of products and prices here.

I wonder what really motivates Whole Foods customers? this a true preference for taste and quality, or how much of this is actually driven by misperception and fear?

As the article says..."Larger mainstream grocers, including Kroger Co. and Wal-Mart Stores Inc., continue to advance on Whole Foods’ organic turf, weighing on sales." The kind of snake oil  marketing that firms like Dannon and Chipotle engage in has probably been a major driver of this fear and Kroger and Wal-Mart are exploiting the fact that now consumers are economizing on the fear and misconceptions that may have previously driven them to stores like Whole Foods.

Perhaps if Whole Foods can trim margins via better supply chain or inventory management (as suggested in the article) that will help with pricing more competitively. It seems like they may also need to capitalize on some other source of differentiation in products or services. I don't see food fads and fears going away anytime soon unfortunately.

See also:

Modern Sustainable Agriculture 


The Twisted Economics of Local Food

Saturday, January 7, 2017

Monsanto Expanding CRISPR Technology Rights


"Two other companies, DuPont Pioneer and Calyxt, are currently using CRISPR gene-editing techniques for agricultural applications, GenomeWeb reported. In addition, the Life Science Center at Bayer—the European pharma giant that recently made an offer to buy Monsanto—has licensed CRISPR for biomedical uses, but the company’s Crop Science division has not obtained a license for CRISPR/Cas9."

In a previous post (CRISPR Technology and Agriculture) I speculated that companies like Monsanto would leverage this technology heavily with less emphasis on traditional recombinant DNA based techniques (aka GMOs). The article above indicates some synergy between Monsanto and Bayer in this regard in terms of licensing and applications related to crop science. 


How Big Data and Genomics are Crushing the Myth of Monoculture

Wednesday, January 4, 2017

GIPSA , Lemons, and Cattle Markets

I was recently reading about how proposed GIPSA rules will impact cattle marketing in Beef magazine:

Here is one slice from the article:

"USDA’s decision to move forward with publishing final rulemaking on the 2010 Grain Inspection, Packers and Stockyards Act (GIPSA) could force packers to pay the same price for all cattle. That would narrow or remove any spread in prices offered by cattle feeders. So, every cow-calf producer would receive the same price for calves, regardless of value."

Other places in the article talk about alternative marketing arrangements (AMAs) and thinning cash markets as well. But one thing I always thought, was that AMAs were one way that the market worked to solve the lemons problem. Conventionally, people might support regulation in cases where there are in fact lemons, and they want government intervention to fix the so called market failure.

You can read about lemons markets here, but generally in the case of cattle marketing, if you are a buyer and not sure about the quality of cattle you are buying, you would at best assume average quality and pay an average price in order to avoid overpaying for bad cattle. Unfortunately producers with good cattle would not receive a price that reflected superior genetics or management that they have invested in.  AMAs help identify better cattle with specific traits of interest and allow producers to get more for their value and allow buyers to get the quality they want without overpaying.

This looks like a case where the market solved a major problem, and the new GIPSA rule may in effect create a lemons problem all over again. The article does a good job describing the ramifications to producers, buyers, and consumers.