Cotton Economics Research Institute

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The Cotton Economics Research Institute (CERI) coordinated economic research activities on all aspects of cotton research (e.g., production, marketing, trade, processing, value added) within Texas Tech University and other research units throughout the United States and other countries.


Recent Submissions

Now showing 1 - 20 of 242
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    Daily Hedonic Price Analysis in Cotton: An Alternative Approach for Providing Market Information
    (NCR-134, 1995) Brown, Jeff; Ethridge, Don; Hudson, Darren
    Information on prices of commodities that are. differentiated by quality is important for understanding how the markets where these goods are traded operate. Hedonic price analysis provides a means to address this issue. Through econometric estimation, the overall price of a good can he disaggregated into its components. That is, the value or "price" of a quality attribute can he estimated through econometric analysis. This allows one to disaggregate the observed (aggregated) price of the product into its component parts based on the different levels of quality of the commodity. The hedonic approach has been well-established for some time, but it has not previously been applied to the daily analysis and reporting of prices.
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    An Economic Analysis of Waste Management for Texas Cattle Feedlots: An Analysis of System Alternative and Policy Implications
    (1994) Glover, Teresa P.; Segarra, Eduardo; Johnson, Phillip
    Over 20 percent of the nation's fed cattle are finished each year in the Texas High Plains. each animal that is fed produces approximately one dry ton of collectible manure. This equals about two dry tons of collectible manure per year per head of feedlot capacity. Given the amount of cropland in crop production on the High Plains, there is a potential demand for all manure produced. The general objective of this thesis was to determine efficient waste management strategies which would be environmentally benign while benefiting agricultural producers. Specific objective were sought with respect to the physical aspects, cost of manure management, derivation of manure demand curves, and possible policy implications. Mathematical optimization models for two study areas in the Texas Panhandle were developed with the objective of maximization of net returns. The primary differences between the Northern Farm Area and the Transition Farm Area were the addition of cotton production it the Transition Farm Area as well as decreased farm size. Crop supply and input demand functions were determined using duality theory. Land application of manure was determined to be an optimal approach to waste management in the Texas High Plains. It was found that manure would be demanded at a lower price in the Transition Farm Area, as opposed to the Northern Farm Area. The resulting lower price was due to smaller average farm size a well as the incorporation of cotton production in the model, this leading to lower nitrogen requirements that that of corn production. The demand for manure and commercial fertilizer increased when the government program participation was excluded and the final output price was allowed to vary. Water availability served as a supply and demand shifter in the model. As water availability increased, corn production increased, this increasing the demand for manure and commercial fertilizer. However, the supply of sorghum and wheat were found to have a negative relationship with water availability.
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    Optimizing Nitrogen Use in Cotton Production
    (The Society for Computer Simulation, 1989) Segarra, Eduardo
    This paper presents a dynamic optimization model used to derive nitrogen fertilizer optimal decision rules for irrigated cotton production in the Southern High Plains of Texas. Components of the dynamic optimization model used in this study uses both experimental and simulated data. Results indicate that dynamic optimal nitrogen applications critically depend on initial nitrate-nitrogen levels and cotton and nitrogen prices. It is shown that the adoption of the nitrogen optimal decision rules could help to improve the cash-flow situation of agricultural producers and would contribute to improve water quality in the Southern High Plains of Texas.
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    Production and Disposal/Utilization of Cotton Ginwaste from the Texas High and Low Plains
    (National Cotton Council of America, 1998) Elam, Emmett; Castleberry, Mark
    The 1996-97 Texas High and Low Plains Cotton Gin Waste (CGW) Utilization Survey was developed to provide a current assessment of the disposal methods used by gin operators. Results indicate that from a ginner's perspective costs associate with CGW disposal have increased since 1977. Results further suggest that even though basic disposal methods have remained constant, use of these methods had changed with compost and livestock feed increasing relative to soil amendment.
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    An Economic Analysis of Sturctural Relationships in the U.S. Cotton Sector
    (National Cotton Council of America, 1985) Ethridge, Don E.; Roy, Sujit K.; Alipoe, Dovi-Akue
    An econometric model was developed to represent the structural relationships of the U.S. cotton sector. The simultaneous equation model consisted of six endogenous variables including the domestic mill use of the U.S. cotton, domestic cotton inventories, U.S. exports to non-Communist countries, and the world price for U.S. cotton. Elasticities were estimated from the model for the domestic cotton price and the polyester price, and for cotton inventories with respect to the loan rate and the domestic cotton price. Elasticities were also obtained to estimate the effects of world price, exchange rates, and export financing on U.S. cotton exports. These elasticity estimates when compared to earlier estimates indicated important changes in the cotton sector since the the 1960's
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    Factors Infuencing the Value of Cotton Land in the Southern High Plains of Texas
    (National Cotton Council of America, 1983) Stoecker, Arthur L.; Ethridge, Don E.; Matthews, Ken H.
