Abstracts of Recently Completed

Theses/ Dissertations

• Price Risk Management in the Marketing of Natural Gas in a Deregulated Environment (Thesis), Dilshod Abdulhamidov (2002)
  
  Abstract: Deregulation of utilities in the United States has been a much discussed topic. From deregulation of electricity in California to deregulation of natural gas in Georgia, there has been a glaring need for price risk management by marketers and distributors. This study presents a framework to analyze price risk management strategies using futures contracts that can insulate marketers from changing prices and stabilize revenues for local distributors. This study analyzed natural gas deregulation in Georgia. Several marketing strategies to reduce city gate and retail price risks were implemented. Out-of-sample execution of each strategy is compared to the other strategies to determine the most effective strategy from the buying and selling perspective. The results reveal that hedging retail prices with futures contracts does not reduce price risks, since retail basis appears to be unstable over time. Applying a strategic hedging strategy requires stability of futures price distribution over several years.

• The Impact of Currency Devaluation on US Poultry Exports: the Case of Russia (Thesis), Bella Ablayeva (2001)
  
  Abstract: The objectives of this study were to describe the Russian market for imported US poultry meat in the 1990s and to analyze the impact of the Russian ruble devaluation on the volume and value of US chicken leg quarter exports to Russia. The currency devaluation shock was simulated using the Global Trade Analysis Project (GTAP) as combined effects of a subsidy on all Russian exports and tax on all imports. The results include changes in world poultry prices, trade and production. Following the 75% ruble depreciation, Russian poultry imports fell and domestic prices of poultry and other foods rose. US poultry meat exports to the Russian market declined, pushing more dark meat onto the domestic market and other export destinations. Prices in the US wholesale market fell. Thus, exchange rate changes in a primary export market had a ripple effect on the commodity in both the importing and exporting country.

• Water Users Associations in Armenia : Analysis of Current Situation and Future Trends (Thesis), Arusyak Alaverdyan (2003)
  
  Abstract: The experience of Water Consumers Cooperatives accumulated in Armenia during the past six years has been mixed. On one hand, some of the cooperatives have provided evidence of being potentially capable of organizing themselves and responding to the needs of their members more effectively than any central governmental organization. On the other hand, many other aspects are still unresolved. Created in 2001 the State Committee for Water Economy (SCWE) agreed recently to follow a more participatory approach in establishment of Water Users Associations and, on the basis of positive experiences worldwide, SCWE is willing also to scale up the process to the level of Water Users Federations.

• The Feasibility of Securitizing Disaster Risk in Agriculture Using Catastrophe Bonds (Dissertation), Wei Bai (2003)
  
  Abstract: This study makes an initial step towards designing catastrophe (CAT) bond products for agriculture making possible the transfer of natural disaster risks from insurance companies to investors/speculators in the global capital market. The CAT bond contracts were created in a typical agricultural setting - in this case, a setting where a crop insurance company writes crop insurance policies for cotton and peanuts in Georgia. The CAT bonds were priced based on state-level average yield data. Trigger density estimation determines the accuracy of the probability of the CAT bond being triggered and thus affects CAT bond prices. The proposed index triggers in the agricultural CAT bond contracts are based on percent deviation from state average yield. Yield detrending plays a crucial role in computing yield loss and therefore estimating trigger densities. The spline modeling procedure makes it possible to capture the stochastic components in the yield data for more accurate kernel density estimation. Quartic kernel density estimation with suitable bandwidth gives an appropriate curve for generating accurate probabilities of CAT bond triggering. The principal finding of the study is that it is feasible for crop insurance companies to issue insurance-linked securities. CAT bonds can be used in hedging catastrophic risk effectively in agriculture given the common practice that crop insurance companies seek to minimize the variance of the loss ratio. CAT bonds can reduce the variance of the loss ratio when issued optimally with respect to the number of bonds and contract specifications. CAT bonds were found to be feasible even in the range of normal losses commonly covered by crop insurance and reinsurance. Thus, the usefulness of CAT bonds in agriculture has been shown to be much greater than anticipated.

• The Determination of Farm Service Agency Loan Size: the Georgia Case (Thesis), Rodney Lamont Brooks (2003)
  
  Abstract: The Farm Service Agency (FSA) administers two types of loan programs - Direct and Guaranteed - which cater to borrowers in different financial situations. These programs are considered to be temporary and last resorts for distressed farmers. This study sought to validate the contention that the FSA operates as a "lender of last resort" for farm borrowers considered highly risky by other lenders and that the FSA performs its role without discriminating against socially disadvantaged applicants. The loan portfolio data are for Georgia for the period 1999 to 2002. The hypothesized model contains the common components of previous credit scoring models plus binary variables to capture differences in regional lending practices and identified probable indicators of discriminatory lending practices. According to the findings of this study, the FSA seems to be living up to its primary role as the lender of last resort for farmers who have experienced hardships. The FSA seemingly does not scrutinize the financial backgrounds of borrowers as one would expect from commercial lenders. Thus, the financial background of a borrower appears not to have a significant effect on the size of loans granted by the FSA. This is apparent for both FSA loan types - Direct and Guaranteed.

