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As the spring semester comes to a close, I wanted to reach out to our AEDE Alumni with some department news and ways you can connect with virtual campus events.
From a virtual commencement to our upcoming webinar on Sustainability and Ohio Lands, AEDE faculty, staff, students and alumni continue to engage in life-long learning.
We hope to run into you in the future when we are all back together on campus.
Dr. Tim Haab, AEDE Chair, Dean's Chair, Leader of the CFAES Knowledge Exchange (KX)
Thousands of graduates were honored on Sunday, May 3 2020 during a virtual commencement ceremony where Apple CEO Tim Cook delivered a commencement address. View via the post-event video link.
AEDE created this Congratulations Video to celebrate our extraordinary graduating seniors.
Knowledge Exchange CO-VID 19 Hub and Discussion Forum
- An online discussion forum for CFAES/OSU Extension faculty and educators to ask questions of their CFAES colleagues, share resources and programming approaches, and offer coping mechanisms for dealing with uncertainty.
- A support resource to help identify reliable, science-backed, and defensible sources for COVID-19-related information. Note: The Hub is not intended to be a public site but is designed to facilitate internal discussions between researcher and educators, generate new ideas and solutions and expedite the translation of information.
Sustainability and Ohio Lands: Creating Value for People and the Environment Webinar
On Tuesday, May 12, 2020 from 10:00 a.m. to 4:00 p.m., speakers and panelists will present Sustainability and Ohio Lands: Creating Value for People and the Environment Webinar through keynotes and panel discussions to help us better understand the concept of sustainability in Ohio and how it applies to the management of our landscape from a broad set of perspectives. Sustainability issues in urban, forest, and agricultural spaces will be covered and panels will focus on interactive discussion, including discussion of questions submitted by guests. REGISTRATION is required.
Two-Semester Master of Applied Economics (MAE)
There is still time to apply for our Two- Semester Master of Applied Economics (MAE) Program that teaches critical economics thinking, analytical and quantitative skills, and the ability to analyze data.
Students receive cutting-edge training in econometric techniques and cost benefit analysis, engage in a project with a corporate partner, and learn about leading data analytics software and statistical programming languages. Final applications are due June 10, 2020 and the GRE requirement is being waived for this application cycle. Attend an upcoming online Information Sessions and visit the MAE webpage to learn more.
Welcome to AEDE’s inaugural quarterly alumni newsletter. This communication is not just another email to clog your inbox, but one to keep you up to date on the department and the great things your fellow alums are doing. We also want to celebrate you! If you've recently received a promotion, recognition, or award, our faculty and staff would love to hear about your recent successes. Feel free to share at go.osu.edu/AEDESuccess.
AEDE Alum Awarded CFAES Distinguished Alumni Award
Agribusiness & Applied Economics alum, Dr. Kristi Scott, is a recipient of the CFAES Distinguished Alumni Award for 2019. We would like to extend our congratulations on all of her accomplishments. Read Dr. Scott's Alumni Spotlight.
Spotlight: Andrea Kackley
Professor Ian Sheldon Named AAEA Fellow
Dr. Ian Sheldon has been named an Agricultural & Applied Economics Association Fellow for 2019. He will be recognized at the AAEA meeting this summer.
AEDE Scholarship Day
Welcome to the newsletter for Ohio State's Department of Agricultural, Environmental, and Development Economics (AEDE)! Your story submissions are welcome for future editions of our newsletter. Please email them to Nicole Pierron Rasul at firstname.lastname@example.org.
The August edition of our newsletter profiles several of the new faces at AEDE for the 2016-2017 academic year, including our four new outstanding faculty hires, instructional faculty and staff. We hope you enjoy reading these profiles.
Welcome to the newsletter for Ohio State's Department of Agricultural, Environmental, and Development Economics (AEDE)! Your story submissions are welcome. Please email them to Nicole Pierron Rasul at email@example.com.
Welcome to the newsletter for Ohio State's Department of Agricultural, Environmental, and Development Economics (AEDE)! Your story submissions are welcome. Please email them to Nicole Pierron Rasul at firstname.lastname@example.org.
Welcome to the newsletter for Ohio State's Department of Agricultural, Environmental, and Development Economics (AEDE)! Your story submissions are welcome. Please email them to Nicole Pierron Rasul at email@example.com.
2018 Agricultural Policy and Outlook Conference
November 2, 2018 8:30am-2:30pm
Nationwide 4H Center
Ben Brown, Program Manager, Farm Management Program – “Ohio Commodity Outlook”
Chris Hurt, Professor, Agricultural Economics, Purdue University – “US Livestock Outlook”
Ani Katchova, Chair, Farm Income Enhancement Program – “Ohio Farm Financial Conditions and Outlook”
Ian Sheldon, Professor and Andersons Chair of Agricultural Marketing, Trade and Policy – “Trade and Policy”
Barry Ward, Director, OSU Extension Income Tax School Program – “Farm Management Update”
Carl Zulauf- Professor Emeritus, The Ohio State University- “Agriculture Policy”
Register at go.osu.edu/2018AGOutlook
Land Value and Cash Rents
Over 80% of farm assets pertains to land, an agricultural input, an investment and even a collateral in loans. The Federal Reserve Bank of Chicago reports that agricultural land values for the Seventh Federal Reserve District (including Illinois, Indiana, Michigan, Wisconsin, and Iowa) showed signs of stabilizing in the first quarter of 2018, as farmland values were unchanged from a year ago. High quality farmland increased 1% in the first quarter of 2018 from the previous quarter in the District. Going forward into 2018, land values in Ohio are expected to continue to decline or remain stable. A major factor contributing to stagnant land values is lower farm incomes and grain prices, lower demand to purchase land, and tightened credit conditions. In turn, interest rates, although rising, remain low helping to boost land values.
Although cash rents in Ohio increased 1.3% from 2016 to 2017, declining farm incomes in Ohio may put downward pressure on cash rents. In 2018, reports from the Chicago Fed, show a decrease in cash rental rates for farmland in the District, though smaller than the 5% annual decrease in 2017. With farmers willing to bid up cash rents but with declining farm incomes, the expectation for Ohio is that cash rents will remain stable in 2018.
Interest rates in 2017 were the lowest since the 1960s. Lower interest rates imply lower opportunity costs, making investors willing to pay a higher amount for land for each dollar in current earnings from the land (Johnson 2016). An analysis of the land values to cash rent ratios (LV/CR), or that of land price relative to its earnings (Cai, Cosgrove and Paul 2018), show an average of 20 from 1960s to 1990s, increasing to the range of 35 to 40 from 2005 onwards (Figure 1).
Sources: Land values are from the USDA National Agricultural Statistics Service and the 10-year constant-maturity treasury yields are from the Federal Reserve Bank of St. Louis.
An increase in interest rates as planned by the Federal Reserve’s Federal Open Market Committee (FOMC) could mean downward pressure on farmland values (Sherrick 2018).
Land value volatility, a measurement of periodic standard deviations of changes in prices, provides information on land values movements. Figure 2 shows the conditional and unconditional land value volatility for Ohio. Conditional volatility takes into account past events while unconditional volatility is an average of past variance. Ohio land value volatility exhibits clustering over time. High land value volatility is followed by high land value volatility (1974-1980). Low land value volatility is followed by low land value volatility (1997-2000). For the next years Ohio land value volatility is estimated to be in the range of 5% to 7%. Spikes in land value volatility, as those witnessed in the 1980s, are not expected.
Cai, X., A. Cosgrove, and J. Paul. 2018. “Assessing the Investment Prospect of Farmland: Evidence from California.” Journal of the ASFRMA: 210–220.
Johnson, B. 2016. “An Analysis of Historical Illinois Farmland Valuations.” Southern Illinois University Carbondale. Available at: http://opensiuc.lib.siu.edu/cgi/viewcontent.cgi?article=2014&context=gs_rp [Accessed February 14, 2018].
Sherrick, B. 2018. “Understanding Farmland Values in a Changing Interest Rate Environment.” Choices (Quarter 1). Available at: http://www.choicesmagazine.org/choices-magazine/theme-articles/will-risi... [Accessed June 7, 2018].
Oppedahl, D., 2018. “Ag Letter: May 2018”. AgLetter, No. 1980. Federal Reserve Bank of Chicago.
USDA National Agricultural Statistics Service. 2017. “Land values 2017 Summary.” USDA–NASS, Washington, DC.
Ohio CAUV Value Projections for 2018
For landowners in Ohio, their farmland’s property tax is not based on the market value of the land but instead through the Current Agricultural Use Value Program (CAUV). The stated intention of the program is to provide a value of agricultural farmland based on expected value from agricultural use and depends on soil type, yields, prices, non-land costs, and capitalization rate (derived from interest rates on farmland) that is used in place of the market value of land.
Ohio introduced CAUV in the mid-1970s as a way to reduce urbanization pressures on property tax values of farmland. CAUV reduced the property assessment value to 35% of market value in 1985 with a steady decline to below 14% of market value in 2006. However, since 2006 there has been a rapid increase in CAUV values, which has led to CAUV values being at least half of the market value since 2014. This rapid increase in CAUV values prompted lawmakers in Ohio evaluate the formula used in CAUV calculations and propose changes to the formula to reflect more modern appraisal techniques. The new changes, from House Bill 49, were signed into legislation on June 30, 2017 and will be phased-in over the next six tax years starting with 2017. Ohio Department of Taxation has already calculated the CAUV values for 2017 and determined that the average CAUV value was $1,153, which represented a 12% decline in average CAUV from 2016, which averaged $1,310. Here in the Department of Agricultural, Environmental, and Development Economics at Ohio State, we are currently projecting the average CAUV value for 2018 to be $1,023 which will result in an approximately 11% decrease in CAUV values. We anticipate this decline to continue as the phase-in process continues through the 2022 tax year.
CAUV values are assigned to each of the over 3,500 soil types in Ohio and based partly on the potential revenues from corn, soybeans, and wheat. Prior to 2006, the yields of corn, soybeans, and wheat for each soil type was based on its yields in 1984. This format did not account for any yield trends for the crops, which artificially reduced the expected revenues for soils in CAUV calculation. Beginning with 2007, yields have been adjusted by statewide trends for each crop, which partially explains the rise in CAUV values over time (seen in Figure 1). Even though the average CAUV value is expected to decline in 2018 by 11%, not all soil types will decline by 11% as some will see larger decreases and others smaller based on each soil types’ expected yields.
Figure 1: 2018 Projection for CAUV Values of Cropland
Other factors, which led to the increase in CAUV values since 2007, have been high prices for crops and falling interest rates. For CAUV calculations, most components in the calculation are based off of a seven-year Olympic average -- meaning, for example, that the previous seven years of corn prices will remove the highest and lowest values to take the average of the five remaining years. These are backwards looking as well, which means that the 2018 CAUV values will utilize crop prices and interest rates from 2011 to 2017.
The largest adjustment to CAUV calculations in 2017 is the update to how the capitalization rate is determined. The capitalization rate is a mixture of interest rate on a 30-year mortgage on farmland along with the appreciation of the farmland. Previously, the appreciation of farmland was based on the Federal Funds rate but this has been replaced by official values from USDA on the average total rate of return on farm equity. The overall effect is to increase the capitalization rate, which further reduces the CAUV values.
In order to help ease the transition to lower CAUV values, the changes in CAUV values are phased in at half of the difference of the previous year’s CAUV value. For example, if a soil type had a CAUV value of $1,000 in 2016 and would then have a 2017 value at $900 under the new CAUV formula that is a difference of $100. Then for the tax year of 2017, that soil type’s CAUV value would officially be $950 for calculating the tax bill -- a decline of $50. The same process occurs for the 2018 CAUV calculations. If the new calculation of our hypothetical soil type ends up being $850, then the official CAUV value in 2018 for that soil type would be $900 -- a $50 decrease from its official CAUV value in 2017. Figure 2 displays the expected phase-in for the 2018 CAUV values, if the phase-in was not in place then our estimates for the average 2018 CAUV values would be $893 instead of the current $1,023 estimate.
Figure 3: Schedule for Updating CAUV
In addition to the phase-in procedure of the new CAUV calculations, property taxes in Ohio are only adjusted once every three years. While CAUV values update every year, only counties, which are receiving an update to property taxes, will correspondingly see a change in their CAUV values. Changes in property tax calculation depends on what county one lives in with the most counties (41 of 88) receiving updates in 2017. In 2018, there will be 24 counties updating and the remaining 23 counties update in 2019.
Overall, the new 2017 legislation related to CAUV should continue to put downward pressure on CAUV values over the next 5 cycles. Farmers can expect to see the reduction in their property tax bill throughout these years in part to the new CAUV calculations as well as the high commodity prices around 2012 being dropped from the CAUV calculations.
If you’d like to learn more about the changes in the CAUV calculations and/or how CAUV is calculated, please see the more detailed technical report at: https://aede.osu.edu/sites/aede/files/publication_files/2018CAUVProjectionsReport.pdf
Or view the projected CAUV values for each soil type here: https://aede.osu.edu/file/cauvprojections2018xlsx
As Chinese Trade Tensions Build, Do Ohio Producers Need to Worry?
Ben Brown and Ian Sheldon, firstname.lastname@example.org; email@example.com
The likelihood of a full-blown trade war between the U.S. and China has increased substantially in the past few months, with each country either implementing or proposing a range of tariffs against each other’s imports. Tariffs, a protectionist tactic, raise the cost of exports to the importing country and lower the demand of goods from the exporting country as other countries compete for market share. Currently, the tariffs implemented by the U.S. include 25% on international steel and 10% on aluminum and a Chinese tariff of 25% on U.S. pork. However, both countries have a list of proposed tariffs covering a range of products including U.S. soybeans and corn. Such tariffs would result in higher machinery costs, lower corn, soybean and pork prices for U.S. agricultural producers, and a cost of exports to the importing country and lower the demand of goods from the exporting country as other countries compete for market share. Currently, the tariffs implemented by the U.S. include 25% on international steel and 10% on aluminum and a Chinese tariff of 25% on U.S. pork. However, both countries have a list of proposed tariffs covering a range of products including U.S. soybeans and corn. Such tariffs would result in higher machinery costs, lower corn, soybean and pork prices for U.S. agricultural producers, and a decrease in the net income of Ohio farm families.
In 2017, Ohio exported about $50 billion worth of goods, worldwide, making it the 10th largest exporting state at 3.2% of the U.S. total. The leading export from Ohio was industrial machinery at $8.9 billion, with soybeans sixth at $1.8 billion. Total agricultural trade accounted for $3.9 billion in 2017, representing 7.8% of Ohio exports, down slightly from the 2016 percentage of 8.3.
Figure 1: Ohio Agricultural Exports by Destination
Figure 2: Value of Ohio Agricultural Trade to China
Considering only agricultural exports from Ohio, Canada remains the largest importer of goods at $1.47 billion in 2017- see Figure 1. However, since 2010, China has emerged as the second largest buyer of Ohio’s agricultural products, eclipsing Canada in 2014. Canada and Mexico, North America Free Trade Agreement (NAFTA) trading partners, together represent 49% of Ohio’s agricultural trade, emphasizing the importance of NAFTA to Ohio’s agricultural producers.
Ohio producers exported $754 million to China in agricultural products in 2017, down from $1.2 billion in 2016, a result of lower soybean prices. Figure 2 illustrates the value of Ohio agricultural exports to China for corn, pork and soybeans. In 2017, Ohio soybean exports to China totaled $691 million, down from the high of $1.14 billion in 2016. Strong domestic use of corn for feed and ethanol has limited the amount available for exports. In 2017, Ohio produced a soybean crop worth $2.4 billion. At $691 million, exports to China would account for 29% of the value of the Ohio soybean crop, which is slightly less than the national average.
The U.S. is not the only exporter of agricultural products to China. In terms of oilseed products, Brazil and Argentina are major soybean suppliers. In 2017, the U.S. exported 36.8 million metric tons to China representing 30% of total U.S. production. In contrast, Brazil exported 45.3 million metric tons to China, and Argentina exported 7.1 million metric tons, representing 40% and 12% of their production respectively. Since 2012, the U.S. has been the second largest supplier of soybeans to China behind Brazil- Figure 3. The growth in U.S. soybean exports to China has grown 209% over the past decade, but Brazil’s growth has been 567% over the same period. The presence of a 25% tariff on U.S. soybeans will likely strengthen Brazil’s market share of Chinese imports.
Figure 3: Chinese Soybean Imports
The U.S. is a net exporter of total agricultural commodities with exports of $138 billion and imports of $121 billion in calendar year 2017. However, commodities differ in the amount of domestic consumption and trade that make up their markets. The largest international market for raw U.S. corn is Mexico, while China is the largest market for U.S. soybeans. In 2017, the U.S. produced 4.2 billion bushels of soybeans of which 2.2 billion left the country as whole soybeans. China represents about 62% of U.S. soybean exports. Nearly one third of the total U.S. soybean crop leaves for China in the form of whole soybeans. A recent report from Purdue University projects that a 25% tariff could reduce China’s imports of U.S. soybeans on average by 69%. A decrease this dramatic in soybean exports would calculate out to one fifth of the U.S. soybean crop being exported to China instead of one third. For Ohio, this would account for a decrease of roughly $241 million in the value of soybean exports. The reduction in soybean exports would initially depress world prices on average by 4.4% and shift soybean acreage to other commodities, including corn. Corn prices would face downward pressure with higher acreage and production, assuming no change in demand.
