Economic Evaluation and Modeling of Agricultural Production and Responses to External Factors
The future of agricultural commodity programs and related Farm Bill titles is uncertain in the face of pressure to make dramatic deficit reductions. The future of commodity policies is uncertain, as are the impacts on production patterns if the funds for Title 1 of the Farm Bill are dramatically reduced. U.S. Agriculture is also impacted by such external factors as trade legislation, environmental regulations, weather conditions (drought, floods, freezes, etc.), diseases (wind borne, seed borne, and insect borne) and market structures in sectors or businesses which purchase agricultural products as inputs. Agricultural commodity policies have even been blamed for contributing to America's epidemic of obesity. High prices for grains are said to be the result of ethanol policies. Obviously agricultural producers are likely to face many and varied
challenges in the near future. Idaho's economy is still largely resource based and therefore the economic health of the state depends in no small measure on the economic health of Idaho agriculture. Idaho agriculture has witnessed steady but dramatic, changes over the last decade. Dairy production has supplanted potatoes as Idaho's number one agricultural output. A large manufacturer of Greek yogurt has decided to locate in Idaho, increasing the demand for a steady supply of quality milk. Still, establishment of new animal agriculture businesses faces stiff opposition from the general public. This is due to the perceived externalities which would result in negative environmental impacts in areas near the proposed business. Existing dairy and livestock businesses are also impacted by public opinion and changes in environmental regulations. Persistent and short term drought conditions
continue to plague much of the Western United States. This season's snow pack is well below averages and that portends the lack of irrigation water for the coming growing season. Drought conditions impact not only crop agriculture, but livestock production as well. Irrigated and dryland agriculture are both impacted, particularly when the irrigated areas depend on winter precipitation to fill the reservoir system for summer irrigation. Competing uses of water, including the need for increased flows to help the salmon runs, also impact agriculture. Changing crop production patterns in the face of gradual climate change will impact the quality and quantity of crops grown. These persistent issues will continue to impact the production patterns across Idaho in terms of crops, rotations, and best management practice. Economic analysis of impacts on agriculture from changes in these myriad
factors can improve society's understanding of how changes in public policies will affect the agricultural sector. Such analysis will also aid in the design of better public policies, since policy makers will possess better information on the outcomes of various proposed policies. On the other side of the policy process, farmers and agribusiness must be aware of possible policy changes and their impacts on their businesses.