    Crop production in the Southern High Plains of Texas has been dominated by cotton since acreage controls were abolished in the early 1970s and land values in the region are affected by the economic health of the cotton industry. A multiple regression analysis of the factors affecting values of individual land parcels in a seven-county, cotton-dominated portion of the Southern High Plains is presented. Returns from cotton production were found to have significant effect on land values during the 1974-79 study period. The effect on land prices of cotton prices and yields along with other economic variables, such as interest rates, parcel size, and distance from markets, were analyzed and are discussed. The results indicate that non-farm influences had a larger impact on farm land values than did farm production related variables during the period of the study.
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    Excess Capacity in Ginning: Is There Reason for Concern?
    (National Cotton Council of America, 1984) Myers, David; Ethridge, Don E.
    The existence of excess capacity in the cotton ginning industry is well documented and has been identified as an efficiency issues of market structure in the industry and its efficiency implications. Evidence on market structure and ginning charges is examined.
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    Cotton Yields in the Sub-Areas of the Southwest
    (National Cotton Council of America, 1984) Stoecker, Arthur; Ethridge, Don; Neal, Tamera
    Descriptions of cotton yields in the major sub-areas of the Southwest production region--High Plains, Rolling Plains, Lower Rip Grande, Coastal Bend, and Blackland-- are presented and trends and variation are examined. Explanation for yield changes over time are given and implications are discussed.
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    Cost Trade-Offs of Stripper-Mounted Bur Extractors from the Producers' Perspective
    (National Cotton Council of America, 1997) Brashears, Alan; McPeek, Brent D.; Bennett, Blake K.; Misra, Sukant K.
    The objective of this study was to evaluate the cost-effectiveness of using a bur extractor in cotton stripping. Results indicate that the bur extractor has statistically significant effect on bur percent, stick percent, seed cotton percent, and lint turnout. Results also suggest that investment in bur extractors is profitable for bot irrigated and dryland cotton producers, depending on their individualized production scenarios.
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    Comparison of Cotton Production Costs in the U.S. with Costs in Competing Countries
    (National Cotton Council of America, 1988) Andrew, Priscilla; Ethridge, Don
    The long-run competitiveness of the U.S cotton industry in the world market is probably affected by the industry's production costs relative to other countries costs more than any other factor. Estimated costs of production cotton in the U.S and nine competing cotton exporting countries over the period 1970-1985 are presented. Production costs in the major exporting countries are adjusted for differences in input subsidies between and for fluctuations in exchange rates. Implications for the U.S. competitive position in the world cotton market are examined.
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    Performance of the Daily Spot Cotton Quotations for Producer Price Discovery in the Southwest Region
    (National Cotton Council of America, 1994) Anderson, Carl; Brown, Jeff; Ethridge, Don; Hudson, Darren
    Three years of price information from the Daily Spot Cotton Quotations (DSCQ) and the econometric Daily Price Estimation System were used to compare the DSCQ estimated prices with the actual producer market. The findings indicated that for grade alone, the DSCQ estimated price was higher than what the producer market revealed. When all qualities are allowed to vary, the average price reported by the DSCQ was higher than what the market reveled. However, the consistency of the relationship is not reliable. From a perspective, the DSCQ was found to underestimate premiums and overestimate discounts for all qualities considered.
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    Optimal Levels of Irrigation Water and Nitrogen Use in Cotton Production
    (National Cotton Council of America, 1993) Segarra, Eduardo
    A dynamic optimization model which introduces an intertemporal nitrate-nitrogen fertilizer and irrigation water optimal decision rules for cotton production in the South High Plains of Texas. The results indicate that optimal nitrogen applications critically depend on initial nitrate-nitrogen levels and nitrogen prices. Also, the results indicate that the optimal levels of irrigations water is used to derive irrigation water ans nitrogen demand functions and a cotton supply function.
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    On the Economics of Cotton Conservation Tillage with Low Energy Precision Application Irrigation
    (National Cotton Council of America, 1992) Lyle, William M.; Segarra, Eduardo; Triplett, Charley M.
    This study determines whether a conservation tillage system with low energy precision application (LEPA) irrigation is a viable economic alternative for cotton producers on the Texas Southern High Plains. It was found that the conservation tillage system shows increases in both cotton lint yield and profile soil moisture. The high production costs of the conservation tillage system are offset by higher yields. The conservation tillage system provides greater returns over total production costs, thus making the conservation tillage LEPA system more profitable.
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    Impact of Post-CRP Alternatives on Cotton Production in the Texas High Plains
    (National Cotton Council of America, 1994) Ervin, R.T.; Segarra, E.; Johnson, P.