Using the price declines published from Purdue University and information compiled from analysis from a fictional representative west central Ohio grain farm, the effects for Ohio corn and soybean producers shed light on what producers can expect from a Chinese tariff on U.S. soybeans, corn and pork in the short term. Due to uncertainty about the extent to which China will substitute between U.S. and Brazilian soybeans in response to a tariff on U.S. soybean imports, the authors of this report ran two scenarios. Details of the representative farm and the price substitution scenarios are included in the full report. The projected price inputs for the representative farm through 2024 are illustrated in Table 1.
Estimated Net Income per Year
Chinese Tariff - Low Elasticity
Chinese Tariff- Average
Chinese Tariff- High elasticity
Table 1: Representative Farm Net Income
As shown in Table 1, the reduction in commodity prices results in lower net income per year through 2024. The average net income under the baseline is $63,577, but falls to $26,107 under the estimates from a 25% Chinese tariff. The drop in net income per year reduces the farm’s projected net worth in 2024 by 6% and increases the debt to asset ratio to 34.7%, up from 32%. The expectation is that lower commodity prices will put downward pressure on land values, further reducing net worth. Under the scenario, the current ratio and debt coverage ratio fall to levels that would generate concern for the financial health of the operation. Farms with different ratios and financial structure will respond to the effects of tariffs differently, with larger impacts for farms with higher debt levels and smaller negative impacts from farms with lower debt levels. These results are based on a crop rotation that remains 50/50 with corn and soybeans. Stronger returns for corn later in the projection period could encourage producers to alter the current crop rotation with either introduction of other crops such as wheat and barley, or a higher percentage of corn planted. The farm also has a low equipment replacement rate. A U.S. tariff on international steel will raise the price of U.S. steel and equipment. The representative farm accounts for capital depreciation and replacement costs based on an estimated lifespan, but the impact to cash flow and net worth is smaller than the impact to farming operations with higher machinery turnover.
These data should not be seen as a concrete prediction, as an analysis of external factors such as weather and shifts in demand could alter the outcomes. The full report with more detail can be downloaded at: https://tinyurl.com/ycdv7jmb
Food and Agricultural Policy Research Institute. March 2018. U.S. Baseline Outlook: Projections for Agricultural and Biofuel Markets, University of Missouri, Columbia.
Taheripour, F., and Wallace, T. April 2018. “Impacts of Possible Chinese Protection of 25% on US Soybeans and Other Agricultural Commodities”, unpublished working paper, Purdue University.
U.S. Census Bureau. US Export and Import Statistic-Foreign Trade.
U.S. Department of Agriculture- National Agricultural Statistic Service. 2018 State Production.
U.S. Department of Agriculture- World Agricultural Outlook Board. April 2018. “World Agricultural Supply and Demand Estimates”, WASDE-576
Agricultural Risk Coverage Payments Expected Lower in 2018
Ben Brown, firstname.lastname@example.org
The Agricultural Adjustment Act of 2014 (more commonly know as the 2014 farm bill) reformed the safety net for U.S. row crop producers. Among several changes, direct decoupled payments were replaced with two countercyclical programs that targeted shallow loses in revenue and price. The Agriculture Risk Coverage program (ARC-CO) uses both a county's current and historical revenue to calculate payments. The Price Loss Coverage Program (PLC) allows the market to fluctuate, but triggers payments when the Marketing YeAverage (MYA) price falls below a fixed reference price set by Congress. The two programs operate differently and are not substitute programs. The ARC- CO program uses a county's average yield to calculate both current and historical revenue allowing the program to account for weather events that negatively impact one county’s yield but not another. Producers were allowed one choice in 2015 between the two programs for the length of the farm bill. Participation rates in Ohio followed the national trend for corn and soybeans with the majority of producers electing ARC-CO.
Nonetheless, there are producers in Ohio that are enrolled in either ARC-CO or PLC for corn, soybeans and wheat. The programs make payments at the end of the marketing year, which for wheat is May 31, and August 31for corn and soybeans. Because the MYA price is one-half of the calculation, payments are made almost a full year after the crop has been harvested. Payments for the 2017 crop will be made in October of 2018. Estimating the size of the payments will be important information for Ohio producers and lenders that wish to plan for their autumn cash flow.
Payments in autumn of 2018, representing the 2017 crop, are expected smaller and less frequent than a year ago for corn and wheat, but triggered in more counties and larger for soybeans. For the 2016 crop, every Ohio county except Ashtabula triggered an ARC-CO corn payment, whereas the 2017 crop is expected to trigger a corn payment in only six counties. Nearly half of the counties are expected to trigger a soybean payment and two thirds are expected to trigger a wheat payment. Total payments made in October 2018 are expected lower in Ohio than a year ago even with the higher soybean payments. Expected net cash farm inflow for the month of October is expected down from the three-year average on price and lower government payments.
These calculations were made based on yields reported by the National Agricultural Statistic Service (NASS) in February of 2018. Actual payments made in October will be calculated using Farm Service Agency Yields. NASS does not provide county yields for all counties, partially due to a low survey response rate. Counties with a NASS yield are included. Price estimates are those published by the World Agricultural Outlook Board in the May World Agricultural Supply and Demand Estimates. Expected MYA prices are corn- $3.40, soybean- $9.35 and wheat- $4.70. It is possible that price estimates could change between now and the end of the marketing year, but because of the position in the marketing year, it is going to take large shifts in the cash market to move the MYA price. Higher prices result in a smaller payment, similarly, a lower price results in a larger payment.
Established in the ARC-CO and PLC formulas is a restriction that payments be made on 85% of base acres. The estimates included have been adjusted to reflect both the 85% restriction and a federal sequestration of 6.8%, outlined in the Budget Control Act of 2011.
Expectations for corn payments made this October are for smaller payments than those distributed in October 2017. A lower historical revenue benchmark and above average yields lowered the probability of corn payments for many of Ohio’s counties. Large quantities of corn base acreage exist across Ohio, and is a leading factor in total commodity payments. Payment variations across counties are a result of the yield component included in the ARC-CO formula. Highland county triggers the largest payment at $24/ base acre with a yield of 167 bushels/acre in 2017 vs a yield of 176 bushels/acre in 2016. The program is designed to smooth the differences in revenue from one year to the next, whereas crop insurance is designed to protect against revenue losses within the same year. The average estimated payment this year is expected to be $8, whereas the 2017 average payment was $57.
Smaller soybean yields across Ohio in 2017 increased the likelihood of ARC-CO payments in several of the state’s 88 counties. While more counties are expected to trigger payments this October than last October, the size of the average payment is only slightly higher. The average soybean payment in 2017 was $18/base acre whereas this year the expectation is for $23/ base acre. Payments are more frequent in the northern part of the state where yields lagged from late planting and large rains.
Fewer base acres of wheat exist in Ohio compared to corn and soybeans, but ARC-CO payments for wheat are expected in two-thirds of Ohio’s counties. The average ARC-CO payment for wheat is expected to be $24/base acre down from $32 last year. Wheat acreage is up in Ohio this year, but because the field is planted to wheat does not mean that there will be a commodity payment. Only if the field contains historical wheat base acreage and enrolled in the wheat ARC-CO program, will the field be eligible.
To use these estimates in cash flow planning, producers will need to know their base acreage and which of the two commodity programs they enrolled under. By multiplying the base acreage value by the county estimates above, producers can calculate their estimated commodity program payment. The federal government limits total payments per person (not entity) to $125,000.
These estimates are based on current forecasts for MYA prices. Final prices and yields will be made by the Farm Service Agency in September, with payments expected in October. Large swings in cash prices could alter these estimates. PLC payments are expected higher for corn and lower for wheat in 2018, but apply to a small percentage of Ohio base acreage. Soybeans prices have to date not fallen below the reference price to distribute a PLC payment and the expectation is zero soybean PLC payments this year.
Access the complete Agricultural Risk Coverage Payments Expected Lower in 2018 article at https://tinyurl.com/y6us5uyf
Commodity Situation and Outlook for Ohio - May, 2018
Ben Brown, email@example.com
Agriculture is an uncertain industry, where the only certainty is a guarantee that there will indeed be uncertainty and risk. Already in 2018, frequent rains have delayed spring planting and increased the risk of disease and pest pressure. International trade disputes have increased the volatility in grain and livestock markets and international oil supply forecasts have led to unexpected increases in farm input costs. While the drivers of risk fall outside the hands of producers, individuals respond, react, and make decisions based on the best information available. This report summarizes several of the commodities important to Ohio producers and provides an outlook of supply and demand given current policies and expectations. Unless otherwise specified, the volatility caused by the renegotiation of the North American Free Trade Agreement (NAFTA) and the trade dispute with China are not considered due to their highly fluid situations at the time this article went to press. Supply and demand estimates for the 2018 Marketing Year (MY 2018) are published by the World Agricultural Outlook Board while Ohio inventory estimates are compiled by the National Agricultural Statistics Service. Understanding the balance sheet for many of Ohio’s commodities is important when making short and long-term decisions affecting farming and ranching operations.
Cattle Expansion Enters Fifth Year
The U.S. cattle herd on January 1, 2018 was larger than the count a year earlier, making 2017 the fifth consecutive year of herd expansion. Expansions in beef typically last four to six years. The U.S. appears poised for the possibility of at least one more expansion year in 2018 that would push beef production increases into the early part of the next decade. With constant demand for beef products, increases in beef production put downward pressure on the price received by producers. A cow that would have brought $2,000 in January 2015 brought about $1,200 in April 2018. As beef becomes cheaper, it starts to compete with other goods like pork for market share.
The inventory for all cattle including calves in the U.S. on January 1, 2018 was at 94.4 million head, up 0.7% from the previous year. Ohio’s inventory sits at 1.2 million head, a 0.8% increase. The average lifespan for a beef cow is 8 to 12 years meaning that 9.4 million replacement heifers are needed to maintain the current herd size. At almost 11 million replacement heifers at the start of the year, it is likely that 2018 will also be an expansion year in the national herd. In Ohio, dairy replacement heifers were up 0.8%, however it is likely that these heifers will leave Ohio for larger operations in Texas and Idaho where costs of production are lower. Cattle on feed decreases in Ohio by 6.7% while the national average increased 7.2%. Lower feed costs in Oklahoma, Kansas and Nebraska pull calves off farms earlier and out of Ohio. The outlook for cattle appears slight bearish as higher expected feed costs and dry weather in the southwest will move cattle into the market early. The number of cows and replacement heifers sold for slaughter will be important in determining if a herd expansion happens again in 2018.
Low to Negative Margins Drive Hog Industry
Rallies in grain markets, especially soybean meal, have increased feed costs for hog producers that did not lock in contracts when prices were low. Higher input costs along with a decline in pork prices erased many of the margins hog producers experienced in the first quarter of 2018, but prices rebounded in May. Large increases in hog production in Missouri, Ohio, Oklahoma, and Nebraska have contributed to the low prices. The national average for fed hog prices was $52.50 in January but fell to $45.30 by April. Prices have rallied in recent weeks, but are still below 2017 levels during this similar period. Prices reached a peak in July of 2017 at $67.30. Markets for the nearby July futures contract signal horizontal movements in price. Current prices would suggest a per head return of $2-$5 as a national average for 2018. With higher feed costs expected in 2019, negative margins could return.
Exports to international markets will be a large factor in the hog outlook. Exports of U.S. pork were lowered 35 million pounds in the May WASDE report on concerns around Chinese demand. With the implementation of a 25% tariff on U.S. pork, exports to China have lagged. Increased exports to emerging markets like South Korea and the Dominican Republic will be important in offsetting decreases to China and increased domestic supply. Exports make up roughly 22% of U.S. pork production with the largest markets being Mexico and Japan. However, U.S. pork exports to Mexico decreased in the first quarter of 2018, substituted by large amounts of turkey imports. The USDA forecasts even higher pork production in 2018. The key question will be levels of domestic and international consumption of pork with competition from potential substitutes like beef and poultry. If China backs away from U.S. pork, negative margins could return as early as next month.
Corn Acreage Continues to Decline
Three supply shocks have increased corn prices and brightened the outlook for corn producers. A drought in South America, reducing both the Argentina and Brazilian corn crop, gave corn prices their first positive outlook. Then in March, U.S. producers indicated that they were going to plant 2 million fewer acres in 2018 than in 2017. Even with the reduction in acres, a trend corn yield would make the 2018 crop the fourth largest crop recorded. Frequent rains throughout the central and eastern regions of the Corn Belt have delayed spring plantings and increased prices. With three supply side adjustment to annual production, the corn market has been bullish with December 2018 futures contracts trading well above $4. Dealing with large supplies will continue to be a focus for grain merchandisers. Total supply in 2018 is expected to be 4% lower in 2018 than 2017.
Demand for corn (represented by the shaded area) continues to be strong. Feed and residual is expected slightly higher throughout the remainder of the year but lower in the next marketing year on the adjustments to the national herd size. If the national herd size continues to grow, this number will also increase. Ethanol continues to show growth and is up 1% from 2017 and up 8% since 2014. Changes in Chinese ethanol policy will drive international ethanol demand in the coming years. China announced in 2017 that it would mandate that all fuel for vehicles contain 10% ethanol. Their policy was three fold in that they wanted to reduce their large supplies of domestic stock, clean up air pollution, and create jobs. Whether China imports more raw corn or ethanol, the shock is expected to increase demand for corn on the world market. Only 2% of corn production is exported to China as raw exports. It is possible that it will take China a few years to increase their imports of U.S. corn. Even with the positive signals for demand for U.S. corn, total use is reduced in 2018 mostly a result of lower exports.
The outlook for corn looks favorable to producers as both supply and demand shocks suggest upward pressure on prices moving forward. Lower ending stocks for U.S. corn will increase the magnitude of price shifts due to weather-related events in the coming months. The stocks to use ratio of 19% is lower than 25% in 2017, but above the five-year average of 16%. The U.S. corn crop is mostly planted, and weather will be the largest variable driving U.S. supply through the summer months. December futures prices are currently above cost of production for most producers and potentially a strong option for those that have on-farm storage.
Soybean Price will rely on Demand
For the last few years, soybeans have provided a per acre return to producers greater than corn. Thus, acreage shifts to soybeans have ensued across the Midwest. The ratio of new crop soybean to corn prices from November 2017 to April 2018 traded at 2.5:1. Historically a ratio of 2.5:1 or greater signaled that acres would continue to move from corn to soybeans and that the expectation was for more soybean acres in 2018. However, in March, producers signaled that they intended to plant 1 million fewer acres than 2017. With a trend yield of 48.5 bushels/acre, the expected soybean crop would be the third largest crop on record behind the record set in 2017 and the third straight year over 4 billion bushels. Weather will be the largest factor over the summer months to the final production value, but expectations are for another large crop. The carry-over from 2017 was also high, creating an expectation that the 2018 supply will be 2.5% higher than a year ago.
Demand for soybeans and soybean products continues to be strong. Increases in livestock numbers, especially pigs, has driven demand for soybean meal. Increases in crude oil prices could encourage use of biodiesel and expand soybean crush further. Chinese per capita income is strengthening and the demand for pork continues to grow internationally. Exports of U.S. soybeans to china have tripled in the last decade, but since 2012, Brazil has been the largest supplier of soybeans to China. Nearly 60% of U.S. soybean exports head to China, and the strength of that market will continue to influence U.S. soybean demand. Exports are projected higher in 2018, but Chinese tariffs would shrink Chinese demand of U.S. soybeans. The drought in South American weakened Chinese leverage over the U.S, as production in South America finished below expectations. Overall, the growth in soybean use appears strong at a 5.5% increase next year, but international trade and weather provide large uncertainties looking forward.
Soybean prices in 2018 are expected to be similar to 2017 with the potential for a rally in late June, which would set up an opportunity for producers to contract grain. Trade uncertainty in the Chinese market could change the outlook for soybean profitability for both old and new crop soybeans. Weekly sales numbers will be an important indicator of the ending U.S. export value. Access the entire report, with information on poultry, eggs and wheat: https://tinyurl.com/yb5nkw3l
Letter from Tim Haab, AEDE Department Chair
As the Greek philosopher Heraclitus is credited for saying, “Change is the only constant in life.” Continuing the theme of changes in AEDE from our past newsletters, I am excited that this month we are focusing our newsletter on the introduction of our new faculty and staff in AEDE.
For those who haven’t been around the department in some time, I think you would be surprised at the number of new faces in the hallways. This month we brought on board four new tenure-track faculty members and a new instructional faculty member — a position that is new for us here at AEDE. Through success in the University’s Discovery Themes initiative, we are now able to say that we are a faculty of 21 outstanding applied economists. The influx of new talent will further solidify our reputation as one of the top departments of applied economics in the world.
In addition, over the past six months we have brought on board five new staff members, and I am now confident in saying that we have the best staff support of any department at the University.
I hope you will take the time to read through the brief biographies of our new faculty and staff in this newsletter, and whenever you are in the building, take a minute to introduce yourself.
