The WAEES modeling system provides a support system for rigorous agricultural economic and environmental analysis. In analyses that involve a change from the status quo, such as a change in an agricultural policy or technology, scenario analysis often contrasts a “baseline” status quo situation with a “scenario” that reflects the change. The difference between the scenario and the baseline measures the economic and environmental impact of the change.
Biofuels
Since 2007, the largest single demand development affecting global agricultural has been the advent of biofuels. WAEES econometric models provided detailed econometric analysis of the biofuels sector capturing various country domestic mandates or targets, feedstock supplies, subsidies, and trade restrictions. Clients have a wide range of interests in biofuels analyses including the availability of feed stocks, technology changes, policy changes, impact on food prices, and global food demand analysis.
Policy/Trade
The WAEES agricultural econometric models are built with policy analysis in mind. Various government programs which substantively affect the performance of agriculture are directly captured within the global structure of the model. Domestic supports such as input subsidies, price supports, deficiency payments, whole farm payments, direct payments, etc. which are production distorting are included. Trade barriers such as import and export tariffs are also included. Policy analysis hinges on either changes in the parameters of existing policies or the introduction of new policies. Agribusiness, trade organizations, and policy makers often use policy analysis in their decision making process.
Technology
New technologies are continuously emerging in agriculture. These technologies often bring about significant changes in the productivity of agriculture bringing benefits to producers and consumers while reducing environmental impacts. The WAEES models are designed to evaluate the benefits of new and existing technologies through scenario analysis. The models can be utilized for futuristic scenarios for new technologies or to capture the benefits of existing technologies through historical scenario simulation. The results of the analysis provide information on the benefits of new technologies to agricultural producers, consumers, and technology suppliers.
Macroeconomic
As evidenced in recent history, macroeconomic conditions can be extremely volatile. Real income growth, exchange rates, inflation and population growth are critical factors in determining the demand for agricultural production and trade. Since 2007, biofuels have played an increasing role in agriculture tying a significant component of agricultural demand to crude oil prices. The WAEES models include specific assumptions regarding macroeconomic conditions. We can provide alternative scenarios of macroeconomic conditions specific to client assumptions or general guidelines.
Weather/Climate Change
Weather and climate are popular topics of interest with concerns over global warming and the potential climate changes. Our model is capable of analyzing the impacts on global agricultural supply, demand and prices given alternative yield scenarios based on climate change. In the past we have combined biophysical plant growth models along with regional soil characteristics and weather projections to emulate yield impacts of climate change and subsequent impacts on crop production, commodity prices, demand, and farm income.