• The Response of Agricultural Water Use to Changes in Pumping Costs (Thesis), Yassert Arafat Gonzalez-Alvarez (2002)
  
  Abstract: Water is a scarce good without a price in riparian doctrined-governed Georgia. Differences in pumping costs are used to infer how farmers will respond to water price changes. Water demand equations have been estimated using OLS procedures. Price and quantity are pumping cost per unit and total acre-feet per acre applied, respectively. Inelastic water demand estimates obtained ranged from -0.15 to -0.27.

• Cost-Effective Management Practices to Improve Water Quality in the Stekoa Creek Watershed (Thesis), Oussama Marseli (2001)
  
  Abstract: Estimates form the Non Point Source Model of Better Assessment Science Integrating Point and Nonpoint Sources (BASINS) indicate that Stekoa Creek watershed is not currently meeting three Fecal coliform water quality standards for its fishing designated use. The first, daily 4000 Most Probable Number colonies/100 ml at any time standard, is exceeded 6% of the time. The second and third standards, 30-day geometric mean 1000 MPN col/100 ml (November –April) and 200 MPN col/100 ml (May and October), are exceeded all the time. The most cost-effective management practices to ameliorate this non-compliance consist of repairing leaking sewage pipes and limiting cattle access to the stream. These two practices contribute 80% and 12% to total simulated loading of Fecal coliform, respectively. For an investment of $128,975, this study predicts a full compliance with the first two standards, a partial compliance (28% exceedance) with the third standard, and a net increase in the recreational benefits of Chattooga River of $3,769,671 over 25 years.

• Factors Influencing Irrigation Technology and Water Management in Georgia (Thesis), Augustus Nyako Matekole (2003)
  
  Abstract: Improved irrigation technology and water management could increase water conservation. This study focused on factors impacting farmers’ adoption of newer water irrigation technologies and water management practices in Georgia. A mail-out questionnaire was administered to irrigation farmers on comparative costs of irrigation systems and farm irrigation water management practices. Farmers were knowledgeable on current comparative costs of different irrigation systems. Important factors to farmers in purchasing irrigation systems were: water delivery efficiency, labor requirements and maintenance expense. Multivariate linear regression was used to estimate the degree to which certain factors influence irrigation water use. Results show higher pumping costs are accompanied by reduced irrigation water use. Inclusion of irrigation water management variables in the estimation of irrigation water use, improved the performance of the model.

• An Analysis of Georgia's Landscape Plant Retail Markets (Thesis), Chandler Blalock McClellan (2003)
  
  Abstract: Using data of landscape plant purchasing habits of Georgian consumers from the past 15 years, this study examines the target markets for landscape retailers First, logistic regressions are used to determine the effect that various demographic and socio-economic variables have on the decision to buy and how much is spent on landscape plants. Next, tobit analysis is applied to the decision to purchase at a particular type of retail outlet. The buyer's decision to patronize a particulare retail type is assumed to be a function of the buyer's demographics, and is also assumed to shift over time as the market develops. Finally, this study examines landscape plant expenditures based on geographical location. Using GIS analysis, plant expenditures are mapped by county and examined for patterns that might emerge based on geography. Using these techniques, retailers can develop efficient marketing plans to maximize profits.

• A Linear Programming Analysis of Profitability and Resource Allocation Among Cotton and Peanuts Considering Transgenic Seed Technologies and Harvest Timeliness (Thesis), Timothy Al Meeks (2002)
  
  Abstract: Production of cotton and peanut enterprises in rotation are typical of South Georgia. With limited resources like land and labor, efficient allocation of those resources is required. Throughout the growing season, the crops require producers to make decisions of how to allocate the resources allocated for various activities required to produce the crop. Particularly, efficient allocation of resources at harvest, are necessary, as harvest timeliness is believed to be a continual problem in the rotation of these two crops. Little research exist in Georgia in the area of harvest timeliness, however agriculturalist continue to believe revenues, being lost due to harvest timeliness, are significant based on present production strategies. Through economical analysis and linear programming optimization, the harvest timeliness issue is addressed in this research. After constructing a “typical” South Georgia farm and a linear programming optimization model, the characteristics of the typical farm are incorporated into the linear programming model and is optimized. The function to be optimized is net returns rather than profit because the research does not take into account fixed costs. After the initial model is optimized, it is compared to the present production strategies to determine if producers are allocating their resources properly, based on assumptions made in this research. Scenarios based on the original model are conducted to determine the sensitivity of the constraints imposed. Conclusions dictate producers may need to adjust their production strategies throughout the growing season- particularly at harvest.

