A frontier production function may be thought of as a “best practice” production function (Førsund and Jansen) or a function that expresses the maximum product obtainable from various combinations of factors given the existing state of technical knowledge. It is the theoretical counterpart to farm enterprise budgets or processing plant budgets derived by economic engineering methods to describe the best possible production processes.

Two approaches to formal multiple objective decision analysis are described, illustrated and compared. These two approaches, generating techniques and goal programming, are illustrated by the solution of a simple numerical example. This solution combined with some lessons from the field of psychology provide a basis for some judgments on the relative merits of the approaches.

Transportation costs between production regions affect interregional competitive relations. Rising fuel costs have substantially changed the transfer cost function for motor truck transport. A method for estimating the direct impact on consumer and producer prices of fuel cost increases is presented. Example computations are made for long distance transport of vegetables, eggs, meat, and milk to illustrate the methodology. The implication of markup procedures by marketing firms on consumer prices is shown. Differential impacts on producers depend on the type of food product and scale of operation in New England. Impacts on consumer food budgets are suggested.

I am honored by the invitation to address this group, whose members and their institutions represent such a significant portion of the unique mission of land-grant institutions in the region.

The feasibility of reducing delivery frequency as a means of lowering energy and transportation costs is examined. Four reduced delivery situations are examined using a net present value criteria. While substantial energy savings are possible the cost of equipment necessary to accommodate these reductions outweighs the energy savings at current fuel prices. Substantial fuel price increases are required before such reductions are worthwhile. Good management requires examination of the net effect of energy savings on net revenue.

As we enter a new decade, it seems logical to take stock of the state of our profession and to attempt to assess where we may be heading and what we may be doing in the years ahead. It may be less logical or enlightening to ask a research administrator to make this assessment. Furthermore, I believe that researchers themselves should be identifying the problems and mapping out the new directions. However, there will be certain institutional constraints that will play a significant role in your ability to carry out our research mission; and it is to these constraints that I wish to speak first.

This paper examines agricultural use-value legislation in light of statewide reassessment in New York. Historically, farm real estate has been underassessed relative to other classes of property. Thus, statewide reassessment at full value would significantly increase farmland property taxes. These increases could be more than offset by widespread application of use-value assessment. In 1979, the tax reductions, when compared with full-value assessment, would be about $8 per acre. The tax bases of some rural communities may be reduced significantly by use-value assessment.

The opportunity to meet with you today is much appreciated. I certainly want to compliment you on the wide range of topics to be discussed at this conference. It provides a clue to your theme, “New Directions for the 80's.” I have a long-standing interest in Northeast agriculture and most of us here grew up and have worked in this area. And, of course, I am convinced that the Cooperative Extension Service is a most important part of the agricultural scene.

It has been ten years since I last spoke to this group; long enough for you to have forgotten what I said at that time. As an expatriate from the profession I am delighted to have this opportunity to meet with you again. I am especially pleased that you have chosen to meet here and on behalf of Dean E. J. Kersting I extend a very sincere welcome and best wishes for a successful program.

The purpose of the analysis is to forecast livestock and poultry numbers for New England and the U. S. The effect of increasing feed transportation rates on these numbers is also examined. The direct estimates of the reduced form equations are utilized in forecasting numbers for seven livestock and poultry classes. Forecast rules of thumb are specified in the simplified lag model. A large model consisting of 26 predetermined variables yields very high degrees of accuracy with errors mostly less than one percent.

Control of sediment has become increasingly important as an element of many water quality improvement programs. An analytical method using the universal soil loss equation and linear programming to determine the cost-effectiveness of alternative sediment control practices is developed. Applications of this method to four case study farms and a hypothetical watershed are analyzed. The analyses illustrate the need for developing priorities so as to achieve greatest reduction in sediment losses per dollar of cost. The costs per unit of sediment reduction vary greatly with area, soil, and strategy or technique used.

Private and public investment programs are often implemented without adequate knowledge of their employment or income distribution impacts. For example, although numerous studies have been done on the environmental and economic efficiency aspects of electricity generation alternatives, relatively little is known of who will benefit and by how much.

The Maine Department of Inland Fisheries and Wildlife is currently in the throes of a budgetary crisis. Negotiated employee salary increases and the general inflationary trend of the 1970's have resulted in significant increases in operating costs. The Department, like many of its counterpart agencies in other states, is funded primarily from dedicated revenues collected from the sale of hunting and fishing licenses. Since there are no built-in adjustments for inflation in license fees, as there are in sales taxes or even income taxes. Department revenues have not kept pace with costs. As a result, the Department is projecting a budget deficit of around one million dollars for FY 1980–81.