Finally, on a more personal note, the start of a new school year has given me added perspective on the challenges that students and parents go through as they adjust to life in college. Over the past few weeks, I moved two of my own kids in to college and I see the excitement, nerves and challenges that the transition from high school to college presents. To help ease my own kids' nerves, I wrote a letter to each of them giving them one last "Dad lecture" before they start the academic year. But this lecture was a little different, it comes from twenty years’ of experience as a college professor. In the letter, I shared three things that I’ve seen lead to student success, and I thought I would share them with you as well.
Here are three things I've seen lead to success for students:
1) Go to class: This might seem obvious, but for some reason students forget. Even if your professors don't take attendance, there is a direct correlation between the number of times you go to class and how well you do in class. Why? Because it is in class where you figure out what the professor wants, how they think and what is needed. I don't play favorites in the classroom, but those who come to class do better (even if they fall asleep). It's that simple. Get your butt out of bed and go to class.
2) I have no idea what you will use any of this for... and neither do you. Just yesterday I was sitting in my office trying to remember how to work with natural logarithms. If you would've asked me my freshman year what I would ever use a natural logarithm for, I would have told you I have no clue. And that's the point. There's not a single professor who can predict what you will be or how you will use anything you learn. And neither can you. Don't dismiss learning just because you don't know what you are going to do with it. Learn a lot. You just might use it someday. And even if you don't use it yourself, you might have to help your kids with their homework someday.
3) Think big: A lot of students show up at college thinking they either already know or need to quickly figure out who they are going to be for the rest of their life. They think they need to narrow themselves down to fit in a little box of a major. Don't think that way. You have the rest of your life to limit yourself. Now is the time to explore, to think different, to express ideas and be proven wrong, to express ideas and prove your professors wrong, to meet new people, to find out who they are, and then to find out who you are. In short, now is a time to learn. So don't limit yourself by what you think others want you to be. Be yourself, once you figure out who that is.
Now, for all you students out there, get your butt out of bed and go to class.
Meet Yongyang Cai, Associate Professor of Global Economic Modeling
Behind the kind smile and playful demeanor resides a powerhouse mathematician.
Yongyang Cai, a computational and environmental economist, who recently joined AEDE as associate professor of global economic modeling, has graduate degrees in financial mathematics and computational and mathematical engineering from Stanford University. He has already made a name for himself as a well-respected researcher through his extensive exploration of computational economics and the dynamic stochastic integration of climate and economics.
In addition to his work in computational economics and climate change, Cai also has broad interests in finance, energy economics, urban economics and resource economics.
While in graduate school, he studied under Kenneth Judd, a senior fellow at Stanford’s Hoover Institution and a world-recognized expert in computational economics. Judd had a great impact on the young scholar, leading Cai to formally focus on the field of computational economics.
Prior to joining Ohio State, Cai was a senior research scientist at the Becker Friedman Institute and the Center for Robust Decision Making on Climate and Energy Policy at the University of Chicago, which led him to the field of climate change economics.
Cai has written or co-written 14 peer-reviewed papers that have been published in leading academic journals, including Nature Climate Change, Proceedings of the National Academy of Sciences, Computers & Operations Research, Journal of the European Economic Association, and Quantitative Economics, among others.
One reason that he was attracted to his new position at Ohio State is the fact that it is partly funded by Ohio State’s Discovery Themes initiative, and in particular, the Sustainable and Resilient Economy program, which focuses on advancing cutting-edge research in sustainability science and solutions that accelerate the global transition to a low-carbon economy.
“My background is very interdisciplinary,” Cai explains. “I formally studied computational and mathematical engineering – even in the name you can see the nature of the interdisciplinary work that I do. And, then you add in my work on economics and climate change, making my program of research truly multi-faceted. The fact that the Discovery Themes focus on interdisciplinary collaboration was very attractive to me.”
Cai is working on developing his teaching curriculum, which will be focused in the department’s graduate program. He hopes to offer a course on computational economic techniques and their application to climate change. He also hopes to bring new ways of solving economic challenges to the AEDE program.
“I would like to introduce students to some of the other tools in the field outside of MATLAB,” he says. “I was trained in GAMS, a high-level modeling system for mathematical programming problems, which I would like to bring to the program as I think it will enhance students’ ability to solve problems. I would also like to introduce supercomputing to students so they will be able to solve huge problems in the future.”
Cai is more than happy to take on his new role at Ohio State. “I feel very, very good about being in this environment. My interaction with my new colleagues and the department’s staff and students has been great,” he says. “I really enjoyed visiting Ohio State when I interviewed – I felt that this was a comfortable place, very encouraging and I really liked the culture here. And, Ohio State is a famous research institution and the department is very well known for its applied economics research, which I’m excited to be affiliated with.”
When he’s not wearing his economist hat, Cai likes to bike and listen to music. In his youth, he was known as a Go aficionado. Go is a strategy board game that originated in ancient China and which is very popular in Asia. “I like to play Go but there are not many places to play in the U.S. so sometimes I play on the internet,” he says.
Meet Leah Bevis, Assistant Professor of Sustainable Food and Farm Policy
Prior to starting her first year of university study at Middlebury College in Vermont, Leah Bevis visited Africa for the first time --- Malawi. She returned to work in Uganda after her first year at Middlebury, then after her second, and so-on.
“By the time I got to my senior year, I realized that I wanted to keep working in Africa, and to work in development,” Bevis says.
After finishing her undergraduate degree in geography she moved to Uganda to work with a public health NGO called Uganda Village Project. However, her time in the international development arena left her with more questions than answers.
“It struck me that, often, development NGOs were running programs because the donors liked them, or because they seemed like the only feasible programs, or because one guy once said that the program was effective… I felt there was a real lack of solid, research-based evidence behind many programs. So I went into economics to ask the deeper questions, in order to inform development policy in sub-Saharan Africa and more broadly,” she says as a now practicing development economist.
Bevis focuses on the linkages between biophysical systems and human systems in her research, most of which has been conducted in Sub-Saharan Africa.
During her graduate work at Cornell, she examined linkages between soil fertility, soil and crop minerals, and human health and welfare. She has looked at soil degradation and farmer choices in Uganda, examining how soil fertility effects plot-level productivity, and also how farmers invest differentially in their soils according to various dimensions of soil fertility. She has also examined the role that soil zinc plays in shaping crop zinc content, and how trade patterns move crop zinc across markets in Uganda, driving eventual consumption of zinc by consumers.
“I study intersections between development, human health and welfare, and biophysical resources. Biophysical resources are a key constraint on human productivity and welfare in most rural, developing countries --- and often, they are also non-tradable. If you have poor soils, you’re likely stuck with them. So what are the implications?” Bevis explains.
While at Cornell, Bevis specialized in development economics, econometrics and food systems.
Bevis was hired under Ohio State’s Discovery Themes initiative, and in particular as a researcher in the Initiative for Food and AgriCultural Transformation (InFACT), which seeks transformational solutions for global food security. She was attracted to Ohio State in part because she felt that the university, through the Discovery Themes Initiative, was excited to support the interdisciplinary nature of her research.
“At Cornell, I worked with soil scientists, nutritionists and crop scientists. A lot of my research interests are broadly interdisciplinary, intersecting with many other academics who also study food systems. I hope and believe that the InFACT program will facilitate collaboration with researchers in other Ohio State departments,” Bevis explains.
“From the very beginning this job was at the top of my list. The department has also been great. AEDE’s collegiality really sold me– I had a good feeling about the people here from the start,” she says.
Bevis is currently working on designing her teaching curriculum, which will include a seven-week module for the department’s PhD program focused on development economics. “I really enjoy teaching,” she says. “Working with students is fun. It’s also challenging. And it makes you look more broadly at things, which is only good for your own research.”
In her PhD module she hopes to create a class that is tool-oriented and fairly heavy in econometrics. She aims to situate the class in development economics literature and rely heavily on development datasets.
Bevis was raised in Hawaii and when she’s not sitting at a computer running regressions, or in the field, she’s often found upside-down doing yoga, acro-yoga or aerials. And, as a food and farm policy specialist, she of course enjoys all things food in her free time, from gardening to cooking to exploring her new city’s farmers markets.
Meet Daniela Miteva, Assistant Professor of Sustainable Development and Economy
Daniela Miteva doesn’t consider herself an environmental economist, a development economist, or a conservation economist. In fact, she considers herself all three.
“I am an economist working at the intersection of conservation and development. I am very interested in ways to improve human welfare – reduce poverty, make people healthier, happier and wealthier – but I’m also concerned with how we can preserve the natural environment while doing this,” she says. “I want to be recognized as an economist but also make sure that an ecologist, for example, finds my work relevant and credible.”
Miteva, a native of Bulgaria, has conducted research in northern Uganda, Indonesia and recently Mexico and Brazil. One unifying factor, she explains, is that these countries have tremendous biodiversity but they also have interesting social problems that have led to the disappearance of natural ecosystems.
In her research, Miteva models human behavior in the form of companies or households to understand why common policies like protected areas or timber certification may or may not work. As Miteva explains, a lot of policies, especially in developing countries, have implications for not only the natural environment but also poverty alleviation.
Recently in Indonesia, every morning she awoke to the sight and smell of fresh plumes of smoke from burning natural forests. Indonesia’s forests are being converted at an alarming rate into palm oil plantations for cash-generating ventures for the local population and international companies. Though she deemed this experience as truly frightening, she explains that it really gets to the heart of her research goals: how can we make the lives of local populations better and enable economic growth without sacrificing the environment?
“This is where a lot of my work on valuation comes in to supplement the empirical models of land use change: valuing the benefits people get from the natural environment and trying to figure out if we are producing socially optimal levels of these services and how to incentivize people to produce more of those,” she explains.
Miteva is bringing this knowledge to the classroom as the instructor of “The Sustainable Economy: Concepts and Methods,” a required course for all undergraduate students studying in Ohio State’s Environment, Economy, Development, and Sustainability (EEDS) curriculum. The class combines economic theory with ecology. As Miteva explains, she is teaching students to apply concepts like efficiency to ecological topics such as ecosystems’ resilience. Like in Miteva’s research, the course takes an in-depth look at what it means for an economy to be sustainable, with the goal of understanding of how policy is applied in real-life scenarios.
A graduate of the doctoral program at Duke University’s Nicholas School of the Environment, Miteva greatly values her experience engaging with a wide range of researchers while in graduate school. She notes that in addition to working with environmental and development economists while at Duke, she shared office and classroom space with those working in the natural sciences, leading to a natural crosspollination of ideas.
“Some of the people I met in the program are my best friends and I bug them all of the time about how to approach a model or concept in the field that they specialize in,” she says. “For example, I am currently working with Duke on an assessment of tenure of different kinds of property rights in Colombia with an ecologist friend who also did his PhD at the Nicholas School. We are trying to figure out the impact of granting property rights to indigenous communities and the trickle-down effect on forest preservation.”
Miteva’s interest in interdisciplinary research is a natural fit for Ohio State’s Discovery Themes, a program, under which she was jointly hired. As a researcher in the theme focused on Sustainable and Resilient Economy, Miteva looks forward to meeting people from across the university and collaborating on groundbreaking research that uses concepts and tools from multiple disciplines to address issues of sustainability globally.
An intrepid traveler, Miteva greatly values her time in the field and considers traveling for both work and pleasure one of her favorite pastimes. When on the road for a conference or field work she always tries to fit in time for sightseeing, often meeting up with friends from around the world. In addition to traveling, Miteva enjoys biking and bird watching in her rare downtime at home.
Meet Zoë Plakias, Assistant Professor of Agribusiness
Hailing from rural western Massachusetts, and having lived in Washington and California, Zoë Plakias is familiar with a number of agricultural regions in the United States. However, with her recent appointment to assistant professor with a focus on agribusiness at the Ohio State University, she now has the opportunity to immerse herself in yet another agricultural powerhouse in our nation’s food system.
“This is a new region for me and that’s exciting in terms of agriculture, as every region has its own character and climate,” she says.
Plakias, who joins Ohio State’s Department of Agricultural, Environmental, and Development Economics as a recent graduate of the Agricultural and Resource Economics doctoral program at the University of California, Davis, studies domestic agricultural economics and agricultural policy. Thus far, her research has focused on agricultural producer organizations, technology adoption, and intellectual property rights in the agricultural arena.
“I am interested in all aspects of our contemporary food system. The diversity of producers and consumers within our food system, especially as we think about crafting policy and programs, is very important to me,” Plakias notes.
During her undergraduate studies, Plakias spent a period of time studying environmental studies and geology. She eventually landed in an economics course and fell in love with the discipline. “I find it valuable that I have studied environmental issues. I think all of these things together make me who I am in terms of a researcher and a person,” she says.
Arriving in California’s Central Valley to pursue her PhD, Plakias did not know that she would end those years having earned the title of agricultural economist. However, landing in the heart of America’s food system, where more than two-thirds of fruit and one-third of the vegetables grown in the U.S are produced, ignited a variety of questions for Plakias. These questions would become the foundation for her graduate program research. She also had the opportunity to work with several prominent agricultural economists at UC Davis who sparked her interest in the field.
With her recent move to the Ohio State University and Columbus, Plakias sees nothing but opportunity. “I am excited to be at Ohio State due to its amazing reputation in terms of research. It’s fabulous to be here with thousands of other scholars – that’s just such a cool opportunity – I want to pursue all of these connections and interact with so many people. I am really excited about the diversity in the city and at the university – diversity of ideas, economic diversity, racial and ethnic diversity, and religious diversity.”
Plakias also looks forward to interacting with students in the Agribusiness and Applied Economics program as she begins to take on teaching responsibilities. In addition to her research experience, she hopes to bring her previous experience as a board and committee member of several consumer-owned retail food cooperatives to the classroom.
Of note, she also has the interesting distinction of (most likely) being the only person in the department’s history of having listed “deckhand” on their CV, a talking point brought up in her interview by the department’s inquisitive faculty.
“For several years, I worked as a crew member on tall ships. I’ve sailed along the Atlantic and Pacific coasts and in the Caribbean. On those boats we were doing education programs focused on leadership, marine science and environmental issues. I still love to sail,” she says, while reflecting on her diverse background.
Meet Anna Parkman, Instructional Faculty in Agribusiness and Applied Economics
A multi-tasker by nature, Anna Parkman always likes to dive into two books at once.
“I read a lot. My practice is to always have two books going: one fiction and one contemporary press. Sometimes its business press but right now I’m reading everything I can get my hands on about food and agriculture,” she explains, reflecting on how one of her favorite pastimes has been impacted by her recent appointment as an instructional faculty member in AEDE’s Agribusiness and Applied Economics program.
Parkman will continue to multi-task at AEDE as she teaches numerous core requirements in the department’s Agribusiness and Applied Economics undergraduate program, including “Principles of Agribusiness Management” and “Strategic Management” this fall, while also helping to direct the department’s required internship program. In the spring, she will continue to teach strategy, while also tackling marketing and human resource content, as well as oversee the internship program.
“I bring to the department a lot of experience teaching business courses to individuals who come from a variety of industries. I understand business curriculum applied broadly and I’m excited to bring that perspective to AEDE,” she says.
Parkman received a bachelor’s degree in Psychology and Social Work from Cedar Crest College, an MBA from the University of Charleston, and a PhD in Organization and Management from Capella University.
Most recently, she was an associate professor of Management & Organizational Behavior at Ohio Dominican University in Columbus where she also served as Ohio Dominican’s Director of Graduate Business Programs. Prior to arriving in Columbus, Parkman served as the Cecil I. Walker Chair of the Jones Division of Business at the University of Charleston, in Charleston, West Virginia.
In her “Principles of Agribusiness Management” course she looks forward to teaching students basic management principles and how to apply them to a variety of businesses.
“I love that class because it’s dynamic and students have lots of experiences they can bring to the classroom,” she says. “Most of us have seen business decisions executed well and poorly. It’s really nice to test those decisions in the classroom against standard theories of practice.”
Her strategy course is a capstone, which excites her greatly. “The students come in having experienced the whole curriculum and they now get a chance to apply what they’ve learned to the bigger picture. In this course, they will grapple with questions like, ‘how do you set direction for a company, or move a unit within a company in the right direction? And equally as important, how do you take your own business, your farm or your construction company and move it any one direction over a long period of time?’” Parkman explains.
The strategy course includes a half-semester simulation exercise where students develop a business strategy as a team and then compete against other teams in the course to successfully operate their companies. Together, the teams make decisions related to marketing, finance, production and product development, impacting the success of the fictional companies.
“In our simulation, depending on each decision a team makes, everything changes each round – it’s really dynamic, challenging and fun and it really tests for the ability to understand our program’s content and make decisions in how the content is applied to real-life scenarios,” Parkman explains.
Regarding advice that Parkman would give to students enrolled in AEDE’s undergraduate programs, she says there are three things that are critical to her: communication, preparedness and attendance.
“I am a big believer in communication, including being aware of what’s going on and if you don’t understand, communicating that. If you think you’ve got it, show me; if you have special needs, let me know. Communication is key,” she says. “Assume that I want to hear from you.”
She also hopes that all students will understand the importance of attending class and not only just showing up, but arriving prepared and ready to engage. “I know students have probably heard this over and over, but attendance is a critical factor in being successful. Be prepared with regard to not only content but also what you want to do with that content. Some of our classes are going to have students from a variety of interests. We can engage in a conversation a lot better if you are intentional about how the content might apply to your interests,” Parkman explains.
Meet Our New Staff Members
With the start of the 2016-2017 academic year, the department welcomes several new staff members and a restructured model of administration for servicing the needs of the faculty and students in the department's academic programs.
