Department of Agricultural, Food, and Resource Economics Elton R. Smith Endowment

This is an active area of ERS Chair's research. Federal and other grants -listed at end- to the teams that I am involved in, have supported many of these efforts. The supported research teams are most grateful for the support. There have been two basic themes in the work, one minor and one major.

The minor theme has been mainly concerned with how market conditions affected the rental value of land, as in

• Hennessy, D.A. "The Ricardian Rent and the Allocation of Land Under Uncertainty: Comment.” European Review of Agricultural Economics, 24 (2 1997):313-317. Link
• Du, X., and D.A. Hennessy. “Planting Real Option in Cash Rent Valuation.” Applied Economics, 44(6, 2012):765-776. Link

Some  of this research in land rent arose in response to the run-up in land price and rental values commencing around about 2006.

• Du, X., D.A. Hennessy, and W.M. Edwards. "Does a Rising Biofuels Tide Raise All Boats? A Study of Cash Rent Determinants for Iowa Farmland under Hay and Pasture." Journal of Agricultural and Food Industrial Organization, 6(2008). Article 7 of Special Issue in Memory of Bruce Gardner. Link
• Du, Xiaodong, D.A. Hennessy, and W.M. Edwards. “Determinants of Iowa Cropland Cash Rental Rates: Testing Ricardian Rent Theory.” Center for Agricultural and Rural Development, Iowa State University, Working paper 07-WP 454, October 2007. Link

Land asset markets differ markedly from, and are more complicated than rental markets and I have not been involved in studying these markets.

The major theme under this heading has been the use patterns for privately owned lands in the Western Cornbelt and Northern Great Plains, including measuring land use, factors determining land use and policies to manage land use. In 2010 I received some funding to consider how crop insurance might affect land use choice in the Northern Great Plains, with emphasis on environmental policy design. Crop insurance I knew about, but not environmental policy as it applied to land use. So to cover all grant matter dimensions I commenced working with Hongli Feng, an environmental economist. We have since collaborated with many other economists, landscape ecologists, agronomists and climatologists on related projects. No single factor has determined land use in the area, though commodity prices loom large while technology, income support policy, infrastructure are also important while weather/climate may become a factor. More recently attention has moved to public-private instruments to incentivize grass cover, including easements, and also grassland pasture management strategies. To date, project outputs from this line of work include:

Peer Review Publications.

• Feng, H., D.A. Hennessy, and R. Miao. “The Effects of Government Payments on Cropland Acreage, CRP Enrollment, and Grassland Conversion in the Dakotas.” American Journal of Agricultural Economics 95(2, 2013):412–418. Link
• Miao, R., D.A. Hennessy, and H. Feng. “Sodbusting, Crop Insurance and Sunk Conversion Costs.” Land Economics, 90(4, 2014):601-622. Link
• Miao, R., H. Feng, D.A. Hennessy, and X. Du. “Assessing Cost-effectiveness of the Conservation Reserve Program (CRP) and Interactions between CRP and Crop Insurance.” Land Economics, 92(4, 2016):593-617. Link
• Arora, G., P.T. Wolter, D.A. Hennessy, and H. Feng. “Land Use Change and Policy in Iowa’s Loess Hills.” Sustainable Agriculture Research, 5(4, 2016):30-45. Link
• Miao, R., D.A. Hennessy, and H. Feng. “The Effects of Crop Insurance and Sodsaver on Land Use Change.” Journal of Agricultural and Resource Economics, 41(2, 2016):247-265. Link
• Wimberly, M.C., L. Janssen, D.A. Hennessy, M. Luri, N. Chowdhury, and H. Feng. “Agricultural Land Use Change and Grassland Loss in the Eastern Dakotas: A Farm-Level Analysis.” Land Use Policy, 63(April, 2017):160-173. Link
• Wang, T., M. Luri, L. Janssen, D.A. Hennessy, H. Feng, M. Wimberly, and G. Arora. “Determinants of Motives for Land Use Decisions at the Margins of the Corn Belt.” Ecological Economics, 134(April, 2017):227-237. Link
• Du, Xiaodong, D.A. Hennessy, Hongli Feng, and Gaurav Arora. “Land Resilience and Tail Dependence Among Crop Yield Distributions.” Forthcoming at American Journal of Agricultural Economics. Link

Papers Published in Proceedings (* indicates presenter).

• Arora, G., Wolter, P.T., Feng, H., and D.A. Hennessy. “Characterizing Dakotas’ Land Use Changes using Historical Satellite Sensor Data: 1984-2014.” Pages 9-11 in (L. Knuffman, ed.) Proceedings of the 3rd Biennial Conference on the Conservation of America’s Grasslands, Fort Collins, CO, Sept. 29-Oct. 1, 2015. Published July 2016.
• Arora, G., Wolter, P.T., Hennessy, D.A., and H. Feng. “Role of ethanol plants in Dakotas’ land use change: Analysis using remotely sensed data.” Pages 111-113 in (L. Knuffman, ed.) Proceedings of the 3rd Biennial Conference on the Conservation of America’s Grasslands, Fort Collins, CO, Sept. 29-Oct. 1, 2015. Published July 2016.
• Janssen, L., Luri, M., Chowdhury, N., Feng, H.i, and D.A. Hennessy. “Farmland use in the Dakotas, 2015 survey and analysis.” Pages 12-15 in (L. Knuffman, ed.) Proceedings of the 3rd Biennial Conference on the Conservation of America’s Grasslands, Fort Collins, CO, Sept. 29-Oct. 1, 2015. Published July 2016.
• Miao, R., Hennessy, D.A., and H. Feng*. “Risk Management Subsidies, Production System Switching Costs, and Native Grassland Conversion.” Proceedings of the 2nd Biennial Conference on the Conservation of America’s Grasslands, Manhattan, KS, August 13-14, 2013, pp. 25-26. Link

Externally Prepared Outreach Documents.