    Post-CRP policy will impact crop production, the level of soil erosion, and the level of governmental expenditures for agricultural programs in the Texas High Plains Region. Mathematical programming methods were used to analyze the response of CRP contract holders in Hale County, Texas to alternative post-CRP policies given as objective of profit maximization. Cotton production was estimated to increase for all specified policies, with the greatest increase occurring with the policy of no extension of the CRP. The marginal value of deficiency payments within the commodity price support programs was indicated to be greater than the marginal value of CRP payments given constrained governmental expenditures.
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    Effects of Cotton Lint Cleaning and Harvester Modification Technology on Net Return to Producers
    (National Cotton Council of America, 1991) Ethridge, Don; Guardiola, Danya L.
    The presence of foreign matter in cotton lint reduces the market value of cotton and is costly to remove. The problem is prevalent in the West Texas region with the use of stripper harvesters. Recent experimentation indicates that modification of the paddle width on the stripper harvester potentially reduces the amount of foreign matter accumulated during harvest. An optimal number of gin lint cleanings was determined under conditions of lint cleaning with and without the use of the modified harvester for two cotton varieties in the West Texas region. Revenues and costs associated with stages of lint cleaning were estimated and revenues from lint cleaning were then derived from these estimates in order to determine an optimal number of lint cleanings under both harvest conditions. Although the results of the study provide to definitive rule for determining an optimal level of lint cleaning, the results suggest that cotton variety is an important element in improving the efficiency of cotton lint harvester modification resulted in increased new returns to the cotton producer.
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    Discounts for Bark, Color, and Trash in Cotton: Evidence from the Texas-Oklahoma Market
    (National Cotton Council of America, 1993) Shaw, Dale; Engels, Carlos; Brown, Jeff; Ethridge, Don
    The cotton grading system in the U.S. is experiencing major changes in 1993. Several measures of foreign matter are being separated out of the grade code, which will now refer only to color. The Commodity Credit Corporation Loan rates will incorporate these new quality measures, and these must be determined before the 1993 crop reaches market. Statistically derived estimates are presented of what the quality premiums and discounts would have been for recent crops if those crops had been with the new system. These estimates may serve as guidelines for the CCC Loan Rates.
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    Cotton Price Responsivenss to Quality in the U.S.: Textile Mill Prices Paid Vs. Producer Prices
    (National Cotton Council of America, 1993) Chen, Changping; Ethridge, Don E.
    An attribute pricing model was used to examine the impacts of cotton fiber characteristics on cotton prices in the U.S. market. Information on cotton prices and quality attributes from the USDA was used in the pricing analysis. Results revealed that all measured cotton quality attributes had significant impacts on prices paid by the U.S textile industry over the study period (1977-1990). In the formation of textile mill prices, the fiber quality attributes having impacts , in order of importance, were fiber length, whiteness, micronaire, fiber stregth, yellowness, and trash content. However, the fiber attributes of micronaire and length had no significant influence on the prices received by cotton producers. It was not concluded that the cotton market system was not operating efficiently in getting price signals through to cotton growers.
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    An Econometric Approach for Estimating Daily Market Prices
    (National Cotton Council of America, 1992) Brown, Jeff; Engles, Carlos; Ethridge, Don
    Procedures for hedonic model determinations of market prices, premiums, and discounts for cotton fiber attributes have been developed for daily market price reporting. Model results for t~e two Texas-Oklahoma price reporting regions are described and presented and compared to the current Daily spot Cotton Quotations. Evidence to date indicates that both the model and the quotations accurately track market prices in the two markets the model provides a more detailed set of quality premiums and discounts and avoids a systematic bias which occurs in the Quotations. Plans for further research are described.
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    Estimated Losses from Bark in Cotton Lint, Texas High Plains
    (National Cotton Council of America, 1986) Neeper, Jarral; Ethridge, Don
    The occurrence of bark in cotton across the U.S. belt is examined and the problem in the southwest, especially in the Texas High Plains, is documented. As a percentage of U.S. cotton reduced in grade due to bark, the southwest region and high plains area averaged about 76% and 46%, respectively, over the 18-year study period. Results indicate that the average annual losses are not large in relation to the total value of cotton produced; the estimated annual loss averaged about 1%. However, the annual variation is great, with the high annual loss over the time period being more than 3% of the value of the crop.
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    Impact of Macroeconomic Policy on U.S. Cotton Producers
    (National Cotton Council of America, 1986) Babula, R.A.; Hughes, D.W.; Penson, J.B.
    Many Cotton producers, like other farmers, are currently experiencing server financial stress. A contributing factor to deteriorating financial conditions in agriculture is the choice of marcoeconomic policies followed in recent years. This paper illustrates how specific combinations of monetary and fiscal policy affect the financial condition and performance of producers of cotton and other raw food and fiber products. Of the four policy combinations examined, the combination of lower budget deficits and a moderate monetary policy offers the best hope for improving financial conditions of cotton producers.