As our Chair, Tim Haab, has noted in previous newsletters, the department's staff are the engine that keeps AEDE running. As any of our faculty will attest, without our outstanding staff, the faculty would not be able to do what they do so effectively, nor would we have gained such an outstanding reputation for service to students.
Below, see a Q & A with each of the recent additions to our team. We look forward to a wonderful academic year with our full administrative and academic staff teams in place.
What are your duties at AEDE?
I serve as the HR Generalist for the department. I oversee recruitment, employee relations, performance management and compensation.
What are you looking forward to the most about working with the faculty, staff and students in the department?
AEDE is my first academic unit since joining the College in 2015. I’m excited to jump back in to the academic side of OSU and learn about the programs that AEDE offers.
What do you like to do in your free time?
What’s that? :)
What are your duties at AEDE?
I serve as the Human Resources Associate for the department. I initiate the hiring process and provide guidance on HR related matters.
What are you looking forward to the most about working with the faculty, staff and students in the department?
As a graduate of the College, I am looking forward to returning but as a staff member and continuing to work with the faculty, staff and students of the department.
What do you like to do in your free time?
Spend time with family and friends.
What are your duties at AEDE?
In my role as Fiscal Officer, I provide oversight for department’s financial, procurement, financial analysis and reporting operations. I advise faculty, staff and students on fiscal issues, and I assist the Chair with budgetary matters.
What are you looking forward to the most about working with the faculty, staff and students in the department?
I look forward to learning more about the amazing variety of academic and research activities in which our students and faculty are involved.
What do you like to do in your free time?
Reading, spending time with family and friends, and trying to learn all the lyrics to the Broadway musical Hamilton.
What are your duties at AEDE?
As the Undergraduate Program Coordinator, I will be advising the Agribusiness and Applied Economics and Environment, Economy, Development, and Sustainability (EEDS) majors. I will also be meeting with prospective students and their families and representing the department at recruitment events.
I’m looking forward to getting to know everyone and figuring out how I can best make connections among people and resources.
What do you like to do in your free time?
Running, trying new restaurants, spending time with friends and family, and exploring with my dog.
What are your duties at AEDE?
I serve as Administrative Office Manager. I manage the daily processes of AEDE’s Business Office, support the Chair and department committees, initiate/manage promotion and tenure processes, facilitate faculty and staff onboarding, and provide customer service to faculty, staff, and students within the department and college.
I have always had a vested interest in agriculture and the environment. I look forward to seeing OSU’s innovation at work and continuing to learn from those around me.
What do you like to do in your free time?
Organic gardening, baking for others, fly fishing for trout, horseback riding, and (more recently) golf.
Letter from Tim Haab, AEDE Department Chair
This continues to be an exciting time for AEDE. The past few newsletters I have focused on the changing faces of AEDE around the Agricultural Administration building. New students, new faculty, new staff. This month I want to focus on the changing face of the Agricultural Administration building itself.
Just this week, construction started on a major renovation to the second floor of our building. Over the coming months, a new administrative office suite will be constructed to house all of AEDE’s administrative offices and staff. These changes are being driven by the College’s desire to consolidate their administrative offices on the first floor. When construction is completed in October, we will have a brand new office suite including offices for all staff members, a new conference room, a new reception area and even a kitchenette. We will also have two modern classrooms equipped with all the bells and whistles that are necessary for teaching in the 21st century.
While we will be moving out of the offices that everyone has come to know as the face of AEDE on the first floor, we are excited to have a new space for AEDE to call home. We look forward to being able to invite everyone to explore the new space in the fall. Until then, I hope everyone has a great summer and is able to find some time to get away from the daily grind and relax.
Eugene Jones Retires After 32 Years of Service
With the completion of the 2015-2016 academic year, AEDE faculty member Eugene Jones retired from Ohio State. Jones had been a faculty member in the department since 1984.
In his work at Ohio State, he focused on marketing and price analysis, as well as consumer demand for food and beverages. His research looked at supermarket scanner data to examine the differences in purchasing behavior between lower and higher income consumers. Additionally, his research examined game-theoretic frameworks to explore pricing competition among supermarket chains. He also studied the US frozen potato market and the export market for bananas.
Jones taught a number of classes while at AEDE including undergraduate courses in data analysis, the principles of food and resource economics, and an internship in agribusiness program, among others. At the graduate level he taught a course on marketing economics in agriculture.
During his academic career Jones was a member of the Agricultural & Applied Economics Association, the Food Distribution Research Society, and the Southern Agricultural Economics Association.
Jones earned his bachelors degree in economics from Tuskegee University, his masters in economics from American University, and his PhD in food and resource economics from the University of Florida. Prior to joining Ohio State he worked as an agricultural economist for the US Department of Agriculture, as an economic development supervisor in St. Louis, Missouri, as an economic development specialist in Illinois, and as an economist and financial analyst for the US Agency for International Development.
He will be greatly missed by all of AEDE, especially the undergraduate student body, who recently awarded him with the 2015-2016 Outstanding Faculty Member award for his commitment to teaching excellence. A reception will be held in autumn 2016 to honor Jones.
Thank you, Dr. Jones, for your service to AEDE!
Faggian and Dotzel Secure Funding for New Research on Knowledge Management and Rural Firms
AEDE’s Professor Alessandra Faggian has been chosen to receive a grant from the Northeast Regional Center for Rural Development (NERCRD) based on a proposal she developed with advisee Kathryn Dotzel to study knowledge management strategies of rural firms working in the U.S. and to examine how these strategies impact the performance of these firms.
NERCRD is a research center at Penn State University’s College of Agricultural Sciences that partners with more than a dozen land grant academic institutions in the northeastern U.S. on research-based initiatives that create regional prosperity through entrepreneurial and cluster-based innovation while assuring the balanced uses of natural resources in livable communities.
Three proposals, including the one from Faggian and Dotzel, were chosen to be funded for the 2016-2017 academic year. Through this funding, NERCRD aims to support data access and research in rural business innovation and economic development.
The secured funding will be used to support Dotzel as a research assistant on the project as well as access to the USDA's Rural Establishment Innovation Survey (REIS), which the researchers will draw data from for the project. Released for the first time in 2015, REIS is a comprehensive and nationally representative survey on innovative technologies and practices, demand and use of finance, human resource practices and other relevant establishment data.
“The purpose of our research is to explore the relationship between knowledge management, which involves the formation of partnerships that allow firms to acquire and use new knowledge, and firm-level innovation,” Dotzel explains.
Faggian and Dotzel will focus on innovation search strategy, or which sources firms target for information about new opportunities or new ways of doing things, as well as the integration of technologies that facilitate data-driven decision-making and the dissemination of knowledge among employees, suppliers, and customers.
“By considering multiple metrics of innovation and technology use, our analysis will provide valuable insights into the relative importance of knowledge management strategies on the innovative performance of rural firms in the United States,” Dotzel said.
Faggian and Dotzel will present their research at the May 2017 NERCRD conference.
Image (left to right): Alessandra Faggian and Kathryn Dotzel
A Day in the Life: Daniel Crown, PhD Student and ERS Intern
Daniel Crown, an AEDE doctoral student who just finished his second year of the program, is spending the summer as an intern at USDA's Economic Research Service (ERS) in Washington D.C. A native of Gaithersburg, Maryland, Daniel focuses on regional economics in his work at AEDE. He also has an interest in migration and is advised by AEDE's Professor Alessandra Faggian. Daniel completed an undergraduate degree at the University of Maryland, College Park and previously worked as an intern at the US Census Bureau.
Through his own narrative, Daniel gives us an account of what it's like to spend the summer applying the economic concepts that he has learned in the AEDE classroom to a real-world setting as an intern in our nation's capital.
Photos (except where noted) and story by Daniel Crown
Training the Next Generation of Educators: A Look at AEDE’s Participation in the University’s Graduate Teaching Fellows Program
The Ohio State University Graduate Teaching Fellows Program (part of the Ohio State Teaching Enhancement Program, or OSTEP) provides support to senior graduate students from across the university to develop new, discipline-specific teaching support activities for Graduate Teaching Associates (GTAs) in their respective academic units. Each year, an AEDE doctoral student represents the department in the program with the goal of providing training to their peers using OSTEP funding and guidance. The Graduate Teaching Fellows Program is co-sponsored by Ohio State University’s Center for the Advancement of Teaching and Ohio State’s Graduate School.
During the 2015-2016 academic year, LaPorchia Collins served as AEDE’s Graduate Teaching Fellow. As part of the program, Collins administered a needs assessment survey to AEDE doctoral students in autumn 2015.
“The survey provided valuable information regarding students’ perception of teaching support within the department,” Collins explains when talking about some of the initiatives that she undertook as this year's Fellow. “Based on the survey, I designed teaching workshops to provide practical training regarding active learning strategies and classroom management.”
In spring 2016, 14 AEDE doctoral students participated in these training workshops. Of the 34 AEDE doctoral students that completed the needs assessment survey, 82 percent reported that they are considering a career in academia, 68 percent have held a GTA appointment in the department, and, 24 percent have already taught in AEDE classrooms. Though 90 percent of students surveyed noted that the department values excellence in teaching and offers opportunities for teaching experience, only 42 percent of respondents felt that the department offered sufficient training for GTAs.
“Overall, the survey results suggest that graduate students have a positive view of the culture of teaching within the department but there is a need for more professional development opportunities in the area of teaching,” Collins reflected.
In addition to facilitating teaching workshops, Collins started a guest lecturing initiative in which several doctoral students were matched with AEDE faculty to guest lecture in their classrooms. In her role as AEDE’s Graduate Teaching Fellow, Collins offered guidance regarding teaching strategies to students before their guest lecture and she provided substantive feedback afterward regarding their performance.
“My faculty mentor, Professor Brian Roe, helped to identify AEDE faculty members that wanted to participate in the guest lecturing initiative,” said Collins. “The students that participated in the initiative this year had not taught previously, so faculty involvement in the initiative really shows commitment to preparing students for academia.”
“I am elated that AEDE has decided to continue its participation in the Graduate Teaching Fellows Program. Based on the outcomes of my project as this year’s Fellow, I strongly recommend that the department continue to offer teaching workshops and other support,” Collins said.
Graduate Teaching Fellows are offered one-year terms. During the 2016-2017 academic year, doctoral student Isha Rajbhandari will serve as AEDE’s Graduate Teaching Fellow.
Top and bottom image: Doctoral students in the AEDE spring 2016 classroom management workshop facilitated through funding and guidance from Ohio State's Graduate Teaching Fellows Program.
Center image: Isha Rajbhandari (left), who will serve as the 2016-2017 AEDE Graduate Teaching Fellow, with LaPorchia Collins (right), who served as AEDE's Fellow during the 2015-2016 academic year.
Meet the Winners of the 2016 Ohio State Environmental Policy Initiative Grant Competition
Ohio State’s Environmental Policy Initiative (EPI) is pleased to announce the winners of its 2016 summer research grant competition. Each year, EPI summer research grants support Ohio State doctoral students conducting innovative, environmental policy-related dissertation research. Recipients receive an award of $4,500 to aid them in their research during the summer semester.
This year, the award was given to three outstanding Ohio State doctoral students: Debangana Bose from the Department of Geography, Emily Hutchins who is pursuing a degree in environmental social science in the School of Environment and Natural Resources, and Jonathan Ogland-Hand who is in the Environmental Science Graduate Program.
Bose is advised by Nancy Ettlinger and focuses on the effects of urban restructuring through resettlement and its impact on the environment in her studies at Ohio State. She will use the funding for travel to Delhi, India in 2016 to investigate how resettlement in Delhi’s peri-urban areas have impacted the region’s environmental ecosystems. Her research will also critically evaluate the “Sustainable and Smart Cities” program and “Clean India Mission,” which are policies initiated by the government of India to protect and conserve urban and peri-urban ecosystems.
Hutchins, who is advised by Eric Toman, focuses on climate adaptation policy in her work at Ohio State. She earned a B.S. in environmental science from the University of Maryland where she studied wildlife management and soil science. Before pursuing a graduate degree she worked for the U.S. Department of Interior’s Bureau of Land Management in Lewistown, Montana where she gained an appreciation for the work of resource managers and the impact of policy on environmental conservation efforts.
Ogland-Hand is advised by Jeffrey Bielicki who oversees Ohio State’s Energy Sustainability Research Group, which Ogland-Hand is affiliated with. The group focuses on the interaction of energy, the environment and policy. In his studies at Ohio State, Ogland-Hand focuses on quantifying the impact that CO2-Geothermal Bulk Energy Storage (CO2-BES) can have on CO2 emissions from regional electricity systems. This summer Ogland-Hand will apply the EPI grant to research on the impact that CO2-BES could have on regional water stress. Before coming to Ohio State Ogland-Hand earned a B.S. in mechanical engineering from Valparaiso University.
EPI, which is housed in Ohio State's Department of Agricultural, Environment, and Development Economics (AEDE), aims to stimulate and focus systematic collaboration in environmental policy through research, graduate and undergraduate education, communication with the policy community, and interaction with the national and international community of scholars in environmental policy. The program is overseen by AEDE’s Professor Brent Sohngen.
Image (left to right): Debangana Bose, Emily Hutchins and Jonathan Ogland-Hand
AEDE Seeks Participants for Study on Consumer Eating Habits, Free Lunch Included
This article was originally published by Ohio State's College of Food, Agricultural, and Environmental Sciences.
COLUMBUS, Ohio — With today’s varied food and beverage marketplace, recent research shows that Americans are altering their diets at increasing rates, causing food and beverage companies to try to keep pace.
“While we all know the saying, ‘We are what we eat,’ it is also important to link our own eating and food handling decisions with issues being faced by society today,” said Brian Roe, a professor of agricultural economics in the College of Food, Agricultural, and Environmental Sciences at The Ohio State University.
Roe and his colleagues are seeking participants to travel to Ohio State’s Columbus campus to engage in a 15-minute study on consumer eating habits and food handling behavior.
Participants, who must be at least 18 years old, will be asked to read an information card on food handling behavior, to answer a few questions about the card and to complete an anonymous survey.
All participants will earn a free onsite lunch consisting of a sandwich, chips, fruit and a soft drink as compensation for their time. Participants also will be reimbursed for any parking fees or COTA bus tickets needed to get to the campus.
Research sessions are being scheduled for midday from now through the end of July. They will be held in Ohio State’s Agricultural Administration Building, 2120 Fyffe Road.
To participate in the study, email firstname.lastname@example.org to state your interest, and a member of the research team will reply with available dates and times.
The research is being funded by the Ohio Agricultural Research and Development Center’s (OARDC) SEEDS program, a competitive grants initiative for Ohio State faculty and graduate students. OARDC is the college’s research arm.
Roe is a member of the college’s Department of Agricultural, Environmental, and Development Economics.
Image: There's such a thing as a free lunch for people who help with a study in Columbus. It takes only 15 minutes. (Photo: CareyHope, iStock.)
In Memoriam: Elmer Baumer, AEDE Professor Emeritus
Elmer Baumer, a former professor in the department, passed away on May 25, 2016 in Columbus, Ohio.
Baumer earned his undergraduate and graduate degrees in agricultural economics from The Ohio State University. After completing his masters degree, he was employed by a marketing cooperative in Cleveland for two and a half years. Baumer then returned to Ohio State to complete his PhD, which he earned in 1954. At this time, he was offered a position as an assistant professor in the agricultural economics department.
Baumer remained with Ohio State for the duration of his career, serving as associate professor and then professor in the department. He was a very active advisor and served on numerous faculty committees in the department, college and university. Baumer eventually moved into university administration where he served as the associate dean of Ohio State’s Graduate School and then associate provost of the university. He retired from Ohio State in 1987.
Baumer was married for 70 years to his wife Virginia, who is survived by him along with his five children and numerous grandchildren and great-grandchildren. He and Virginia raised their family in Upper Arlington, Ohio where they were devoted community members.
To read his full obituary, including a nice story about his determination as a student, please click here.
Image: Elmer Baumer (www.schoedinger.com)
Letter from Tim Haab, AEDE Department Chair
Over the past few newsletters I have updated you on the state of the department, some of the successes of our students, and the changing faces of our faculty. This month I want to take the time recognize the engine that keeps AEDE running: our staff. As any of our faculty will attest, without our outstanding staff, the faculty would not be able to do what they do so effectively, nor would we have gained such an outstanding reputation for service to students.
In the past month our student services staff members have been recognized for their outstanding contributions to students. On April 7, Gina Hnytka, our Program Manager for the EEDS major and AEDE’s undergraduate and graduate programs, received the College of Food, Agricultural, and Environmental Sciences Outstanding Service to Students Award for her leadership in founding and leading the SUSTAINS Learning Community (SUSTAINS stands for Students Understanding Sustainability and Taking Action to Improve Nature and Society). On April 27, Holly Hall, our Undergraduate Program Coordinator, was recognized by the Academic Advising Association of The Ohio State University as a nominee for the OSU Outstanding Advisor Award. Holly joined AEDE in 2014 and quickly established herself as one of the premier undergraduate advisors at Ohio State. Holly was even brave enough this year to serve as the staff advisor for the Agribusiness Club on their annual club trip to Texas.
