Proposed Objectives of the Project:
The objective of this study (Devin Serfas’ dissertation project) is to exploit a unique panel dataset from Saskatchewan (1) to model and measure the implications of alternative cropping choices—including tillage systems, crop rotations, and fallow—for quantities of atmospheric CO2 sequestered as soil organic carbon (SOC), (2) to measure the benefits and costs to farmers from adopting cropping choices that increase SOC over time, and (3) to explore potential policies for encouraging farmers to adopt cropping choices that sequester atmospheric CO2.

Summary of Research to Date:
The project has gone largely according to plan. Devin has completed good drafts of the first two chapters of his dissertation, corresponding to the first two objectives enumerated above, and has made a beginning on the third. The plan is to complete the first two chapters in the current quarter (Spring 2023), to make substantive progress on the third chapter over the Summer while in residence at the University of Saskatchewan, and to wrap up the dissertation during the Fall quarter, 2023. The Giannini Foundation mini-grant was used to leverage funding support from the Saskatchewan Wheat Development Commission which will continue to support Devin through the Summer and Fall of 2023.

Specific Objectives of the Project:
The objective of this study is to quantify the role of American Viticultural Areas
(AVAs) in mediating the relationship between (1) an evolving climate (the long-run expected weather in a region), (2) weather variation around the regional norm (vintage effects), and (3) the variety-specific price premia and quality (expert rating scores) for varietal wines in different parts of California. The more specific objectives are (1) to compile data on prices and expert rating scores for California wines and match these to data on relevant measures of weather and climate, (2) to estimate statistical models of varietal wine prices (and ratings) as a function of these measures of weather and climate for each of the main varieties, and (3) to derive estimates of the location-specific relationship between prices (and ratings) and climate and draw inferences for the future matching of varieties to AVAs in light of climate projections.

Project Report/Summary of Results:
We made considerable progress on developing concepts, preparing and cleaning data, and consulting others on interpretation of weather and climate data from different sources. We have estimated preliminary models for parts of the work and are at advanced stages of preparation for the rest of it. We anticipate completing parts of the work in 2022, and some results may be finalized and published within this year, but the more complete analysis is expected to take at least another year—i.e., until mid-2023. Initial results are promising. We expect to complete at least two papers by mid-2023.

Specific Objectives of the Project:
The aim of this study is to extend upon our initial self-funded pilot study and develop a detailed quantitative economic understanding of Brettanomyces and alternative Brett management practices. Ultimately, we plan to develop a model to estimate potential costs and inform optimal Brett management practices across different segments of the California wine industry.

Project Report/Summary of Results:
We have completed the project, essentially as envisioned, on a 12-month delayed timetable. We have published one paper and we are engaged in continuing discussions with industry representatives about extensions to the work. The project has been very useful for building these relationships.

Project Report/Summary of Results
Significant initial progress has been made in developing concepts and compiling data. However, the strategy for the work in 2017–2018 has changed because we were able to use the seed money from the Giannini mini-grant to develop a proposal and secure funding for a more ambitious project.
We were awarded $500,000 from USDA-NIFA for a project on “Accounting for biological capital in indexes of agricultural inputs and productivity: Concepts, measures and application to agriculture in California and Minnesota.”

Our broad goal in this new project is (1) to derive new and improved measures of inputs, outputs, and productivity in U.S. agriculture, by explicitly treating the biological stock of trees and vines as part of the capital stock, and (2) to explore the implications of these new measures.
More specifically, first, we will devise and develop new measures of capital input that explicitly incorporate biological capital in the form of living trees and vines and the associated physical capital of trellises and irrigation equipment used in perennial crop production in two states: California and Minnesota. Second, we will incorporate these new measures of capital input into existing agricultural productivity data, compare the new measures with pre-existing measures, and draw inferences for understanding past and prospective patterns of input use, production, and productivity.
This project, which encompasses the original Giannini project but enables it to be conducted in greater depth and in a broader context, will be undertaken jointly with Dr. Wei Zhang (PhD, UC Davis ARE, 2013), now on the faculty at Connecticut College, and in collaboration with Dr. Philip Pardey and other colleagues at the University of Minnesota, over the period April 2018 to March 2022.

Specific Objectives of the Project
Examine the benefits from precision agriculture technology and mechanisms of adoption in heterogeneous production environments. Studies of precision agriculture technology have traditionally been done in applications to field crops, and comparatively little research has been done on specialty crops, especially perennial crops. The objective of this study is to examine and document the emerging applications of precision agriculture technology to high-value specialty crops in California, and to demonstrate the potential benefits from adoption.

Project Report/Summary of Results
Over the winter quarter we employed a GSR to compile a literature review of the existing studies on the benefits of precision agriculture technology for agronomic and horticultural crops. We found that precision agriculture technologies available to agricultural producers are abundant, but studies on the economic benefits of these technologies and the rates of adoption are scarce. We decided that the best course of action for completing this project would be to supplement the review of the literature with a review of the current best practices related to the production of major horticultural crops, and, possibly, interviews with representatives of the industry to gauge the trends of adoption of major new technologies. We plan to complete this work over the summer, as it requires a more targeted approach and a slower pace.

