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Adjustments Of Midwest Grain Farm Businesses In Response To Increases In Petroleum Energy Prices

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  • Kliebenstein, James B.
  • Chavas, Jean-Paul

Abstract

Since the early 1970s, the increasingly tight energy situation has introduced a new emphasis, if not a wholly new concern, into the economics of agriculture. Assuming the tight energy situation continues, or even intensifies in the future, it is likely to require economic adjustment in U.S. agriculture—an agriculture heavily dependent on fossil fuels. Dvoskin and Heady have shown that when maximizing farm profits is the primary goal, energy price levels have a minimal impact on acres of crops produced under reduced tillage methods in the U.S.. However, when energy minimization was the primary goal, there was a substantial shift from conventional to reduced tillage. An ERS study proposes that forms of reduced tillage can be a major means of achieving fuel savings. Reduced tillage methods do reduce fuel requirements, but these are accompanied by higher chemical requirements. Eidman, Dobbins and Mapp found that with current energy prices, a form of reduced tillage for corn production was preferable to conventional tillage methods. In a recent study, Musser and Marable concluded that with respect to machinery purchases, energy cost increases are providing incentives for substitution of labor for capital.
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Suggested Citation

  • Kliebenstein, James B. & Chavas, Jean-Paul, 1977. "Adjustments Of Midwest Grain Farm Businesses In Response To Increases In Petroleum Energy Prices," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 9(2), pages 1-6, December.
  • Handle: RePEc:ags:sojoae:30520
    DOI: 10.22004/ag.econ.30520
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    References listed on IDEAS

    as
    1. Schneeberger, Kenneth C. & Breimyer, Harold F., 1974. "Agriculture In An Energy-Hungry World," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 6(1), pages 1-5, July.
    2. Schneeberger, K. C. & Breimyer, Harold F., 1974. "Agriculture in an Energy-Hungry World," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 6(1), pages 193-197, July.
    3. Musser, Wesley N. & Marable, Ulysses, 1976. "The Impact of Energy Prices on Optimum Machinery Size and the Structure of Agriculture: A Georgia Example," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 8(1), pages 205-211, July.
    4. Philip F. Warnken, 1976. "Impact of Rising Energy Costs on Traditional and Energy Intensive Crop Production: the Case of Nicaragua," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 24(2), pages 15-22, July.
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    Cited by:

    1. Kliebenstein, James B. & McCamley, Francis P., 1982. "Impacts Of Energy Allocation On Income And Risk For Crop Producers," 1982 Annual Meeting, August 1-4, Logan, Utah 279178, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Kliebenstein, James B. & McWilliams, Stephen A., 1980. "Investment, Energy, And Labor Tradeoffs In Swine Production," 1980 Annual Meeting, July 27-30, Urbana-Champaign, Illinois 278391, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Kurkalova, Lyubov A. & Randall, Stephen M., 2015. "Elasticities of demand for energy inputs in crop production: impact of rotation," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205298, Agricultural and Applied Economics Association.
    4. Kliebenstein, James B. & McCamley, Francis P., 1983. "Energy-Related Input Demand By Crop Producers," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 15(2), pages 1-7, December.
    5. McCamley, Francis P. & Kliebenstein, James B., 1981. "Demand Elasticities And Cross Elasticities For Diesel Fuel--Crop Producers," 1981 Annual Meeting, July 26-29, Clemson, South Carolina 279240, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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