In addition to our outstanding student services staff, we are lucky enough to have dedicated staff members pushing AEDE forward in our communications and outreach efforts (Nicole Pierron Rasul) and IT (Joel Yoder). Our business office has continued to run smoothly, and set an example for other units under the leadership of Joan Weber and the support of Janice DiCarolis, Ana Crespo and Mary Roberts.
As has been a theme over the past few newsletters, change will be the operative word for AEDE’s staff moving forward. In February, Joan Weber announced her retirement, effective May 1, 2016. Joan has been a dedicated OSU employee since 1987 and has been with AEDE for over 20 of those years. I can personally attest, based on six years working closely with Joan, that Joan has been the key to AEDE’s success over the past 20 years. Joan’s professionalism, her attention to detail, her willingness to stand up for AEDE’s faculty, staff and students (some might call that stubbornness, but I call it the key to success), and her impressive body of knowledge and understanding of AEDE and OSU rules, regulations and procedures have made AEDE a model department for business operations for other units in the College and across the University. I want to personally thank Joan for her service to the University and more importantly for helping to keep my head above water for the past six years. Joan will be missed in the office but her dedication over these past six years has established a business operation that we are confident will continue to operate smoothly as Joan enjoys her time on the golf course.
With Joan’s retirement and recent changes to CFAES human resources and fiscal operations, we are pleased to welcome three new staff members to AEDE.
Cheryl Lyman is joining AEDE in the role of Fiscal Officer. Cheryl’s primary role will be oversight of AEDE’s fiscal operations and serving as final approver for AEDE’s fiscal transactions. Cheryl joins us having served previously in fiscal and budget positions with the city of Columbus and Otterbein University (among others).
Brandi Gilbert-Hammett is joining AEDE in the role of Human Resources Generalist. Brandi currently serves multiple units in CFAES and will have primary responsibilities for AEDE human resource related activities.
Marlene Poches joined AEDE on April 25 in the role of Administrative Office Manager. Marlene is joining us after most recently serving as the Executive Assistant to the Dean of the College of Engineering at the University of Washington in Seattle. Fortunately for us, Marlene got tired of the Seattle lifestyle and landscape and instead decided to take advantage of the natural beauty of central Ohio. Marlene will be managing AEDE business and administrative operations.
Despite many changes, I am confident that we have in place an outstanding staff that is dedicated to providing the support to which our students and faculty have become accustomed. I am grateful to have the opportunity to work with such dedicated people and I hope you will all join me in thanking our staff for their continued dedication to ensuring AEDE is the model department at OSU.
Next time you see one of our staff members in the hallway or out and about make sure you give them a high-five or a fist bump and a simple, "Thanks for all that you do."
Thank You, Joan Weber, for 30 Years of Service
This week AEDE will lose one of its longest-serving staff members, Joan Weber, who will retire at the end of April. Joan has spent 30 years as an employee of The Ohio State University. She joined AEDE in 1996 as the administrative manager for the department’s Rural Finance program. In 2000, she moved to her current role as the Business and Administrative Manager for AEDE.
In her position, not only has Joan managed AEDE’s human resource and fiscal functions with the utmost professionalism, but she has unofficially served as a department historian, OSU policy encyclopedia, gatekeeper, and an answerer of all things, all the time.
Many faculty and staff have relied on Joan’s extensive expertise on nearly every administrative function at Ohio State. Often, conversations and meetings end with the phrase, “I’ll just ask Joan….”
Tim Haab, AEDE Chair, recently noted that the hole being created by Joan’s departure is immense and the appreciation the department has for Joan’s professionalism and dedication cannot be overstated. In 2006, Joan was formally honored with the Ohio Chapter Gamma Sigma Delta Service Award of Merit.
Thank you, Joan, for sharing your experience, professionalism and caring character with all of us for all of these years. We were so fortunate to have you on our team. We hope you enjoy the tributes below from several of the colleagues that you have worked with over the years. And most importantly, enjoy the many games of golf and days on sunny beaches that are surely in your future.
Sathya Gopalakrishnan, Assistant Professor
I am extremely thankful to Joan for her immense patience in working with me through the immigration process, among other things. I can’t imagine how I would have navigated the OSU system; she always had answers, or would find the answers, to what I can imagine were annoying questions.
Ian Sheldon, Professor and Andersons Chair in Agricultural Marketing, Trade and Policy
In 34 years as a professor both here in the US and back in the UK, I have never met a staff member so totally professional and dedicated as Joan – it has been an absolute privilege to work with her. Her total knowledge and understanding of the financial, human resource and administrative rules at Ohio State have been a tremendous asset to the department, and I am sure she has prevented us getting into trouble on many occasions. Having interacted with Joan on several faculty searches, as well as other administrative jobs, I can only say that her management skills and attention to detail are truly second-to-none. On a personal level, I have always enjoyed and appreciated Joan’s willingness to listen to me as a faculty member on so many issues – I will really miss that daily interaction. Hopefully, she can enjoy being on the golf course more in her retirement, as well as having time to drink a margarita or two down Mexico way.
Carl Zulauf, Professor Emeritus
Joan is the consummate professional. You need say no more. Joan was incredibly important to the functioning of the department as anyone who has been around and experienced the importance of fiscal and human resource management. Much like many things in life you have to experience the bad to know how good the good is. The department was blessed to have Joan. Joan was interested in you as a person not just as an employee. The department was a better place to inhabit when you were asked a simple question, “How is your day going?” I will miss our conversations about golf. Being a non-player but a huge fan, it was insightful to hear an accomplished player’s take on the game, both now and in the past. Sports provide a window into the world. My window will get somewhat smaller without our conversations. I wish Joan the best in whatever she chooses to do, but I hope she shoots a personal best round of golf as a celebration of retirement and of a professional life that positively impacted others by helping them navigate the systems of Ohio State.
Ana Crespo, Fiscal Records and Office Administrative Associate
Congratulations, Joan on surviving working 30 years at OSU! I appreciate the hard work you put into making sure everything was done correctly. We both know how easily everything can fall apart if attention is not paid to details and work processes. I hope you enjoy your retirement because you have certainly earned it. I am sure the worst part of your retirement will be that you will not see our faces on a daily basis, but we can send you a picture every week or monthly if you like. Have fun golfing and keep in touch.
Gina Hnytka, Program Manager, Environment, Economy, Development, and Sustainability (EEDS) and AEDE Undergraduate and Graduate Programs
Joan is the first AEDE contact I met when I decided to apply for a position with the department. Her professionalism, work ethic, and commitment to success reinforced my decision to join AEDE’s team, without a question. Throughout the time I’ve worked in the department, Joan’s experience, dedication, and guidance has helped to make my own work easier and more successful. Joan will be truly missed. She has been a constant, excellent staff member in the department who simply cannot be replaced.
Barb Lee, Former AEDE Staffer
When I first met Joan over 20 years ago, she was interviewing for my job in International Finance. I was immediately struck by her professionalism, her enthusiasm and her overall caring persona. She would be a perfect fit for this group. Joan quickly learned the fast-paced nature of the rural finance group including faculty, graduate students and constant visitors from the U.S. and abroad. She went on to accept the position she now holds in AEDE. No one could survive in her job without being an intelligent, detailed, and multi-tasking individual. Joan is well respected by her peers and administrators throughout OSU, the State, and internationally. It has been my great pleasure to know Joan as a colleague as well as a good friend. We joke when we meet for a quick lunch at China Dynasty (I don’t think Joan and I have ever eaten anywhere else) that when she retires we can have long lunches and shopping trips together – I look forward to those days. Enjoy your retirement, Joan. You and Larry certainly deserve some time together – golfing, being beach bums, and whatever else your heart desires.
Douglas Southgate, Professor Emeritus
Joan is an unusually capable individual as well as a dedicated professional. The department has benefited enormously from her effective administrative service. And what a pleasure Joan is to be around, always cheerful and encouraging. She will be missed!
Janice DiCarolis, Research and Extension Communications Liaison
Congratulations, Joan! Best wishes for a happy, healthy, long retirement….QUITTER!!! Seriously, it has been such a pleasure working with you. You are the consummate professional. You will be missed, so please keep in touch or come back and visit…but not for two months. Once I retire, we can work on that book!
Department Awards $65,000 in Scholarship Money to 31 AEDE Undergrads for 2016-2017 Academic Year
AEDE held its yearly undergraduate scholarship competition for eligible students enrolled in the department’s Agribusiness and Applied Economics degree program in early April.
As part of the $2.1 million in scholarship funds awarded by the College of Food, Agricultural, and Environmental Sciences to its students each year, this year AEDE offered more than $65,000 in scholarship money to 31 Agribusiness and Applied Economics undergrads for their studies during the 2016-2017 academic year.
AEDE scholarship funding is provided by a wide array of generous organizations and individuals. During the competition AEDE students present their skills and experience to donors and faculty.
Reflecting on both the importance of the funding and the competition experience, Professor Brian Roe, AEDE’s Undergraduate Studies Leader, noted: “The AEDE scholarship day offers a wonderful dual opportunity for students to gain in the short run by acquiring critical funds to pay for college expenses and to gain in the long run by getting to meet scholarship donors and hone critical interview skills.”
More information on funders and winners for the 2016-2017 competition can be found below.
Please note, photos are not available for the following winners: Samantha Boeck who was awarded the Consolidated Grain and Barge Scholarship and Kait Butterfield who was awarded the Archer Daniels Midland and Francis McCormick Scholarships.
AEDE would like to take this opportunity to thank our generous funders who sponsor the department’s undergraduate scholarships. Their generous support has provided financial assistance to AEDE students for nearly 50 years, enabling hundreds of undergrads to study Agribusiness and Applied Economics at Ohio State.
If you or your organization are interested in contributing to the successful legacy of AEDE undergraduate students by sponsoring a department scholarship, please contact us at email@example.com.
Dispatch from the Field: Tony Gallenstein on His Work with the iAGRI Program in Tanzania
Tony Gallenstein, an AEDE doctoral student, is currently in Tanzania serving as a program manager for the Innovative Agricultural Research Initiative (iAGRI), a USAID Feed the Future project. AEDE’s Dave Kraybill serves as the iAGRI project director.
iAGRI is an ambitious five-year program to improve agricultural productivity and food security in Tanzania.
The $24 million project will provide agricultural and nutrition training to 120 Tanzanian graduate students over the project lifespan, including educational exchanges at the program’s six American partner universities: The Ohio State University, Michigan State University, Virginia Tech, Tuskegee University, University of Florida, and Iowa State University. iAGRI also facilitates and funds collaborative research on food security and nutrition between faculty from the project’s consortium universities and Tanzanian researchers.
Author: Tony Gallenstein
The Ohio State University has joined Sokoine University of Agriculture on an iAGRI funded research and capacity-building initiative: Promoting Financial Inclusion and Technical Transformation among Smallholders in Tanzania: A Capacity-Building Exercise.
The project has several objectives:
- Conduct high-quality research on the impact of weather-based index insurance on technology adoption and farmer group sustainability in Tanzania;
- Improve economics research capacity at Sokoine University of Agriculture; and
- Raise awareness of the potential uses of index insurance in the agricultural finance sector in Tanzania.
Through this initiative, it is hoped that food security in Tanzania will be improved due to the ability of the country’s leading agricultural university to conduct high-quality economics research and promote the understanding of index insurance to stakeholders in the country. The project aims to promote opportunities for index insurance to manage the risks faced by smallholder farmers throughout the country.
The research team is composed of two principal investigators from Ohio State: Dr. Mario Miranda and Dr. Abdoul Sam, as well as one principle investigator from Sokoine University: Dr. Flavianus Magayane.
In addition to the principal investigators, the team is composed of two graduate research assistants from Ohio State: myself and John Daugherty, as well as one recent Sokoine University graduate: Erick Temu.
During the first phase of the project implementation, I have assumed the role of iAGRI program manager for the research team. I have been based in Tanzania from February 2016 and will remain here into June.
In my work, I am overseeing a number of project activities, including the implementation of a framed field experiment that is investigating the impact of index insurance on risk-taking in individual and joint liability smallholder agricultural lending.
The experiment is in effect from late March to early May in the drought prone districts of Kongwa, Bahi, and Dodoma Urban in the Dodoma region. During this time, I am located with the experiment team in Dodoma.
The other project activities include a collection of capacity-building exercises, including a research discussion group with four Sokoine University graduate students. The discussion group involves reading academic papers in experimental and development economics and discussing new research ideas and research methodologies. The participants also serve as enumerators for the implementation of the framed field experiment thereby providing them with hands-on experience implementing the methodologies studied in the literature.
Additionally, I am working with Professor Miranda and the iAGRI leadership team to develop a proposal for capacity-building activities for Sokoine University’s School of Agricultural Economics and Agribusiness.
The proposal includes further student mentorship, teaching a seminar on experimental and behavioural economics, an external review of the Agricultural Economics graduate program, training for Sokoine University faculty on teaching doctoral level quantitative research methods, and inclusion in an upcoming index insurance conference.
Gina Hnytka, Outstanding AEDE Undergrads Recognized at Annual CFAES Banquet
Ohio State’s College of Food, Agricultural, and Environmental Sciences held its annual recognition banquet on April 7, 2016 at the Ohio Union on the Ohio State campus. The event was a celebration of the outstanding accomplishments of the college’s students, student groups, faculty, staff and supporters.
We congratulate the following winners from AEDE who were recognized for their achievements at the event, including undergraduate students in the Agribusiness and Applied Economics and Environment, Economy, Development, and Sustainability (EEDS) programs
- Gina Hnytka, Program Manager for the EEDS major and AEDE’s undergraduate and graduate programs, was recognized with the Outstanding Service to Students Award. She was nominated for the award by students in the SUSTAINS (Students Understanding Sustainability and Taking Action to Improve Nature and Society) Learning Community. SUSTAINS targets Ohio State undergraduate students who are interested in the environment. Hnytka is one the founders of the community and currently oversees the group’s programming.
- Miranda Miser, an Agribusiness and Applied Economics and Agricultural Communication student from Cumberland, OH, was awarded the Ray A. Miller Council Scholarship.
- Derek Rieman, an Agribusiness and Applied Economics student from Ottawa, OH, was awarded the CFAES Internship Award.
- John Bolte, from Dublin, OH, and Emily Ratliff, from Greenfield, OH, who are both students in the Agribusiness and Applied Economics program, were recognized as Outstanding Seniors.
- Cheryl Fladung, an EEDS student from Somerset, OH, was recognized as a Year Two Newcomb Scholar.
- Annaliese Koontz, an EEDS student from Cincinnati, OH, and Mara Momenee, an EEDS student from Toledo, OH, were recognized as Year Three Newcomb Scholars.
- Sammie Keitlen, an EEDS student from Evergreen, CO, was recognized as a Year Four Newcomb Scholar.
Congratulations to all of the college's winners, and in particular to AEDE’s staff and student winners. You make us proud for your dedication and commitment to the department, the college and your studies!
Photo: (Left to right) Matthew Griffin (EEDS major and SUSTAINS Learning Community member); Maggie Borders (Environmental Science major and SUSTAINS Learning Community member); Gina Hnytka; and Aaron Moore (Residence Hall Director for SUSTAINS Learning Community) at the April 7th CFAES annual recognition banquet. Hnytka, an AEDE staff member, was awarded the Outstanding Service to Students Award.
Ohio State to Host Workshop for Businesses on Measuring Sustainability
This article was originally published on the website of Ohio State's College of Food, Agricultural, and Environmental Sciences
COLUMBUS, Ohio — How does your business or organization measure and account for sustainability?
Faculty in the College of Food, Agricultural, and Environmental Sciences at The Ohio State University would like to help your organization learn to better implement, measure and evaluate sustainability efforts at a workshop on May 19 at Ohio State’s Nationwide and Ohio Farm Bureau 4-H Center.
“We hope participants will leave the workshop with knowledge of the critical ecosystem services affected by business decisions and supply chain management and have an understanding of emerging tools that businesses can use to analyze their sustainability efforts,” said Brent Sohngen, the lead organizer of the workshop, director of Ohio State’s Environmental Policy Initiative, and a professor in the college’s Department of Agricultural, Environmental, and Development Economics (AEDE).
Building off of the curriculum offered through the college’s sustainability program of study, called Environment, Economy, Development, and Sustainability, faculty from AEDE and from Ohio State’s School of Environment and Natural Resources and engineering programs will present on topics such as valuing ecosystem services and supply chain analysis.
Additionally, representatives from The Nature Conservancy, Greif Inc. and American Electric Power will speak on sustainability initiatives undertaken by their organizations and in their corporate partnerships.
“The anticipated global population growth and related demands will place unprecedented pressure on our natural resources. Now, more than ever, business, governments and academic institutions must collaborate to ensure adequate action is taken to protect Earth’s ecosystem services,” said Scott Griffin, chief sustainability officer and VP of corporate communications at Greif Inc., who will offer the event’s lunchtime keynote address.
“In business we say, ‘What gets measured, gets done.’ This workshop will introduce the frameworks, tools and best practices necessary to align the efforts of all parties and improve the probability of achieving expected results,” Griffin said.
The workshop’s hours are 9 a.m. to 5 p.m. The 4-H Center is at 2201 Fred Taylor Drive in Columbus.
The cost to attend is $40, which includes all workshop materials and lunch.
Registration must be made in advance at go.osu.edu/RegisterMeasuringSustainability.
To learn more about the agenda and speakers, visit go.osu.edu/MeasuringSustainability.
