As farm sector prices continue to increase at rates higher than any since World War II, attention is being given to the cause of the price increases and their structural impacts on the farming sector. Land, a major component of farm assets, has been the focus of many studies examining the effects of inflation. Melichar showed current increases in land prices to be consistent with productivity gains. Lee and Rask illustrated that even though current levels of land prices may be justified, firms may have negative cash flows, especially if loans are repaid on level repayment plans. Current inflationary conditions led Robison to conclude that though current land prices may be justified, the benefits and costs are unequally distributed and that, increasingly, persons who in earlier years made land purchases are more able to afford to purchase more, thereby accelerating the trend toward fewer and larger farms.

Current income tax provisions bear little resemblance to those enacted by the original law, the Revenue Act of 1913. Because of the progressive nature of the federal income tax, a need for special provisions for capital gains was recognized. In 1921, gains from the sale or disposition of capital assets and certain other capital items were identified and taxed differently from income from other sources. The capital gains provisions resulted in the separation of ordinary and capital gains income.

Gains and losses from the sale or exchange of a capital asset and other capital items are classified as either short- or long-term, depending on the period of time the property is held. Income from items held for less than the required period is taxed as ordinary income. Income from items held for longer than the required period receive preferential treatment only if the net long-term gain exceeds the net short-term capital loss. If long-term capital gains are realized, 60 percent of the excess gain is claimable as a deduction; the remaining 40 percent of the net gain is taxed at the taxpayer's ordinary tax rate. If the net short-term capital gain exceeds the net long-term loss, 100 percent of the excess is taxable at the normal rate.

In spite of the economic benefits of insecticides to farmers and consumers, growing concern about the potential health and environmental hazards of some insecticides has resulted in the investigation of many insecticides by the Environmental Protection Agency (Boraiko). The use of several insecticides has already been banned. Others are under review and their use may be banned or restricted in the future.

The Environmental Protection Agency must evaluate, monitor, and regulate a wide range of chemical compounds. To do so requires the collection and analysis of information on the environmental, health, and economic impacts of the use of many diverse chemicals. Though regulatory action by the Environmental Protection Agency may reduce health and environmental risks, such action can also alter the profitability and performance of a farming operation.

One of the most important concepts of production economics, the linkage of costs of production (expressed in terms of output) to the production function, is poorly treated in most intermediate level microtheory and production economics texts. In several texts the linkage is so sketchy it is of limited pedagogical value (e.g., Gould and Ferguson; Heady; Leftwich). The best available treatments are those of Doll, Rhodes, and West, Buse and Bromley, and Goodwin, all of which are in introductory texts. Certainly most students are not ready for abstract, analytical geometries in a first course. However, many upper-division students not only do not understand the input side — output side linkages and the resulting consistency of the input profit-maximizing conditions and the output profit-maximizing conditions, but also become confused as to the meaning of and relationship between marginal revenue and marginal value productivity and between marginal cost and marginal factor cost. Treatments like Goodwin's Figure 9.6 (p. 145) must be reinforced and more fully developed at the intermediate level.

Among agricultural economics faculty in the Southern region of the United States, awareness of research productivity, teaching loads, and faculty rewards is growing. Studies on research productivity have included classifications of contributors to this journal (Oursbourn, Hardin, and Lacewell), the Journal of Farm Economics (Holland and Redman), and major economic journals (Opaluch and Just). The findings generally indicate that agricultural economics faculty of universities in the Southern region have not ranked very high as contributors to major economic journals (Holland and Redman). Opaluch and Just found only two universities in the Southern region among the top 20 universities contributing papers to the American Journal of Agricultural Economics. Among universities contributing to major national economic journals, only one of the top twelve was in the Southern region.

In their article entitled, “A Model of Weekly Price Discovery for Florida Celery,” Shonkwiler and Pagoulatos provide an analysis of the pricing power of the Florida Celery Exchange, a marketing cooperative that represents all of that state's major celery producers. In their description of the activities of the Exchange, the authors cite several factors which indicate that Florida celery producers may have the ability to raise prices above levels that would prevail in a competitive U.S. celery market. Such factors include a market share of approximately 40 percent and a marketing allotment program which has prevented other producers from entering the industry since 1965. Shonkwiler and Pagoulatos then proceed to estimate the weekly demand faced by the Exchange and conclude, on the basis of the point estimate of an own-price elasticity, that the prices charged over the period 1972-1978 are inconsistent with those that would have been charged by a profit-maximizing monopolist. This conclusion leads them to state that the Exchange is socially beneficial because, they claim, it has provided price stability and market information without raising prices much above competition levels.

Nelson Updaw raises several issues concerning our study of weekly price discovery for Florida celery. His comments require some clarification and correction so that his criticisms can be allayed.

First, there appears to be some confusion surrounding the intraseasonal (semiweekly) operation of the Florida Celery Exchange and interseasonal acreage allotments. During the time period of our analysis (the 1972–1977 seasons) no marketing allotments were imposed by the Exchange as Updaw suggests; rather, the Exchange practiced only semiweekly price-setting activities, and acreage allotments were applicable on an annual basis only.

In a recent article in this journal, DiPietre, Walker, and Martella presented the derivation of the Total Requirements Tables for the 1972 U.S. input-output study. As this same derivation is available from the Bureau of Economic Analysis, it is unfortunate that the article contains a minor algebraic error.

The error is made in the derivation of equation 7 in the article and is carried through equations 8 and 9.