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APR: Winter 2017 Articles

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Past and Future of Farm Bill Payments

Alejandro Plastina
In the summer of 2015, producers were allowed to elect their farms into one of the two new commodity programs introduced by the 2014 Farm Bill: Price Loss Coverage (PLC) or Agricultural Risk Coverage (ARC). The coverage of the latter program is offered at the county level (ARC-CO), and at the individual farm level (ARC-IC). Less than one percent of all US base acres are enrolled in ARC-IC. Each spring, farmers who want to participate in the elected commodity programs must enroll their farms, but cannot modify the program election decisions made in 2015. So far, farmers were able to enroll twice in ARC/PLC programs: in 2015 for the 2014/15 and the 2015/16 marketing years, and in 2016 for the 2016/17 marketing year.

Motorists’ Willingness to Pay for E85 versus E10

Sebastien Pouliot and Kenneth Liao
In November 2016, the Environment Protection Agency (EPA) released the final rule for biofuel volumes under the Renewable Fuel Standard (RFS) for 2017. The total renewable fuel volume requirement for 2017 is 19.28 billion gallons, up from 18.11 billion gallons in 2016. Of the total renewable fuel volume, 15 billion gallons may be met with conventional biofuel, establishing the implied mandate for ethanol. This ethanol mandate was 14.5 billion gallons in 2016. Much has been written about the blend wall and how difficult it is for ethanol consumption to exceed the volume that can easily be blended in regular gasoline (E10), which contains no more than 10 percent ethanol. There are many ways to break the blend wall, but it appears that greater sales of gasoline blends that contain more than 10 percent ethanol will play a major role. In two recent studies, we examine the demand for E85, which contains between 70 and 75 percent ethanol.

International Trade Has Been Major Source for Strengthening Prices

Lee Schulz and Chad Hart
Over the past few months, crop and livestock prices have worked their way higher despite record production across the board. Those large supplies have been met by strong demand for agricultural products. International demand has increased significantly and that has allowed prices to rise. Recent policy discussions, such as the potential for the US to impose import taxes, have heightened concerns that export demand may retreat. However, currently, the international marketplace is providing a surge of support to the US farm economy. Protein demand globally seems to be driving export growth for both livestock (direct meat demand) and crops (feed grain demand to raise more livestock and meat). All export data shown is as of Feb. 4, 2017.

Hospital Closure and Hospital Choice: How Hospital Quality and Availability will Affect Rural Residents

Deepak Premkumar, Dave Jones, and Peter Orazem
The population shift from rural to urban regions has decreased the population density around hospitals in small towns and rural areas. At the same time, the availability of improved road systems that lower travel times, an improved ability to deliver health services via the Internet, and larger urban-rural gaps in access to the latest medical technologies may make urban hospitals more attractive for rural patients. Following a pattern of decline that started in the 1970s, these factors have led to a steady decrease in the number of rural hospitals over the last two decades¢since 1990, the number of rural hospitals has decreased 20 percent while the number of urban hospitals has only decreased 3.5 percent.