Photo: NicoElNino, iStock
Letter from Tim Haab, AEDE Department Chair
AEDE’s future is bright.
Retirements and faculty vacancies create uncertainty for the future of academic departments, and three retirements of long-time AEDE faculty members over the past year is certainly no exception.
Over the past six months, the AEDE faculty embarked on a search for four new faculty members. In the Fall, four search committees developed position descriptions and advertised for the four positions. In December, the faculty screened over 500 applicants for the four positions. In early January, 11 AEDE faculty members travelled to San Francisco to conduct over 50 short interviews with potential candidates—I can attest that San Francisco is lovely from the Hilton window.
Over the last two weeks of January and first two weeks of February, we brought 12 outstanding candidates to campus for day-long interviews. That’s 12 job seminars, almost 50 business meals, and 12 days’ worth of meetings scheduled with faculty, students, stakeholders and administrators; all within a span of four weeks while our faculty continued to manage teaching, research and outreach responsibilities. It was an impressive accomplishment and took the collective engagement of all of our faculty and staff.
I am nothing short of impressed with how smooth the process ran.
In the end we were able to attract four outstanding new faculty members to AEDE, from some of the best programs in the world and we were able to outcompete some of the top programs in the country for these outstanding new faculty members. In future newsletters we will be introducing our new faculty members in depth, but for now I will simply say it is our pleasure to welcome:
- Daniela Miteva, PhD in Environmental Economics from the Nicholas School of the Environment at Duke University (2013) to the position of Assistant Professor of Sustainable Development and Economy
- Leah Bevis, PhD from the Dyson School of Applied Economics at Cornell University (anticipated 2016) to the position of Assistant Professor of Sustainable Food and Farm Policy
- Zoe Plakias, PhD in Agricultural and Resource Economics from the University of California, Davis (anticipated 2016) to the position of Assistant Professor of Agribusiness
- Yongyang Cai, PhD in Computational and Mathematical Engineering from Stanford University (2009) to the position of Associate Professor of Global Economic Modeling
AEDE is not the same today as it was yesterday, and tomorrow AEDE won’t be the same as today, but as John F. Kennedy once said “Change is the law of life. And those who look only to the past or present are certain to miss the future.”
The past four months have convinced me that I am proud to work with such a dedicated group of colleagues committed to the future of applied economics at Ohio State.
I am excited for the future of AEDE.
Meet Mark Partridge: Professor, Swank Chair, and the “Most Influential Author in Regional Science”
We recently sat down with Mark Partridge, a regional economist, AEDE professor, and Ohio State’s C. William Swank Chair in Rural-Urban Policy to talk about his work, the Swank program and some of his favorite places to visit across the globe. Check out our Q & A with him.
In a recent study you were ranked as the most influential author working in the field of regional science. What trends do you see in the future in this field?
Regional science and regional economics are very germane as tools to help direct future policy issues that will guide society. For example, issues of income inequality and poverty are not just important political issues in the U.S. but they are important global issues that drive long-term economic growth and how political institutions adapt to solve pressing socioeconomic challenges.
Moving forward, society is increasingly interested in issues such as climate change and mass migrations after traumatic shocks such as war, economic volatility, or climatic events. These have long been key issues that have dominated regional science. For instance, issues of how people migrate in response to climatic conditions and environmental conditions have been studied by regional scientists since the 1970s, forming what should be the basis of current research on how climate change will affect mass migration.
Going forward, I think regional science will continue to focus on the major issues that face society. One issue that I think will remain at the forefront is helping local regions create sustainable development that is inclusive for their residents.
How has working at a large research institution like Ohio State helped you further develop your research portfolio?
Being at The Ohio State University has been so rewarding for my research. I have been exposed to so many brilliant scholars across the university, allowing me to learn from many different fields and viewpoints.
Probably the most rewarding aspect are the ideas and enthusiasm that our students possess. I enjoy teaching but it is the most fun when students teach the professor. I have learned so much from their ideas and unique views.
What is the subject matter of your most recent research and what impact do you hope to see from this research?
Much of my research has been on how economic shocks such as the development of new industries or world economic volatility affects local communities and their regions. This is demonstrated with my current work on France, the U.S., or China, as the global economy produces winners and losers.
Another key theme is my current work on income inequality and poverty and how policy can work to reduce their negative effects on the economy, well-being, and on governance.
Another key area of my current research is assessing how the recent shale boom and the "old" carbon economy such as coal have affected local areas that have experienced development of extractive industries.
What has been the greatest accomplishment of the C. William Swank Program in Rural-Urban Policy since you became the program’s Chair?
There are many accomplishments that I am proud of in my work as the Swank Program Chair.
One is the relationships and connections that I have made in my outreach work with key stakeholders such as Ohio Farm Bureau, Ohio County Commissioners, and various education and workforce groups. Closely related to this are the relationships that I have made with my Swank assistants in developing policy briefs and trying to shape better policies for Ohio and its communities.
Another is my outreach work on energy development. While many noted the "boom" aspects of the initial rush for drilling, I have tried to caution communities to look more at the long-term in that energy cycles are highly volatile and to plan for not only the boom but also for the inevitable bust. I believe that Ohio communities have heard many of these arguments and there have been fewer problems as the energy economy cooled off.
Another is my research on how rural and urban areas are economically interdependent and the need to develop regional policies for better economic outcomes. One area that illustrates the impact of this research is the recent push by international development organizations such as the World Bank and OECD to consider focusing development efforts on the smaller and intermediate sized cities.
Finally, I am also proud of the international reputation we have developed for the program. When I came to OSU, I was charged with building an international footprint and I believe that we have succeeded.
What is your favorite country that you have traveled to and why?
I have been fortunate to visit many countries for my work. Yet, I caution people considering international travel that I am not a good person to consult on things to do. A culinary pleasure for me is a burger and fries. While abroad, I spend most of my time thinking about a country's economic development and what can be learned from those patterns.
The country that fascinates me the most is China. In China, you see the hustle and bustle that I suspect characterized the remarkable rise of large American cities in the late 19th and early 20th centuries, but on a much larger scale. Likewise, China is experiencing the same growing pains as the U.S. did, such as dramatic transformation with major winners and losers. One key difference is the U.S. developed with a much more hands-off approach, while China has been heavily guided by the hand of their central government. It will be fascinating to see how each approach fares in the long run.
Ani Katchova Presents on Farm Income on Capitol Hill
Ani Katchova, AEDE Associate Professor and Ohio State’s Farm Income Enhancement Chair, presented at a Capitol Hill briefing on February 11, 2016 focused on “Dynamics of Farm Profitability: Factors Influencing the Decline in Income.”
Jeffrey Hopkins from the USDA’s Economic Research Service (ERS) and Allen Featherstone from Kansas State University presented with Katchova. The briefing was organized by The Council on Food, Agricultural & Resource Economics (C-FARE) and the Agricultural & Applied Economics Association (AAEA).
While in Washington D.C., Katchova also visited with staff for Ohio Senator Sherrod Brown to discuss the agricultural outlook for the state of Ohio. She also met with Senator Pat Roberts, Chairman of the Senate Committee on Agriculture, Nutrition, and Forestry, and with USDA Chief Economist Robert Johansson to discuss U.S. farm income and farmland market trends.
“I felt honored to have the opportunity to share information and present at the Capitol Hill briefing,” Katchova said.
During the briefing, Katchova presented an analysis of data from USDA ERS’ February agricultural forecast. Reflecting on declining farm incomes, Katchova noted:
- In 2016, net cash farm income is anticipated to decline by 2.5 percent
- Net farm income is anticipated to decline by 3 percent between 2015 and 2016.
- Also in 2016, farm assets are expected to decline by 1.6 percent, farm equity by 2.2 percent, and farm debt is anticipated to grow by 2.3 percent
However, despite these tensions in the marketplace, Katchova noted that there is hope. “Even with two years of forecasted decline, the farm sector balance sheet is very strong with solvency ratios for the agricultural sector that are near historic lows,” she said.
Additionally, she reflected on farmland values and rents in her briefing using an analysis of data from USDA’s Land Values Summaries. She noted:
- U.S. cropland values increased by a modest rate of 0.7 percent in 2015
- U.S. cropland cash rents increased by 2.4 percent in 2015.
- Regionally, while Ohio experienced an increase of 3.5 percent in cropland values in 2015 and 3.6 percent increase in cash rents in 2015, several other states in the Corn Belt experienced declines. Regarding this discrepancy, Katchova noted that one explanation is that rental contracts are typically not negotiated every year and farmers may not be willing to lose control of their rented acres.
At the briefing, Katchova also presented her research with Mary Ahearn from USDA ERS on the land needs of beginning and young farmers. They have found that these groups own less farmland than their established counterparts and current low farm income rates may be impacting them greatly.
“Not only do beginning and young farmers need to pay land rents and debt payments on real estate, but they also need to grow as they establish their operations which puts additional pressure on their declining farm income,” she said.
At the briefing Katchova also noted that farm financial ratios, measuring liquidity, profitability, and solvency have all worsened in the last two to three years, but they are still among the highest in the last decade.
“Overall, the ag sector is coming down from historic highs but is currently in a strong position, with only a limited number of farmers experiencing financial distress,” she said.
Top image: Ani Katchova presented at the Capitol Hill Briefing “Dynamics of Farm Profitability: Factors Influencing the Decline in Income,” organized by C-FARE and AAEA, February 11, 2016.
Bottom image: Ani Katchova discussed future trends in farm income and farmland markets with Senator Pat Roberts, Chairman of the Senate Committee on Agriculture, Nutrition, and Forestry, February 11, 2016.
Ian Sheldon Named Andersons Endowed Chair in Agricultural Marketing, Trade and Policy
With approval from The Ohio State University Board of Trustees, Ian Sheldon, a professor in the Department of Agricultural, Environmental, and Development Economics (AEDE), was recently named Ohio State’s Andersons Endowed Chair in Agricultural Marketing, Trade and Policy. His appointment will run through August 31, 2020.
In announcing the promotion, AEDE Department Chair Tim Haab noted that the appointment “…represents a recognition of Ian’s ongoing commitment to outstanding teaching, research and outreach at the interface of international agricultural, environmental and trade policy.”
As Andersons Chair, Sheldon oversees the Andersons Program in International Trade, which is a broad-based program focusing on research and outreach in the area of international trade and public policy.
Past research by the program has included topics such as food prices and trade policy, international trade and ethanol, and the connection between trade and the environment, among others. Funding for the endowment comes from the The Andersons, Inc.
Former holders of the Andersons Chair include Luther Tweeten, now AEDE emeritus professor, and Barry Goodwin, now a distinguished professor at NC State University.
“I am honored to follow in the footsteps of Luther Tweeten and Barry Goodwin, former incumbents of the Andersons Chair in the Department of Agricultural, Environmental, and Development Economics. I hope to continue their tradition of conducting high quality applied economics and policy research in the food and agricultural sector,” Sheldon said.
You can learn more about Professor Sheldon and the work of the Andersons Program here.
Highlights from the 2016 Agribusiness Club Trip to Texas
Author: Hannah Kirby, Agribusiness and Applied Economics Undergraduate Student
In January 2016, the Ohio State Agribusiness Club journeyed on our annual trip which took us all around the state of Texas. The trip consisted of 35 students, accompanied by AEDE staff member Holly Hall.
On the first day of the trip students arrived in Houston and visited one of Cargill's grain elevators. The group got to see how grain is pulled up off of ships, railroad carts, and trucks and then hoisted into storage bins. We then visited the Cargill control room where monitors displayed the availability of grain in the bins and we watched video of unloading of the company's commodities.
The second day took the Club to Richmond, Texas to see the George Ranch Historical Park. The ranch is a living history site that preserves and interprets the four generational storyline of a Texas family beginning in 1824 and spanning more than 100 years. We got to walk through the ranch's homes and see the long-horn cattle, which created the foundation of the farm. Our ranch tour ended with a show from the working cowboys on the ranch who demonstrated roping and herding skills. Students then headed to San Antonio to view the site of the Battle of the Alamo. In the evening, everyone got dressed up for dinner on the Riverwalk.
On the third day of the trip we journeyed to Fredericksburg, a town with lots of shopping. We hiked up to the Enchanted Rock, a .67 mi hike to a summit where we could see small pools of water and fragile wildlife habitats. After some fantastic barbeque, the group headed to Austin to stay for the night.
The next day we headed to Cargill's animal feed mill in Giddings, Texas. There we received an overview of the industry and operations as a whole, followed by a plant tour including everything from ingredient testing, maintenance, feed mixing, bagging and shipping. The next stop was College Station where we started with a tour of Texas A&M University's meat lab, followed by an extensive tour of their newly built equine center. The center’s barns were fully equipped with arenas, stables, locker rooms, classrooms and a beautiful event facility.
The morning of our fifth day we went back to Texas A&M University to tour their newly remodeled football stadium. We got a behind the scenes tour and learned the history and stories of the structure. Next, the group headed over to the island of Galveston to tour ADM’s grain elevator port. We got to see the port up close, how ships are loaded, and the port's control room.
Texas was a great experience for students, enabling us to gain extensive knowledge of working agribusiness in this part of the country. We would like to thank the sponsors who made the trip possible, along with all the facilities that welcomed us. We can’t wait to see where our next trip will takes us!
You can check out our photos from the trip here.
The OSU Agribusiness Club consists of members from different majors within the College of Food, Agricultural, and Environmental Sciences at The Ohio State University. The Club meets twice a month and hosts guest speakers from various agribusinesses who present on their companies and talk to students about internship and job opportunities. The Club also hosts an annual banquet and sponsors a scholarship for AEDE undergraduate students. Agribusiness Club members also take an annual trip within the U.S. each year.
Swank Program Piece in The Conversation: How Should the U.S. Government Help Coal Communities?
As the United States adopts policies to lower greenhouse gas emissions, some communities will benefit from the shift to lower-carbon energy sources. But others will lose.
Communities that have historically relied on coal production – especially in Appalachia – have been suffering major economic and employment losses for decades. Today far fewer miners are needed to produce the coal that we consume, and alternative energy sources like natural gas, solar and wind have chipped away at coal’s cost advantage. These forces have led to many lost jobs in coal-reliant regions, which will only intensify as the coal industry becomes more efficient in mining and the nation takes steps to reduce greenhouse gas emissions.
In response to coal’s uncertain future, last year the Obama administration proposed a US$3 billion plan called Power+ to assist coal-dependent regions.
Transitioning local economies that rely on resource extraction industries requires long-term investments. Instead of significantly expanding investment in coal-reliant communities, two-thirds of the Power+ Plan funding is directed toward providing what we consider life support to the coal industry. These investments are unlikely to have any significant short-term effect on employment in coal-reliant regions. In our view, the plan misses an opportunity to provide the sustained investments communities need to develop a post-coal economy.
Why has coal employment declined?
Since 1949, coal industry employment has fallen from more than 500,000 workers to fewer than 63,000 workers today. Coal advocates contend that environmental regulations, such as the Clean Air Acts of 1977 and 1990, have caused hardship and job losses in many coal-dependent regions. But what these policies actually have done is to change where coal is mined.
By requiring power producers to reduce sulfur emissions from electricity generation, the Clean Air Act triggered a shift in U.S. coal production from Appalachia, where coal is high in sulfur, to western states with abundant supplies of low-sulfur coal. However, overall U.S. coal employment was mostly unaffected by these regulations.
Instead, the decline in coal employment has been largely driven by market forces. The coal industry has invested in new mining methods and better machinery, so production requires far fewer coal miners.
What’s more, coal is rapidly losing market share. Natural gas surpassed it twice as a fuel for power generation in 2015. Coal once dominated all other sources as the primary fuel for U.S. electricity production, but now faces increased competition from other energy sources, most notably shale natural gas, wind and solar. Through September of 2015, all of the new electricity generation capacity added in the U.S. was powered by natural gas, wind and solar, while nearly all of the retired capacity was powered by coal.
Many coal advocates continue to blame environmental policies, such as the Obama administration’s Clean Power Plan – which the Supreme Court has temporarily blocked and will review in June – for job losses in the coal industry. But in reality, mining jobs are primarily driven by market forces.
How to help coal communities
To aid workers and communities where industries are declining, governments typically choose one of two approaches: offering direct support to those industries or funding investments in people and places.
Industrial support aims to maintain employment by providing subsidies or regulatory relief. The U.S. auto industry bailout, in which the Treasury Department invested nearly $80 billion in the auto industry to save General Motors and Chrysler from bankruptcy, is a recent example. President Obama’s proposed Power+ plan would provide $2 billion in tax credits for the deployment of carbon capture technologies on coal power plants to hopefully allow them to continue production. These tax credits are in essence a subsidy to coal producers.
But industry support policies are unlikely to provide effective aid for workers and communities in coal-dependent regions, for several reasons.
First, declining coal employment has largely been driven by productivity gains. Providing subsides to the industry may slow the decline in production, but their effect on employment will be diminished because mining operations are more productive and efficient at extracting coal. It is likely that most of the benefits from industry subsides will go to owners of coal companies who may live far away, not to workers or their communities.
Second, our research has shown that dependence on coal adversely affects noncoal employment in places like Appalachia. High levels of coal employment are associated with lower levels of entrepreneurship and higher levels of migration out of Appalachian regions as coal crowds out other types of businesses. Prolonging coal employment may actually slow the transition to other economic activities and reduce long-term economic growth.