• An Economic Evaluation of Cotton and Peanut Research in Southeastern United States (Thesis), Anna Lyn Rickett (2000)
  
  Abstract: The purpose of this study is to utilize the economic surplus framework for evaluating the impact of investment in agricultural research. The economic impact measures used in this study are the total benefits and distribution of those benefits associated with investment in agricultural research. These results are used to calculate an internal rate of return on the investments. The focus of the research is on cotton and peanuts in the Southeast region of the United States. Two equations are estimated to determine the impacts of the money being spent on the research efforts of these two commodities.<p>The results reveal the positive benefits to consumers and producers exceed the investment amount in a present value sense. Total social benefits average about 201 million dollars (1982 dollars) annually for cotton research and about 191 million from peanut research. The internal rates of return were 53.58 percent for cotton and 23.87 percent for peanuts, suggesting that past research investments produced a high return to society. These results generally agree with the results of other similar studies.

• The Dairy Industry of Trinidad and Tobago: an Economic Analysis (Thesis), Lesroy Emanuel Samuel (2003)
  
  Abstract: The dairy industry of Trinidad and Tobago is important to the social and economic development of the twin island state. The industry has experienced fluctuations in production over the past decades, has shown no change in production over the past few years, and is expected to decline without policy changes. Most of the efforts to encourage dairy development have focused on larger farms, with the smaller farms mostly neglected. The industry is constrained by high labor cost, lack of funds, competition with imported powdered milk, and lack of government support. The objectives of this study are to investigate whether there is a difference in productivity between hired labor and family operated farms and between large and small farms. An F-test was used to test for difference in productivity between farms. The results show no significant difference in productivity between small and large farms and, also, no significant difference between hired labor and family operated farms. Therefore, large and small farms should be given similar considerations. Family labor could be substituted for hired labor where practical and economically feasible.

• Economic and Environmental Evaluation of Dairy Manure Utilization for Year Round Crop Production (Dissertation), Zana Constantin Somda (2003)
  
  Abstract: Dairy farms with limited amounts of land potentially develop an imbalance of manure nutrients. Reducing the impact of excess on-farm manure nutrients on water pollution necessitates a method for determining carrying capacity allocating the manure supply. An efficient approach to address this problem requires balancing manure nutrient and crop uptake and crop nutrient and animal use. A whole farm linear programming model was used to balance animal nutrient use, plant nutrient production in manure, animal nutrient production by crops and manure nutrient utilization by plants. The theoretical underpinning of this analysis is expected utility maximization. The producer maximizes expected utility by considering milk production, manure production, the ability of crops to take up manure nutrients and the supply of forage for cow rations. This model is utilized to determine economically optimal dairy herd intensities, and crop mix for unrestricted and restricted scenarios of nutrient losses. Representative farm operations were simulated for dairies with 600 available cropland acres and flexible cow numbers and for dairies with 500 cows and flexible cropland acres that utilized manure for year round crop production. The results showed that farms were substantially affected by the imposition of restrictions on N and P losses, although profitability decreases were smaller on the farm when restrictions were imposed on N alone than farms when restrictions were on P alone. When a fixed land base was net returns to land and management was reduced by 5.8% and 56.8% on the farms with N and P restrictions, respectively, compared with 6.7 and 9.7% when acre adjustments were allowed for a farm with 500 cows. The model developed provides farmers with a tool most profitably meet current and future surplus nutrient applications. Whether dairy farmers are able to make cropland adjustments under N and P loss may well determine future sustainability and survival of the farming operations. If additional acres are not available or feasible to acquire, herd reductions may be necessary to meet restrictions on N and P.

• Estimation of Production Function and Related Labor Risk Considerations for Landscape and Lawn Care Firms in Georgia (Thesis), Anil Kumar Sulgham (2001)
  
  Abstract: The fast growing landscape and lawn care industry deserves attention, but research has been limited by data availability. Primary data, collected through a mail survey from firms providing services, allow disaggregated analysis. This study attempts to estimate the production function with a focus on labor associated risk of landscape maintenance and lawn care firms in Georgia, a state experiencing a rapid expansion of the “green industry.” A three stage estimation agricultural production function framework suggested by Pope and Just (1979) was applied to estimation of production function. The results suggest that labor costs, plant material costs, chemical costs, and acreage serviced by a firm are important for output of a firm and labor turnover is a potential source of risk for the landscape maintenance and lawn care industry.