A cost curve for livestock auction markets was estimated using a frontier function estimator. This estimator has the advantages of consistency and asymptotic efficiency (for certain disturbance specifications). The one-sided residuals satisfy theoretical requirements for cost curves and allow estimates of operational efficiency. Results indicate little size savings above 50,000 LMU, (12 percent of markets in 1976). Estimated operational inefficiencies ranged from 0 to 45 percent. Total technical efficiency (size diseconomies plus operational inefficiencies) are high for some markets and some size groups. Little consolidation is predicted for the industry because the estimated cost of technical inefficiency is small compared to distance related costs (e.g., transport and shrink).

Milk supply response by dairy farmers in Delaware was analyzed employing distributed lag price structures for number of milk cows and milk production per cow. A polynominal distributed lag model is fitted to quarterly data with deflated prices for the period 1966 to 1978. The variations in the number of milk cows is explained by about 98 percent. Farmers react positively to milk prices after 1–2 years, while wages and feed prices have a negative impact on cow numbers. Milk production per cow shows positive adjustments to milk prices after 6 to 15 months. Technology and feed prices influence also milk production While the short-run price elasticity of milk production is only .2, the long-run aggregate elasticity grows to 2.8 percent. Intermediate-run projections of milk supply were also performed with the model.

Outer space would appear to be a natural resource whose use is characterized by open access and a minimum of congestion externalities. However, over the past two decades, there has been an increase in demand for the limited number of “orbital slots” for communications satellites, and over-crowding has become a problem in space. Recent studies commissioned by the National Aeronautics and Space Administration (Gamble et al., 1979 and Gabriszeski et al., 1979) concluded that demand for communications satellite circuits will increase many-fold between 1982 and the end of this century. This projected increase in demand is the result of the growing number of non-military uses for satellite activities such as weather and climate data collection and remote-sensing of the earth's resources. Another is simply the growing number of nations with interests and capabilities in advanced space technology. To illustrate, membership in the International Telecommunications Satellite Organization, (Intelsat), the organization responsible for coordinating global telephone and television relays, has grown from 14 nations in 1964 to 101 in 1980.

Changes in the number and size distribution of dairy farms in the Northeast have come rapidly in the years since World War II. The objective of this study was to examine some of the newer methods of forecasting changes in this size distribution and ascertain the gains, if any, associated with these methods. Different formulations using Markov processes were compared with simple trend analyses and various functional forms in making projections. During the twenty-year period between 1958 and 1977 the number of farms delivering milk to plants in New York State decreased from slightly more than 45,800 to 16,500, a net decrease of approximately 64 percent. Over the same twenty-year period, annual milk production fluctuated between 9.8 and 11.0 billion pounds with a peak in 1965 and a low point in 1973. During the last five years, 1975–79, the number of farms delivering milk has continued to decline but milk production the the State has increased yearly and is expected to reach an all-time high in 1980. Such structural changes in the dairy industry have stimulated continued interest in problems of milk supply response and future variations in the size distribution of farms.

Seasonal incentive plans, such as the base-excess plan, have been initiated to encourage producers to shift their production to be more similar to seasonal consumption patterns. The effectiveness of the seasonal incentive plan was evaluated by examining Maryland milk production data for the period 1966–78. The analysis indicated that month-to-month variation in milk production has increased in recent years, and suggests that current seasonal incentive plans be evaluated to encourage dairy producers to shift their production schedules.

In an update and extension of prior work this study found that the potato futures markets continued to provide very unreliable forecasts of subsequent spot prices. On the other hand and contrary to some past studies an extensive study here failed to turn up any convincing evidence of a cobweb pricing relationship. Moreover the increasing volatility of potato futures prices in the more recent time period raises questions regarding their value as hedging vehicles. Finally it is argued that the market's efficiency might be improved by expanding the current Maine potato contract to permit delivery of round white potatoes grown outside Maine.

In recent years there has been a noticeable trend toward a small number of large farms and declining output in the Connecticut, Massachusetts and New Hampshire egg industries. This is partly due to increases in the costs of feed grains and freight rates [Skinner]. A significant change in farm income and cost after 1973 is also observed by Hwang. The purpose of this paper is to examine the changes in the size distribution of egg farmers in this three-state region over time as a Markov process. Also, the occurrence of a marked structural change in the egg industry during the period 1967 to 1978 is statistically examined. We also seek answers to questions such as the following: how many years can different-size egg farms survive in the face of increasing feed and energy costs? What will be the size distribution of egg farms, total number of layers, and egg output in the next decade?