Alternatively, aid programs could invest in people and places through initiatives such as job retraining programs, small business support, and infrastructure programs. The proposed Power+ plan designated $110 million for workforce development programs for coal communities. Of this, $20 million was earmarked for retraining coal workers to help them transition to new jobs and careers, and $90 million was designated for workforce development and training programs associated with mine cleanup.
So far, however, Congress has approved only a few small pieces of the Power+ plan. And even if the plan was fully funded, its workforce development programs would only provide a little more than $1,700 for each worker employed in the coal industry. Including the mining workers that have already lost their jobs reduces the dollar/worker amount even further. Moreover, research on the gains from retraining programs for laid-off workers has been inconclusive.
One issue is that displaced workers tend to seek new work based on skills from their previous jobs, which significantly outweighs the effect of job-retraining programs. When focusing on improving a particular community or region, retraining programs can have even less of an effect. If retrained workers cannot find work that matches their new skills, they are likely to migrate to another region.
The plan also included some funding for place-based initiatives, including $1 billion in funding for cleaning up hazardous abandoned coal mine lands and polluted waters and $25 million to the Appalachian Regional Commission to support economic development planning, entrepreneurial development and investment in basic infrastructure. We are more encouraged by these proposals, although we feel that they are underfunded.
Investing in quality of life
What does work? We have found that entrepreneurship and creativity are key factors for promoting economic development in lagging areas of Appalachia. To support this approach to development, aid programs should focus on improving the quality of life in coal communities and attracting new, highly skilled residents. This could be achieved by investing in natural resource amenities, which the plan does through its proposed $1 billion investment in abandoned mine cleanup.
Another strategy would be to investing in basic infrastructure, such as road maintenance, public schools and health care. By making a long-term investment in these necessary services, the federal government can free up local governments to invest local tax dollars in assets that are unique to each place. The Appalachian Regional Commission, a partnership between state and federal agencies, already facilitates these types of programs. Substantially increasing funding to the ARC would be an effective way to help coal communities.
President Obama’s Power+ plan rightfully acknowledges that energy policies are negatively affecting some regions, but we believe the money is misaligned. If the goal is to help coal-dependent communities transition to a post-coal economy, $2 billion in tax credits for the coal industry will be ineffective.
Instead, that money would be better used to invest in basic infrastructure. A place-based investment strategy does not guarantee rapid economic development in these areas, but it can improve the quality of life for people who are most impacted by our national shift away from coal.
Mark Partridge, Professor of Rural-Urban Policy, The Ohio State University; Mark Rembert, Ph.D. Student, The Ohio State University, and Michael Betz, Assistant Professor of Human Development and Family Science, The Ohio State University
Letter from Tim Haab, AEDE Department Chair
As another semester comes to an end, and another calendar year turns, I continue to be grateful for the opportunity I have to serve the students, staff and faculty of AEDE. Reflecting on the changes in AEDE over the past year I would be remiss if I didn’t point out the holes created in our faculty with the retirements of Dr. Carl Zulauf, Dr. Doug Southgate and Dr. Cam Thraen—all of whom started their careers at Ohio State within a year of each other in 1980-81. With over 100 years of service to AEDE between them it will be impossible to replace the breadth and depth of knowledge Drs. Zulauf, Southgate and Thraen brought to AEDE in their time here; and it would be futile to try. But as the turn of a new year always reminds us, time marches on, and new opportunities arise.
Over the coming months the AEDE faculty will be interviewing candidates for four new faculty positions. Hiring four new faculty members at once is a challenge the faculty does not take lightly; hiring this cohort could determine the direction of AEDE for the next generation of students. You can take a look at our website for details on each of the four positions we have advertised:
- Sustainable Food and Farm Policy,
- Sustainable Development and Economy, and
- Global Economic Modeling.
The position in Agribusiness bolsters our programs in Agribusiness and Agricultural Economics. The position in Sustainable Food and Farm policy is the first of three positions (along with Global Economic Modeling and Sustainable Development and Economy) partially funded through the University-wide Discovery Themes Initiative. Complementary to our strengths in agriculture, the Sustainable Food and Farm Policy position will provide teaching and research expertise on policies at the intersection of food, farming and sustainability. Similarly, the Sustainable Development and Economy position will provide teaching and research expertise at the intersection of economics, development and sustainability. The Global Economic Modeling position will provide a teaching and research skill set in the rapidly growing application of large-scale, computer-intensive models to global economic issues.
At times of change, such as this, it is normal to wonder: What will AEDE be in the future? I have a simple answer to that: we will be a collection of the best faculty and staff we can hire, committed to generating and disseminating new knowledge in applied economics. I am a firm believer that our hiring should dictate the direction of our programs, rather than our programs dictating the direction of our hiring. A defining characteristic of any high quality program is the continual hiring of high quality people and letting those people do what they do best. I believe we have the finest faculty and staff around and they are committed to providing the highest quality knowledge and service to our students.
As Department Chair, I have the opportunity to serve an outstanding group of faculty and staff; watch as they change the way others think; challenge others to examine their preconceived notions; cause others to grow in their confidence and their knowledge. If you have the opportunity this holiday season, I encourage you to join me in thanking our dedicated faculty and staff for their commitment to the betterment of society through education.
I wish you and your family the best this holiday season and Happy New Year.
SUSTAINS: Ohio State's Sustainability Learning Community
Did you know that an AEDE staff member had a critical role in bringing an innovative sustainability learning program that operates outside of the classroom to Ohio State students?
SUSTAINS (Students Understanding Sustainability and Taking Action to Improve Nature and Society) is an Ohio State learning community targeted at undergraduates studying or interested in the environment.
Gina Hnytka, an AEDE staff member, is one of the founders of SUSTAINS and currently oversees programming for the community. At AEDE, Hnytka directs program management for the Environment, Economy, Development and Sustainability (EEDS) undergraduate major and supervises AEDE student services for undergraduate and graduate programs.
How did SUSTAINS come to life?
Early in 2013, through her work with the EEDS program, Hnytka identified a need to provide opportunities for students to engage around issues of sustainability both inside and outside of the classroom. Students seemed eager for opportunities to pursue professional development, education, and other growth opportunities related to social, economic, and environmental sustainability, but they needed structure and a supportive community of peers, professionals, and faculty. The EEDS program was instrumental in supporting Hnytka’s proposal for this new initiative and in helping her to identify the group’s exhaustingly long, but meaningful acronym: SUSTAINS.
After garnering solid support from the community’s partners: Ohio State University Housing in the Office of Student Life, AEDE, the School of Environment and Natural Resources (SENR), and the College of Food, Agricultural, and Environmental Sciences (CFAES), Hnytka conducted a small recruitment campaign for program launch in fall 2014. Students applied to the program and the result was a group of 15 fantastic students who became what she now refers to as the “roots,” or the foundation of the SUSTAINS learning community. These students were enrolled in a variety of major programs but all were engaged with sustainability offices and organizations on campus.
Fast forward to year two and there are now 40 students living in the SUSTAINS learning community. This includes 25 new members (or what Hnytka calls “shoots”) and 15 upper-class members, some of which returned to the group as mentors, or “roots,” in their second year in the program. Sixty percent of the participants are enrolled in majors outside of CFAES. This connection to the larger campus community allows the students to engage with partners from many disciplines in the context of sustainability.
Aaron Moore, the Residence Hall Director for the building in which SUSTAINS is housed, is Hnytka’s co-lead for the program. Moore’s knowledge of co-curricular programming, effort in creating new opportunities, and dedication to the success of the students has been instrumental in growing and sustaining a high-quality program.
So what does SUSTAINS do?
SUSTAINS is an intentional residential experience that focuses on the exploration of the delicate balance between environmental, economic, and social sustainability. Students must apply to the learning community and, if extended an offer to join the group, all live in the same residence hall to better facilitate peer-to-peer engagement and learning. All members move to campus a few days early and participate in an early arrival program, which includes a welcome dinner with faculty, staff, and students (and their families); a day-long retreat; and this past year, a service day at Stratford Ecological Center.
All first year SUSTAINS students enroll in a seminar class with Hnytka during the fall semester. During this seminar experience students participate in dialogue around current issues in sustainability and have the opportunity to interact with and learn from experts on specific topics. Participants are also required to create and present a project proposal at the end of fall semester. This project must focus on improving an existing sustainability initiative on campus or developing a new one. At the end of the semester, students present their project proposals and vote on which project the entire group will implement during spring semester 2016. Current proposals include a community garden in the North Residential District, a large scale community service day sponsored by SUSTAINS, a recycling education campaign targeting local elementary schools, and reusing K-Cups to grow seedlings which will be donated to area gardens and campus dining services.
SUSTAINS also offers a robust calendar of events with a large number of engagement and growth opportunities for students. Over the past two years, the community has engaged with many professionals, agencies, and policymakers during a professional development trip to Baltimore and Washington D.C.; participated in the annual OEFFA conference; toured Blue Rock Station; completed community service hours with OSU Zero Waste, FLOW, Franklinton Gardens, OSU Wetlands, 4th Street Farms, Indianola Gardens, and other organizations; canoed the Olentangy with COMPAS; presented to Cardinal Turkson; learned about climate change and ice cores; hosted multiple dinner and dialogues with professionals and faculty…and the list goes on.
What began as a small project to support students has grown into a well-respected sustainability program for undergraduate students on OSU’s campus. If interested in learning more about SUSTAINS or collaborating with the group, please contact Gina Hnytka at firstname.lastname@example.org.
First and third images: SUSTAINS students during their Fall 2015 professional development trip to the Washington D.C. and Baltimore, MD region. Second image: Gina Hnytka.
Faggian Named the 2015 Geoffrey J.D. Hewings Award Winner by the North American Regional Science Council
Professor Alessandra Faggian was recently named the 2015 Geoffrey J.D. Hewings award winner at the 62nd annual North American meeting of the Regional Science Association International. The annual conference brings together hundreds of regional scientists working in North America.
The award, which was named in honor of Professor Geoffrey J.D. Hewings who introduced numerous graduate students to the study of regional science and mentored them as young scholars, recognizes distinguished contributions to regional science research by scholars who have completed their doctoral studies in the last 10 years. Dr. Faggian received her PhD in Economics from the University of Reading in 2005.
In her work at Ohio State, Dr. Faggian studies regional and urban economics, demography, labor economics and the economics of education. Her research on innovation has made ground-breaking contributions to the understanding of how regional knowledge spillovers lead to innovation. Her publications cover a wide range of topics including migration, human capital, labor markets, creativity, and local innovation and growth.
She has co-authored over 50 academic publications, of which 38 are in referred journals. Her articles have appeared in journals such as Oxford Economics Papers, Cambridge Journal of Economics, Journal of Economic Geography, Feminist Economics, Geoforum, Regional Studies, Papers in Regional Science and the Journal of Regional Science. She is co-editor of Papers in Regional Science and is on the editorial board of the Journal of Regional Science and Regional Studies, Regional Science.
In 2013, Dr. Faggian was appointed by the European Commission as one five jurors to select the European Capital of Innovation 2014 (iCapital Award). In 2010, she was elected councillor-at-large of the Regional Science Association International. In 2012, she became a member of the Board of Directors of the Western Regional Science Association and she was elected councillor-at-large for the North American Regional Science Council.
In 2008, AEDE’s Professor Elena Irwin was also awarded the Professor Geoffrey J.D. Hewings prize.
AEDE continues to cement its reputation as one of the top programs in the field of regional science. The department has received prominent awards in the field, hosted a graduate student conference on regional economics, has faculty travel extensively for engagement in the subject area, and the two most popular academic journals in the field of regional science are co-edited by AEDE faculty.
Additionally, in a recent independent study that ranked authors based on the number of publications in the ten core regional science journals during the period 2010-2014, Professor Mark Partridge was ranked as the most influential author working in the field and AEDE’s program was ranked as the number one regional economics program in the U.S. and among the top five in the world.
AEDE Profiles: Jack Willoughby
We recently sat down with AEDE master’s program student Jack Willoughby, a Princeton, New Jersey native and First Team Academic All-American, to talk all things football, applied economics, and life after graduation. Check out our Q & A with him.
You are a member of our school’s famous football team. Tell us about this experience and how you made it to Ohio State.
I originally played football at Duke University as an undergrad where I was a double major in economics and statistics. I went to Duke having never previously played football. I had always played sports and I was on the soccer team in high school. I was planning on playing soccer in college but I was also a huge college football fan. My grandfather played at the University of Oregon and I grew up loving college football. I thought I could either be a bench player on the Duke soccer team or take a shot at kicking a football as I could always kick a soccer ball pretty straight and far. I thought it would be pretty awesome to live out a dream of mine and try to play collegiate football. So, I bought an instructional DVD and taught myself how to kick and then managed to walk on to the Duke team as a freshman.
At first I was the fourth string kicker at Duke, however the three kickers ahead of me were seniors when I was a freshman and they graduated. Before my second season, Duke recruited the number one kicker in the country, so for most of my sophomore and junior years I backed him up. However, at the end of my junior year I started to do kickoffs for the team while he kicked field goals. We continued this way through my senior year.
By the end of my football career at Duke I had never kicked a field goal in my life in a competitive game and I really wanted to. So, I decided that I would try to look around and see if I could find a good team with a need for someone like me who can do kickoffs and who could also have a shot at kicking field goals. I made a list of all of the schools that I would want to play for, then I started doing research to see if they had quality kickers and if they might have a need for someone with my skills. I put together a highlight tape and sent it out to a bunch of coaches. I heard back from schools and underwent the first recruiting process of my life. I decided on Ohio State based on both the football and academic opportunities that I felt that I could take advantage of here.
When I arrived I was in a kicking competition with the incumbent kicker, Sean Nuernberger. Sean, by the way, has become one of my best friends at Ohio State. I ended up starting on both kickoffs and field goals for the first nine games of the season while Sean started on field goals in the last three games and I continued to do kickoffs.
Wow, that’s a pretty incredible story. So, tell us why you chose AEDE for your graduate studies at Ohio State.
I chose the AEDE program in applied economics because I think that to really make change in the world one needs the practical knowledge of how to apply economics to the issues facing our global community today. I thought that this program would teach me how to apply economics to correct inefficiencies in things like trade, environmental resource allocation, and agriculture. I knew that these skills would also translate well to other fields.
Before starting the program I also didn’t know much about agriculture, the environment, and resource allocation, and I knew that through this program I would get to learn about these areas and how to apply economics to challenges in these fields.
Finally, I thought studying applied economics at the graduate level would be fun and intellectually stimulating. I was also attracted to the fact that I could complete the degree in one year.
What have been some of your favorite things about studying in our applied economics program?
I like the fact that the MS program enrolls students from a variety of backgrounds. Personally, I have a lot of experience in economics and statistics from my undergraduate studies. However, during that program I had very little interaction with topics such as agriculture, the environment, resource allocation, as well as international trade and development. However, compared to me others that I have met in the program have less background in economics but considerably more background in fields such as agriculture, sustainability, or trade. It’s an interesting mix of backgrounds and perspectives that students bring to the table and I have learned a lot from my interactions with other students in the program.
I also appreciate the fact that I have learned a lot about applied economics beyond theoretical economics.
One of my favorite classes has been my cost-benefit analysis class with Dr. Allen Klaiber. He’s really a great teacher. I learned as a statistics major at Duke how to combine elicitation and bayesian statistics to incorporate uncertainty and most accurately calculate a range of results for a cost-benefit analysis. While this may have yielded the most statistically accurate forecast, simplicity of methodology is important when trying to convince people, like a budget committee, to agree with a proposal. Dr. Klaiber's course has taught me that the interpretability of methods is as important as accuracy of results in the real world.
I’ve also really liked Professor Ian Sheldon’s international trade economics class as I think that the content is really current. There is a lot going on right now in the world that has to do with international trade, such as the Trans-Pacific Partnership and presidential political discussions on things like labor migration and currency manipulation. In the course, we are provided with an international trade toolkit to understand what’s going on in the world, which makes reading the news more engaging.
So, what’s next after you graduate in the spring?
Well, the summer after my junior year at Duke I interned at McKinsey & Company in New York City. As an intern I spent half of my summer working for a financial services company and the other half for a state government energy authority. I was offered a job after graduation at McKinsey, which I deferred for a year to come to Ohio State to study and play football. This summer I will move to New York and begin my job.
At McKinsey I will be consulting with a wide variety of companies. I am looking forward to traveling and working with diverse clients in different locations. This will give me the opportunity to figure out what field I really want to dive into and spend my life doing, which is what really attracted me to consulting.
Any other thoughts before we sign off?
I’ve had an awesome experience both on the football field and in the classroom at Ohio State. While the conclusion of my football career is not something that I am looking forward to, and which I am pretty sad about, I am excited for the extra 20 or 30 hours a week in my schedule that will be freed up during the spring semester, which I hope to use to take advantage of the research resources offered in the MS program.
Photo credit, top image: BCSN.tv.
2015-2016 Agricultural Policy and Outlook Series
The Ohio and U.S. economies are poised for continued prosperity in 2016, although growth may be slower than recent years due to uncertainties in the national and international markets, an economist with the College of Food, Agricultural, and Environmental Sciences at The Ohio State University recently said.
