| [ Home ] [ Mission ] [ Organization ] [ Research ] [ Publications ] [ Position Announcement ] |
| |
| RESEARCH |
Research Areas: |
| This research center analyzes a wide range of agricultural trade and
policy issues for decision makers in private and public sectors. Some of the areas are:
|
| |
Agricultural policies and programs
|
Agricultural trade policies - multilateral and bilateral trade
|
Global competitiveness for Northern Plains crops and products
|
Foreign market development and export strategies for Northern Plains crops and products
|
U.S./Canada trade under NAFTA
|
Economics
of Bio-Energy |
| |
| Research Tools: |
Global Wheat Policy Simulation Model (GWPSM)
|
Global Sugar Policy Simulation Model (GSPSM)
|
ND Representative Farm Model
|
| |
| Global Wheat Policy Simulation Model |
This model was developed to evaluate the U.S. and world wheat industries. Wheat is divided
into common and durum wheat. The Global Wheat Policy Simulation Model is a partial
equilibrium model that distinguishes two classes of wheat. U.S. common wheat is further
divided into four classes: hard red winter, hard red spring, soft red winter, and white
wheat.
|
The model contains 5 exporting countries and regions (Argentina,
Australia, Canada, the United States, and the European Union) and 13 importing countries
and regions (Algeria, Brazil, China, Egypt, the Former Soviet Union, Japan, Mexico,
Morocco, South Korea, Taiwan, Tunisia, Venezuela, and a Rest of the World Region). Wheat
production, consumption, and carry-over stock equations in major producing and consuming
countries are estimated with time series data by using econometric techniques. The
estimated equations are linked under a partial equilibrium condition in the world wheat
industry. The model is solved for a set of equilibrium wheat prices in which demand for
each wheat class equals supply for every year.
|
The model is based on an assumption that current farm and
trade policies adopted by wheat exporting and importing countries are unchanged.
Assumptions associated with macroeconomic variables, such as GDP growth rates, interest
rates, inflation rates, exchange rates, and consumer price indices in the United States
and other countries are based on forecasts prepared by the WEFA Group and Project LINK.
Average weather conditions and historical rates of technological change are also assumed
to prevail during the projection period. It is generally assumed that current agricultural
policy will be continued in the countries. The price of wheat in individual countries and
the world market is endogenous, while the prices of other crops are exogenous. Thus, the
baseline projection of the model is based on the forecasted world prices of other crops
which have substitute and complementary relationships with wheat. The forecasted prices
were obtained from the FAPRI baseline solution.
|
| Global Sugar Policy Simulation Model |
The Global Sugar Policy Simulation Model was developed by dividing sugar into beet and
cane sugar. This model includes 17 sugar producing and consuming countries. Some of these
countries are beet sugar producing countries (Algeria, Canada, the EU, and the FSU) and
some are cane sugar producing countries (Australia, Brazil, Cuba, India, Indonesia,
Mexico, South Africa, and Thailand). The remaining countries (China, Japan, and the United
States) produce both beet and cane sugar. These two sugars are perfectly substitutable in
consumption, but are differentiated in the production process. Sugarcane is produced in
tropical and subtropical climate zones. Once the cane is harvested, the sucrose starts
breaking down. Thus, to minimize transport costs and sucrose losses, sugarcane mills are
located close to cane fields. Mills convert sugarcane into raw sugar that is shipped to
refineries for further processing for refined sugar. On the other hand, sugarbeets are
produced in temperate climate zones. Since sugarbeets are bulky and costly to transport,
beet processing facilities are located near the fields and process beets into refined
sugar.
|
Sugar production, consumption, and carry-over stock equations in major producing and
consuming countries are estimated with time series data by using econometric techniques.
The estimated equations are linked under a partial equilibrium condition in the world
sugar industry. In the market clearing condition, the sum of each country’s excess
demand equation for sugar, which is a function of the world price of sugar, is zero. This
aggregate excess demand equation is solved for the equilibrium price of sugar.
|
The model is grounded on a series of assumptions associated with the general economy,
agricultural policies, and technological changes in exporting and importing countries.
Macro assumptions are based on forecasts prepared by the WEFA group and Project LINK. Some
of the macro variables are GDP growth rates, interest rates, exchange rates, and inflation
rates in the countries. It is generally assumed that current agricultural policy will be
continued in the countries. Average weather conditions and historical rates of
technological change are assumed to prevail during the projection period. The price of
sugar in individual countries and the world market is endogenous, while the prices of
other crops are exogenous. Thus, the baseline projection of the model is based on the
forecasted world prices of other crops which have substitute and complementary
relationships with sugarbeets and sugarcane. The forecasted prices were obtained from the
FAPRI baseline solution.
|
| North Dakota Representative Farm Model |
| The North Dakota Representative Farm Model is a stochastic simulation
model that analyzes the impacts of policy changes on farm income. The model
projects average net farm incomes, debt-to-asset ratios, cash rents, and cropland prices
for representative farms producing five major crops: wheat, barley, corn, soybeans, and
sunflowers. The model is linked to the FAPRI and North Dakota Global Wheat Policy
Simulation Models and uses the prices of the crops generated from the models. In addition,
macro policies and assumptions, trade policies, and agricultural policies are incorporated
into the model directly or indirectly. |
| Farm policies affect net farm income for the representative farms.
Changes in return to cropland, given the market-determined capitalization rate, result in
changes in land prices. Changes in land prices affect cash rental rates farmers are
willing to pay on land used to produce crops. Changes in land price and cash rental in
turn affect net farm income through adjustments in farm expenses. These changes affect the
debt-to-asset ratios of the representative farms. |
| The model has 12 representative farms, three farms in each of four
regions of North Dakota. These regions are the Red River Valley (RRV), North Central (NC),
South Central (SC), and Western (West). Farms in each region are representative of small,
medium, and large size farms enrolled in the North Dakota Farm and Ranch Business
Management Association. The large farm is the average of the largest 25 percent of farms
in cropland acres for each producing region. The small representative farm is the average
of the smallest 25 percent of farms for each producing region. The medium size farm is the
average of the remaining 50 percent of farms. The average farm sizes are 2,358 cropland
acres for the large size farm, 1,182 cropland acres for the medium size farm, and 475
cropland acres for the small size farm. |
| The model has 12 representative farms based on management efficiency,
three farms (high profit, average profit, and low profit farms) in each region. The
average profit representative farm is an average of all farms in the Farm and Ranch
Business Management Records System in each region. The high profit representative farm is
an average of farms in the top 20 percent of farm profitability for each region. The low
profit representative farm is an average of farms in the low 20 percent of farm
profitability for each region. |
|
Current Research:
|
 |
Issues
related to the 2000 Doha of the WTO negotiations for Northern Plains
agriculture
|
|
Analysis of 2008 farm bill for Northern Plains agriculture
|
|
Impacts
of continuous dollar depreciation on U.S. agricultural exports
|
| Analysis of Asian markets for Northern Plains agricultural commodities and products |
| U.S. cane and beet sugar industries under alternative sugar trade liberalization
policies |
| Outlooks for the U.S. wheat and sugar industries |
|
Outlooks for the
North Dakota farm economy |
|
Economics
of corn and cellulose ethanol production in the Northern Plains
|
|
|