Specific Objectives of the Project

We will study the economic effects of California's air quality regulations on dairies and provide insights into the future design of environmental policy related to the livestock sector. This research will make four contributions. First, we will identify consequences of local air quality regulations on dairies for ambient air concentrations of ozone and particulate matter. Second, we will estimate the economic cost of local air quality regulations borne by dairies in the South Coast Air Basin and San Joaquin Valley. Third, we will investigate the interactions between air quality and water quality regulations and empirically test whether these different regulations are complementary or incompatible. Fourth, our research will shed light on cost-effective approaches to regulate environmental extern alities from livestock.

Summary of Results

California dairy farms have experienced hard times in recent years. In addition to changes in market conditions in both input and output markets, the burden of environmental and other regulations has been mentioned as a culprit. This research examines the effects of a local air quality regulation on the costs of milk production for dairy farms in the San Joaquin Valley in California. Unlike previous analysis of the effects of environmental regulations on ag ricultural production, in this work it was possible to identify the realized operational changes associated with abiding by the regulation. Estimated adoption rates of different pollution-mitigation practices reveal that dairy farms have adopted labor-intensive production practices to comply with the air quality regulation. Using farm-level cost data on a panel of dairy farms, the effects of the regulation on the costs of milk production were estimated. Different from ex-ante analyses, my econometric results indicate that the air quality regulation has not affected the total costs of milk production. Estimates from different specifications indicate that the regulation may have reduced feed costs during some periods, perhaps because some pollution-mitigation practices can reduce feed fermentation. The regulation has increased the costs of hired labor by about $0.15 per hundredweight of milk, which is equivalent to an 11% increase in hired labor costs for dairy farms facing the regulation.

The objective of the research is to simulate how the greenhouse gas (GHG) cap-and-trade program will affect the dairy industry in California, including both dairy farms and dairy product manufacturers. The simulation analysis of the effects of the GHG cap-and-trade program indicates that carbon pricing leads to (a) higher prices of dairy products and lower energy use, and (b) lower prices of milk when the output-market equilibrium effect dominates the factor substitution effect, and vice versa. The magnitudes of the changes in the equilibrium prices and quantities depend primarily on the elasticity of milk supply, the own-price elasticity of demand for manufactured dairy products, and the elasticity of substitution between milk and energy in the production of manufactured dairy products. Results imply a generally small influence of dairy policies. The existence of dairy policies lowers the potential welfare gains for consumers of fluid dairy products from carbon pricing.

Specific Objectives of the Project

The objective of the research is to simulate how the greenhouse gas (GHG) cap-and-trade program will affect the dairy industry in California, including both dairy farms and dairy product manufacturers. The simulation results will demonstrate the changes in carbon emissions, production and product portfolio, profits, and competitiveness. We will develop theoretical models to capture both the horizontal competition between California's dairy products and the products manufactured by other states that will not adopt climate policy any time soon and the vertical relationship between California's dairy product manufacturers and dairy farms. To calibrate the economic impacts, we will estimate the carbon intensities of the dairy producers in California and the rest of the country, and the demand elasticities of dairy products.

Summary of Results

The simulation analysis of the effects of the GHG cap-and-trade program indicates that carbon pricing leads to (a) higher prices of dairy products and lower energy use, and (b) lower prices of milk when the output-market equilibrium effect dominates the factor substitution effect, and vice versa. The magnitudes of the changes in the equilibrium prices and quantities depend primarily on the elasticity of milk supply, the own-price elasticity of demand for manufactured dairy products, and the elasticity of substitution between milk and energy in the production of manufactured dairy products. Results imply a generally small influence of dairy policies. The existence of dairy policies lowers the potential welfare gains for consumers of fluid dairy products from carbon pricing.

Specific Objectives of the Project

The overall objective of the proposed research is to develop a detailed, practical, quantitative understanding of the economic consequences of Pierce's disease and alternative management strategies.More specific objectives are to quantify the economic impact of the disease, to evaluate alternative management strategies including alternative research investments, and to guide policy decisions, including research priorities. To pursue these objectives we propose to develop an economic model of the California wine and wine-grape sector that can be used to simulate market outcomes under scenarios with varying prevalence of Pierce's disease and alternative technologies and policies. We can thus assess the economic consequences of these alternative technologies and policies for various stakeholder Groups. Our model will be designed with a view to using it to assess the benefits from alternative types of new technologies that might be developed from new research investments, as well as alternative management strategies based on currently available knowledge and technology.

Summary of Results

We address economic questions related to Pierce's Disease (PD) by developing a model of the supply and demand for California wine grapes. Drawing on advice from scientists who study the disease, combined with information gleaned from interviews with vineyard managers, we have modeled the problem of the Blue-Green Sharpshooter (BGSS) in Northern California, and the Glassy-Winged Sharpshooter (GWSS) in Southern California, the main vectors of PD in wine grapes. The results from this work have been incorporated into a multi-year, multimarket supply and demand simulation model of regional wine grape production in California. This model will be used to evaluate the impact of alternative PD/GWSS management strategies and the likely benefits from investments in alternative R&D projects related to the management of PD/GWSS. Research products from this project include graduate student orals, prospectus, and dissertation essays, and several conference papers and posters. Work for formal publication is underway.