“I remain optimistic on national growth,” said Mark Partridge, a professor in the college’s Department of Agricultural, Environmental, and Development Economics (AEDE) and chair of Ohio State’s C. William Swank Program in Rural-Urban Policy.
Partridge spoke Dec. 7 during the college’s kickoff of its 2015-2016 Agricultural Policy and Outlook series. The event initiates a series of local meetings to be held statewide.
The meetings will feature presentations by AEDE experts on matters the agricultural community should expect in 2016, including policy changes, key issues and market behavior with respect to farm, food and energy resources, and the environment.
In addition to Partridge, speakers for the series include:
- Matt Roberts, a grain economist, who will discuss his outlook for the 2016 grain market.
- Ian Sheldon, an international trade expert, who will discuss the Trans-Pacific Trade Partnership and what it might mean for U.S. agriculture.
- Brent Sohngen, an environmental economist, who will present an analysis of President Barack Obama’s Clean Power Plan and its possible impact on Ohio.
- Ani Katchova, leader of Ohio State’s Farm Income Enhancement program, who will discuss farm transitions in U.S. agriculture.
- Barry Ward, leader of OSU Extension’s Production Business Management program, who will present an analysis of land values, cash rents, crop input costs and potential crop profitability in 2016.
The county meetings, which are open to the public, will be held on the following dates:
- Dec. 16, 4 p.m., at the Attica Fairgrounds Social Hall, 15131 E. Township Road 12 in Attica. RSVP: Jon Ewald, email@example.com or 800-422-3641 FREE, or register online at www.suttonbank.com by Dec. 9. Cost: free with reservation by Dec. 9; $20 without a reservation.
- Jan. 20, 8:30 a.m., at Der Dutchman, 445 S. Jefferson Ave., in Plain City. RSVP: Union County Extension, 937-644-8117 by Jan. 13. Cost: $10.
- Jan. 20, 4 p.m., at the Bellevue VFW Hall, 6104 U.S. Route 20 in Bellevue. RSVP: Valerie Bumb, BumbV@fnblifetime.com or 419-483-7340 by Jan. 13. Cost: free with reservation; $22 without a reservation.
- Jan. 22, 9:30 a.m., at the Fisher Auditorium at the Ohio Agricultural Research and Development Center, 1680 Madison Ave. in Wooster. RSVP: Wayne County Extension, firstname.lastname@example.org or 330-264-8722 by Jan. 15. Cost: $15.
- Feb. 15, 7:30 a.m., at the Trinity Lutheran Church, Noecker Hall, 135 East Mound St. in Circleville. RSVP: Pickaway County Extension, 740-474-7534 by Feb. 8. Cost: $10.
- Feb. 19, noon, at Romer’s Party Room, 118 East Main St. in Greenville. RSVP: Darke County Extension, email@example.com or 937-548-5215 by Feb. 12. Cost: $20.
- Feb. 24, 6 p.m., at the Jewell Community Center, 7900 Independence Road in Defiance. RSVP: Defiance County Extension, firstname.lastname@example.org or 419-782-4771 by Feb. 19. Cost: $15 in advance or $30 at the door.
A meal is provided at each meeting and is included in the registration cost. Questions can be directed to the local hosts noted above.
Additionally, a new offering this year is a webinar to enable participants to join remotely from their own home or office. The webinar will be held on Feb. 1 at 6:30 p.m. RSVP at regonline.com/AgOutlook2016 by Jan. 25. Cost: $10.
For more information on the Agricultural Policy and Outlook series, visit aede.osu.edu/agoutlook.
International Trade Economist: Trans-Pacific Partnership Would Boost U.S Agriculture
After seven years of negotiations, 12 nations agreed to terms of the Trans-Pacific Partnership trade agreement in early October.
While each country now needs to ratify the agreement for it to be put into effect, an international trade expert at The Ohio State University said TPP could significantly boost the market potential for American farmers, entrepreneurs and other small-business owners.
“TPP is the largest regional free trade agreement that has been struck in the past two decades,” said Ian Sheldon, Ohio State’s Andersons Professor of International Trade and an economist in the Department of Agricultural, Environmental, and Development Economics.
Sheldon presented on the agreement at the Agricultural Policy and Outlook Conference Series organized by the department. The series kicked off on Dec. 7 on the Ohio State campus.
The partnership includes 12 countries that account for approximately 40 percent of the world’s economy: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the United States. The agreement is anticipated to reduce more than 18,000 tariffs, including some agricultural trade barriers.
Several institutions are forecasting impressive economic growth under TPP.
The U.S. Department of Agriculture’s Economic Research Service estimates that TPP will result in a 6.6 percent increase in agricultural trade by 2025. This increase will account for an additional $8.5 billion in the agricultural marketplace, assuming the complete elimination of existing agricultural tariffs by 2025, Sheldon said.
Additionally, the ERS anticipates that the agreement will result in a 33 percent overall increase in U.S. exports and a 10 percent increase in imports by 2025.
“American dairy farmers may benefit from a loosened dairy sector in Canada,” Sheldon said. “Japan’s beef market will get freed up a bit.”
In addition, the Peterson Institute for International Economics, a private, nonprofit and nonpartisan research institute, estimates that under TPP, $225 billion will be added to global gross domestic product by 2025, including $77 billion to U.S. GDP. The institute forecasts that U.S. manufacturing industry exports will grow by about 4.5 percent by 2025 due to TPP.
However, Sheldon said, some of the biggest winners look to be smaller countries involved in the partnership, such as Vietnam.
“We will see a much bigger impact on some of the emerging economies included in the negotiations,” Sheldon said. “For example, Vietnam is anticipated to receive a 10.5 percent increase in GDP thanks to TPP.
“My sense is that Vietnam is a winner because China is not in the agreement.”
Vietnam, which is a low labor cost economy, will expand as a manufacturing hub in industries such as textiles, and will have preferential access to these other 11 economies included in the agreement, he said.
“However, at the same time, it looks like the agreement partners are trying to tighten up things like state-owned enterprises, which would impact Vietnam since it is a communist country," Sheldon said. “These stipulations could also impact China, should it choose to participate in the future.”
Sheldon said the long-term objective of TPP is to align Asian economies and serve as a template for future free trade agreements that might include China.
Additionally, Sheldon notes that the agreement is anticipated to have an important impact on trade in services, rules on intellectual property rights, as well as environmental and labor regulations.
For example, through TPP there will be stricter enforcement of the Convention on Trade and Endangered Species, he said. Additionally, recognition of unions will be pushed, especially in developing countries that participate. Rules of origin will be important, which is always a complex and contentious issue in international trade discussions, Sheldon said.
However, in regards to the impact on agriculture, trade barriers such as the labeling and approval of genetically modified foods as well as food safety issues are not included under TPP, Sheldon said, noting that these issues are seen as the stalemates of international agricultural trade debates.
These issues are currently included in the Transatlantic Trade and Investment Partnership (TTIP) discussions, which are under negotiation between the European Union and the U.S. If the final TTIP agreement includes these elements, agricultural trade growth under TTIP would far outweigh trade growth under TPP, Sheldon said.
However, TTIP is still far from being agreed upon and signed.
Letter from Tim Haab, AEDE Department Chair
Students, Faculty, Staff, Alumni and Friends-
We are in an exciting and transformational time in the Department of Agricultural, Environmental, and Development Economics.
As I hope you can tell from the data presented below, this is a monumental period of change and growth at AEDE.
With fewer faculty, we are serving more students than ever before, and we are serving them with excellence.
Excellence in teaching, excellence in research and excellence in outreach.
Of course with change comes uncertainty, but more importantly, with change comes opportunity. I will never be satisfied saying that what we have always done is what we should always do.
Building on our traditional programs, we are continuing to develop new programs to serve even more students. Some of the change is driven by external forces (budgets, changing societal demands for student education), and some of the change is driven by changes in faces around the halls of Ag Admin. Familiar faces have left, and new faces are being welcomed.
While recognizing our past, AEDE will continue to strive to be one of the most forward-looking departments at Ohio State. I look forward to seeing what the future has to offer and I am committed to doing everything I can do, whether that is big or small, to ensure that AEDE achieves excellence in all that we do.
- Tim Haab, Professor and Chair
Southgate, Thraen and Zulauf Retire
Thraen spent over 40 years studying the U.S. and world dairy food industry during his career as a dairy economist. Of note, he recently served as the co-director of the National Program for Integrated Dairy Risk Management Education and Research, a program that developed educational materials and computer software for the dairy industry.
In his retirement, Thraen plans to spend more time with his family, especially his three granddaughters, fish, boat, and play golf. He notes, that "Shelle and I have no plans to leave Westerville, as we enjoy the seasons and this includes the central Ohio winter."
During his time at Ohio State, Southgate specialized in the study of natural resource issues in the United States and around the world. Most recently he served as the associate director of the university’s Subsurface Energy Resource Center, which the university created in September 2011 in response to accelerated oil and gas development in eastern Ohio. His next book – Globalized Fruit, Local Entrepreneurs – How One Banana-Exporting Country Achieved Worldwide Reach, coauthored with historian Lois Roberts, will be published in early 2016 by the University of Pennsylvania Press.
In his retirement, Southgate hopes to travel, visit his children often, and visit more of this country's magnificent national parks.
Zulauf, an agricultural economist, focused on commercial agricultural policy and commodity futures and options markets during his time at Ohio State. One of the nation's foremost farm policy experts, he has testified before Congress on farm policy and wrote a paper that laid out many of the principles that helped guide development of the Average Crop Revenue Election (ACRE) farm program enacted in the 2008 U.S. farm bill and the Agriculture Risk Coverage (ARC) program in the 2014 U.S. farm bill.
In his retirement, Zulauf plans to focus on his family's farm. He will also continue to contribute to the daily agricultural blog farmdoc daily, which is published by the University of Illinois.
All three emeritus professors will maintain close ties to the department.
Thank you to Cameron Thraen, Douglas Southgate, and Carl Zulauf for your many years of service to AEDE!
Meet AEDE’s Newest Faculty Member: Jon Einar Flåtnes
With the start of the 2015-2016 academic year, the department welcomed a new faculty member to its ranks: Jon Einar Flåtnes, a development economist, who joined AEDE as an Assistant Professor.
Flåtnes, who originally hails from Norway, is a recent graduate of the Agricultural and Resource Economics doctoral program at the University of California, Davis.
Learn more about Dr. Flåtnes in our Q & A with him below.
AEDE: Tell us about the research that you bring to the department.
Flåtnes: I recently graduated with a PhD in Agricultural and Resource Economics from the University of California, Davis where I was working in international development under Michael Carter.
My research interests are at the intersection of development economics, agricultural finance, and experimental economics. In my work I have employed a combination of theoretical, experimental and empirical methods to study questions related to optimal design of financial contracts for smallholder farmers in developing countries.
More specifically, my dissertation studied the welfare implications of two innovative financial contracts, specifically a joint liability group lending contract with a collateral requirement, and an index insurance contract based on remote sensing data.
I’m very pleased to be continuing this line of research here at Ohio State, and I’m currently involved in two different projects on this topic. The first uses framed field experiments in Tanzania to look at joint liability and index insurance, and the second studies the effects of interlinking the provision of hybrid maize with index insurance in Tanzania and Mozambique.
AEDE: What kinds of courses will you be teaching at AEDE?
Flåtnes: I’m very excited to be teaching two development courses this semester.
One is an undergraduate course in development economics (AEDE 4535), which covers basic concepts in international economic development.
The other course, which I’m co-teaching with AEDE’s Mario Miranda this year, is the first in the doctoral program’s development sequence of courses (AEDE 7421). In this course, we aim to expose students to the key literature in microfinance, experimental economics, index insurance, poverty traps, and agricultural household models, to name a few.
This is my first time teaching a full course, and it’s certainly a new and challenging experience for me but also incredibly rewarding. There seems to be a lot of interest in development economics among the AEDE graduate student population, and as we continue to develop our program, I believe that we have the potential to be one of the most attractive places to study development economics at the graduate level in the world.
AEDE: What attracted you to the world of development economics?
Flåtnes: Having grown up on a small farm in Norway, I have always had a strong interest in agriculture and I took an early liking to finance and economics.
However, it wasn’t until I took a course in development economics during my undergraduate studies at Macalester College in Minnesota that I truly realized how I could use the tools of economics to study some of the most pressing problems in the world today.
After my undergraduate studies, I spent four years working in the mortgage finance industry before embarking on my PhD studies at UC Davis. Prior to starting grad school, I had been very interested in microfinance and rural credit markets, and shortly after passing my qualifying exam, I got involved in a project in Tanzania working with a large microfinance institution called VisionFund Tanzania.
This project provided me with several opportunities to do field work in Tanzania, and the more time I spent talking to farmers, the more I understood the importance, but also the challenges, of designing effective financial contracts. The field work I did in Tanzania with local credit groups ended up forming the basis of my dissertation and has further bolstered my passion for development economics.
AEDE: What advice to you have for AEDE students?
Flåtnes: First, always do what you’re passionate about, and you will have a career that is fulfilling, both personally and professionally.
People will try to give you advice based on their own experiences and career paths but only you know what your strengths and passions are. If something doesn’t feel right, it’s probably not the right choice for you. It’s often convenient to choose a research project because the data is readily available or your advisor already has a project lined up for you, but if you’re not passionate about the idea, you may find yourself miserable and unmotivated three years later.
Second, work closely with your fellow colleagues to get and to provide feedback on each other’s research.
At the beginning of my third year at UC Davis, a few of us got together and created what we called a “dissertation group.” Our group, which consisted of five to six grad students working in development, would meet every week for an hour and a half to discuss our research. Meetings would typically consist of thirty minutes of check-in time, where each person would give a brief progress report, followed by a more extensive presentation by one individual. The process of writing a dissertation can sometimes be both frustrating and lonely, but these weekly meetings helped keep us on track and simultaneously gave us a unique opportunity to learn about what our colleagues were working on.
AEDE: Tell us about what you like to do in your free time.
Flåtnes: Given that I spend my entire week in front of a computer, there’s nothing I’d rather do with my free time than to be outdoors, rain or shine (or snow!).
While Ohio doesn’t exactly have the kind of mountains that I’m used to in California and Norway, I’m excited to explore some of the nearby hiking opportunities.
I’m also an avid cyclist but rather than racing on a fancy road bike, I prefer mountain biking or adventure cycling in remote areas.
Also, being a good Norwegian, I always look forward to the winter, and I hope we get some decent snowfall this year so I can bring out my cross country skis!
September 30, 2015
EEDS Program and AEDE Student Service Center Changes
Hnytka has been appointed to a joint role as the Environment, Economy, Development, and Sustainability (EEDS) Program Manager and the Student Service Center Manager.
Hall has been named the Undergraduate Program Coordinator for AEDE.
Launched in 2012, the EEDS undergraduate program has seen overwhelming success over the last three years with over 200 students enrolled in the major to date. EEDS is a joint program of AEDE with Ohio State's School of Environment and Natural Resources (SENR). Due to this program growth, the department has restructured management of the EEDS leadership team to provide longevity and a common vision to the program.
In her new role as EEDS program manager, Hnytka will serve as program director of operations and program development for EEDS. As the Student Service Manager for AEDE, Hnytka will be responsible for overseeing the AEDE Student Service Center and managing AEDE student services programs and staff. She will also continue to work with the SUSTAINS learning community on campus.
In her role as Undergraduate Program Coordinator for AEDE's undergraduate program in Agribusiness and Applied Economics, Hall will become the primary contact for all Agribusiness and Applied Economics advising and programmatic needs. Hall will also provide advising services for EEDS Sustainability and Business, and Environmental Economics students.
Additionally, Neil Drobny will serve as the Development and Outreach Manager for the EEDS program.
The AEDE Student Service Center, which launched in early 2014, provides academic support services to all undergraduate and graduate students enrolled in AEDE’s programs. The Center serves as a one-stop shop for all AEDE students and should be the first point of contact for students for all academic questions and needs.
The Center is located in Suite 249 of the Agricultural Administration Building and is usually staffed during normal working hours Monday through Friday, though appointments are recommended (see the Appointment Request Form).
Ani Katchova Elected to AAEA Executive Board
This content is from a news release published by the Agricultural & Applied Economics Association (AAEA).
AAEA Elects New Executive Board Member
Dr. Ani Katchova Brings Worldwide Experience to Association Board
Ani Katchova, Ph.D., of The Ohio State University begins her three-year term on the Agricultural & Applied Economics Association’s Executive Board. Dr. Katchova is an Associate Professor and Farm Income Enhancement Chair at the Department of Agricultural, Environmental, and Development Economics at her alma mater.
In addition to her work at The Ohio State University, Dr. Katchova served as an associate editor of the American Journal of Agricultural Economics, was a Fulbright Specialist Scholar and AAAS Science & Technology Policy Fellow, and is the founder of the Econometrics Academy, which offers world-wide education in econometrics.
Before being elected to the Executive Board, Dr. Katchova worked with AAEA as the Chair of the Economic Statistics and Information Resources Committee and currently serves on the Association’s Publications Committee and Government Relations Committee.
“With its culture of engagement AAEA has been the leading organization in our field for networking opportunities and presenting and discussing work with colleagues,” Dr. Katchova said. “We can continue to innovate by using new technology to increase networking and collaboration among AAEA members."
Learn more about AAEA.
September 3, 2015