Discovering new solutions for agriculture and natural resources.
Farmers are being affected by profound changes in the demand for agricultural products, rising costs of production, rapid advances in agricultural production technology, and uncertain government policies. These and other challenges make decisions about management strategies and practices complex. Understanding the economics and risks surrounding these decisions will help producers improve the bottom lines of their farm businesses and insure long-run economic stability for their farm business.
The Department of Agricultural and Resource Economics is uniquely positioned to evaluate many of these complex decisions that are relevant to farmers. Production economics research can be extended to producers, consultants, private industry, and government employees to help inform sound economic decisions, and to provide them with practical economic evaluation of emerging agricultural production technologies and production practices.
Farm management and production economists in the Department have conducted research on a broad variety of these issues such as precision farming, irrigation use, biotechnology, soil conservation practices, risk management strategies, soil fertility, and crop and livestock production practices.
Tennessee’s diverse array of natural resources supports strong agricultural and forestry industries as well as a wide variety of recreational activities. However, residential and commercial development is placing greater stresses on limited land and water resources. Thus, we face tremendous challenges in seeking to balance many competing demands on our natural resources and ensure that they are managed in economically, environmental, and socially sustainable ways.
The Department has placed a priority on analyzing the economic impacts of environmental policies and natural resource management. For example, natural resources research within the Department has focused on water quality and quantity management, urban verses rural land use challenges, and strategies for managing forestry.
Rural areas, typically characterized by low population densities and relative remoteness, face a variety of issues as they work to foster prosperity and growth in a rapidly changing world. Addressing these issues plays a central role in the Department’s mission to improve the resilience of rural economies and wellbeing.
The Department’s rural development focus includes: entrepreneurship, demographic change, regional economics, and the economic impacts and feasibility of agri-industry development.
Our rural development research activities include analyzing strategies and providing support for the economic and human development needed to enhance quality of life for rural Tennesseans. The Department’s Rural Development Working Group and Agri-Industry Modeling and Analysis Group, serve as opportunities for collaboration amongst Department faculty who engaged in research on a wide array of rural and international development issues.
There have been many changes in agricultural policy over the last few decades and research has sought to examine the effect these changes on the food and fiber industry as well as natural resource use. Changes in legislation at the state and federal levels of government (e.g., Farm Bill) can have an impact on both farmers and consumers of agricultural products such as food. Our department places an emphasis on following potential policy changes in order to provide information to impacted producers and/or consumers.
Current research in the Department focuses both on long-term issues of farm profitability as well as current issues such as crop insurance, international trade, biotechnology, bioenergy, and using agricultural land for carbon sequestration.
The food and fiber marketing system links farms to consumers via food manufacturing, wholesaling, and retailing. Transformation of farm products to consumer goods encompasses transportation, storage, processing, distribution, advertising, and marketing.
Risk management techniques associated with marketing agricultural products (e.g., forward contracting, futures and options) can help agricultural producers manage risks and safeguard profitability. Profitability, a function of pricing and cost structure, debt management, and assets efficiency, is better understood when farmers and agribusinesses keep accurate financial records. Decision makers appropriately managing the trade-off between profitability and risk increase their likelihood of long-term sustainability.
The Department of Agricultural and Resource Economics provides instruction and outreach designed to develop skills for analysis of food and fiber product markets and formulation of sound agribusiness marketing strategies. Economic and financial analysis is conducted to provide decision makers and policy makers with information about market decisions ranging from farm-level direct marketing through retail consumer food and fiber policy. Economic analyses include market arrangements, market consolidation and structural change, contracting, vertical coordination, new product development, and consumer food and nutrition choices. At the farm/agribusiness level, financial analysis include assets valuation, investment decisions, and financing.
Efficient transportation and handling systems are critical to the economic health of the agricultural sector in Tennessee and the rural communities which depend on this sector. In addition, the bioenergy industry also relies on an efficient logistics system to acquire the bulky biomass feedstocks.
Marketing of agricultural products to consumers is an ever-evolving process. More than ever, consumers demand information regarding the production processes used to create food (e.g., grass fed, cage free, natural) and the ingredients comprising the food (e.g., made with genetically modified ingredients).
The Department of Agricultural and Resource Economics is actively engaged with a number of agricultural and biofuel/biomass logistics issues. Economic analysis associated with agricultural and biomass logistics are considered in several of the undergraduate and graduate classes in the Department. Faculty in the Department also research consumer behavior/marketing, finance, agricultural commodity marketing, and logistics.
One of the biomass feedstock logistics projects, currently funded by the US Department of Energy, primarily focuses on the cost and quality of switchgrass and pine residues in an alternative logistics system for cellulosic biofuel sector. Another ongoing project funded by the Federal Aviation Authorities is evaluating the economics of alternative biomass feedstock for jet fuel production in the United States. Research faculty in the Department collaborate with experts from different departments, universities, and national laboratories to assist the development of a feasible bioenergy sector in the nation.
In addition to biomass feedstock logistics, research faculty in the Department also assess the economic impacts of inland waterway infrastructure system issue on U.S. grain and agricultural transportation sectors.