• Hennessy, D.A., Feng, H., Wimberly, M., Wang, T., Akyüz, A., Wolter, P., and L. Janssen. “The Farmer and the Rancher.” An explanation of motivation for research program on land use change in the Northern Great Plains. Prepared in August 2017 by Scientia Global. Link

Poster Presentations.

• Doidge, M., H. Feng, and D.A. Hennessy. “Farmers’ Revenue Condition Predictions: Evidence of the Gambler’s Fallacy?” Presented at 2017 Southern Ontario Behavioural Decision Research Conference, Queen’s University, Kingston, Ontario, May 12.
• Doidge, M., D.A. Hennessy, and H. Feng. “Motive for grassland maintenance and conversion choices.” Selected poster presented at AAEA Annual Meeting, Chicago, IL, July 30-Aug. 1, 2017
• Luri*, M., L. Janssen, D.A. Hennessy, and H. Feng. “Farmland Use Decisions and Grassland Conversion in the Dakotas: 2015 Survey and Analysis.” Selected poster presented at AAEA Annual Meeting, Chicago, IL, July 30-Aug. 1, 2017
• Arora, G., H. Feng, D.A. Hennessy*, and P. T. Wolter. “Land Use and Climate Change in the Dakotas.” Presented at 2015 Open Science Conference, Fort Collins, CO, May 20-22, 2015.
• Arora*, G., H. Feng, D.A. Hennessy, and P. T. Wolter. “Land Use and Climate Change in the Dakotas.” Presented at 2015 NIFA Climate Change Project Directors Meeting, Washington, DC, April 7-9, 2015.
• Arora*, G., H. Feng, and D.A. Hennessy. “Role of Ethanol Plants in Dakotas Land Use Change.” Heartland Environmental & Resource Economics Workshop poster presentation, Urbana-Champaign, IL, November 1-2, 2014.
• Hennessy, D.A. Project initiation poster for “Adaptation of agroecosystems to climate change at the edge of the U.S. Cornbelt―assessing different drivers in a network of infrastructure.” Presented at NIFA Climate Change Project Directors Meeting, Gainesville, FL, January 6-9, 2014.

Technical Publications (not peer reviewed).

• Arora, G., P.T. Wolter, H. Feng, and D.A. Hennessy. “Role of Ethanol Plants in Dakotas Land Use Change: Incorporating Flexible Trends in the Difference-in-Difference Framework with Remotely-Sensed Data.” Center for Agricultural and Rural Development, Iowa State University, Working paper 16-WP 564, March 2016.
• Miao, R., H. Feng, and D.A. Hennessy. “How much can the Sodsaver Provision in the 2014 Farm Bill save sod? It depends on crop prices.” Policy Matters, University of Illinois, January 19, 2017. Link
• Miao, R., H. Feng, D.A. Hennessy, and X. Du. “Linkage between Federal Crop Insurance Program and the Conservation Reserve Program: Implications for Budgetary Outlays and Environmental Efficiency.” Policy Matters, University of Illinois, November 14, 2016. Link
• Wang, T., Feng, H., and D.A. Hennessy. “Rotational Grazing and Land Use Conversion.” iGrow South Dakota State University Extension Bulletin, July 2016.
• Janssen, L., Luri, M., Chowdhury, N., Feng, H., and D.A. Hennessy. “Farmland use in the Dakotas: Key Results from the 2015 Producer Survey.” Economics Commentator, South Dakota State University, No. 557 (November 20), 2015.
• Arora, G., P.T. Wolter, H. Feng, and D.A. Hennessy. “Characterizing and Comprehending Land Use Change in the Loess Hills Region.” Agricultural Policy Review, Spring 2015. Link
• Hennessy, D.A., Anderson, C.J., Feng, H., Wolter, P.T. “Understanding dynamics of land use switching with satellite and field level data in context of climate variability.” North Central Climate Science Center, U.S. Geological Survey 2015, $292,008 requested, 2015-2017.
• Arora, G., P. T. Wolter, H. Feng, and D.A. Hennessy. “Characterizing and Comprehending Land Use Change in the Loess Hills Region.” Agricultural Policy Review, Spring 2015. Link

Pertinent Grants.

• Hennessy, D.A. “Federal Insurance Payments and Land Conversion: Impacts Estimation and Alternative Policy Design.” Ducks Unlimited, $124,288, June 2010 to December 2012.
• Wolter, P.T., Feng, H., Hennessy, D.A. “Characterizing and Comprehending Land Use Change in the Loess Hills Region.” Grant obtained from Center for Agriculture and Rural Development, $24,972, 2013-2014.
• Hennessy, D.A., Feng, H., Janssen, L., Akyüz, A., Du, X., Wimberly, M., Wolter, P. “Adaptation of agroecosystems to climate change at the edge of the U.S. Cornbelt—assessing different drivers in a spatially explicit network of infrastructure.” Agriculture and Food Research Initiative Competitive Grants Program, Agriculture and Natural Resources Science for Climate Variability and Change, $550,000, February 2014- January 2017.
• Wang, T., H. Feng, D.A. Hennessy, Srinivasulu Ale, Jongyoon Park. “Saving grassland of the Great Plains: Is management intensive grazing (MIG) a socioeconomically viable option?” USDA NIFA, $219,202 to Michigan State University, March 2017- Feb. 2020.