• Forecasting Irrigation Water Demand: an Application to the Flint River Basin (Dissertation), Irfan Yousuf Tareen (2001)
  
  Abstract: Volatility is inherent in all empirical financial models. It enters the model through investor behavior with implications to the price of the asset. The specific form this volatility takes is in its dependence on the past values. Financial time series display autocorrelated volatility with the variance of returns on assets changing over time. A method, due to Engle (1982), for modeling volatility is known as autoregressive conditional heteroscedasticity (ARCH). ARCH models securities returns data with a heteroscedastic error term allowing the conditional variance to be a function of the squares of previous observations on stock prices and past variances. Stochastic Volatility (SVOL) model, an alternative to using the ARCH framework, is examined here that allows both the conditional mean and variance to be driven by separate stochastic processes. The changing variance in such models follows some latent stochastic process. This is an advantage over the ARCH class of models in that the SVOL model has the potential to parsimoniously model the volatility process itself versus an ARCH specification that models the conditional expectation of the volatility. There is evidence in the time-series literature suggesting that correlation between the errors distribution introduces the leverage effect that is important in characterizing the behavior of stock returns. The present analysis tests the hypothesis that the alternate disturbance term assumption would produce improved volatility forecasts in the securities market and ultimately superior timing of entry and exit in the stock/derivative market. Augmenting the data set and considering correlated error terms results in improved estimates of the standard
  errors. However, this study, in agreement with some previous analyses, shows a lack of evidence for the leverage effect.

• Analyzing the Success of Strategic Rollover Hedging for Cocoa (Thesis), Tamika Nichole Tolbert (2002)
  
  Abstract: There have been wide swings in cocoa prices, and periods of extremely high and low prices. Attempts have been made through the International Cocoa Agreement to stabilize cocoa prices, but its efforts have been unsuccessful. The purpose of this research is to analyze cocoa prices from 1961-2000 and find alternative ways to protect producers from unstable cocoa prices. Several procedures were used in this analysis. First, attention is given to previous research on the causal factors of price volatility in the cocoa market and the history of the structural changes that took place in the cocoa market from the 1960s to 2000. Next, a fundamental analysis of the cocoa market was done to determine the relationship between end-of-year cocoa stocks and prices. A seasonal analysis also was done to determine if a seasonal pattern existed for cocoa prices and to determine which month had the highest seasonal index. Lastly, alternative price risk management strategies, such as routine hedging, strategic rollover hedging, and cash sales at harvest were analyzed to determine if any of the strategies were successful at stabilizing routinely volatile cocoa prices. The results of this research indicate that despite the effectiveness of strategic rollover hedging to improve average net prices for commodities such as corn and soybeans, the outcome for cocoa was unsuccessful. Using strategic rollover hedging from 1971-2000, resulted in a loss of $304,825.72. This included $50 per round turn for brokerage fees, without the consideration of margin calls. However, implementing the routine hedging strategy every year in the month with the highest seasonal index generated net revenues of $15,916.34 from 1971-2000.

• An Analysis of NAFTA and Other Factors Impacting the U.S.-Mexico Fresh Winter Tomato Market (Thesis), Mawar Andromeda Tresna (2003)
  
  Abstract: The market for winter tomatoes in the U.S. is very important to Florida and Mexican producers. In 1995, Florida producers filed a petition with the U.S. International Trade Commission (ITC) to seek protection because of a Mexican tomato import surge to the U.S. market. Florida producers also claimed that Mexican producers were dumping tomatoes in the U.S. market. In this study, we examined factors that may have affected Florida and Mexico shares of the U.S. fresh winter tomato market. Threestage least squares were used to estimate supply, demand, and excess supply equations. The results suggest that Mexican exports were responsive to the peso devaluation and prices in the U.S. and Mexican markets and that U.S. producers reacted to the passage of NAFTA and the suspension agreement of late 1996, which suspended the ITC antidumping investigation and set a minimum price for imported Mexican tomatoes.

• An Analysis of U.S. Chicken Exports to China (Thesis), Li Zhang (2002)
  
  Abstract: The United States is the world’s largest poultry producer and exporter. Hong Kong/China has been the second largest market for U.S. poultry products in recent years. The growth potential for chicken exports to this market is great, given China’s large population, relatively low per capita consumption of chicken, expected rising incomes, and the recent inclusion of China in the WTO. In this study, we examined the exports of different frozen chicken parts from the U.S. to Hong Kong/China. Excess supply and demand equations were estimated using three stage least squares, and elasticities were calculated. The results indicate that there may be some differences in income elasticities and price flexibility coefficients of different parts, and suggests that the U.S. may treat Hong Kong/China as a residual market for lower valued parts.