Hostname: page-component-848d4c4894-xfwgj Total loading time: 0 Render date: 2024-06-29T04:27:53.963Z Has data issue: false hasContentIssue false
  • English
  • Français

Marketing Order Suspensions and Fresh Lemon Retail-FOB Margins

Published online by Cambridge University Press:  28 April 2015

Timothy J. Richards ,
Albert Kagan ,
Pamela Mischen  and
Richard Adu-Asamoah
Timothy J. Richards
Affiliation:
School of Agribusiness and Resource Management (SABR), Arizona State University
Albert Kagan
Affiliation:
School of Agribusiness and Resource Management (SABR), Arizona State University
Pamela Mischen
Affiliation:
National Food and Agricultural Policy Project (NFAPP), Arizona State University
Richard Adu-Asamoah
Affiliation:
SABR and NFAPP
Get access Rights & Permissions [Opens in a new window]

Abstract

In August 1994, the Secretary of Agriculture announced the termination of the marketing order and the associated flow-to-market, or prorate, controls for fresh California and Arizona (CA/AZ) lemons. Lemon growers and handlers have expressed concern over the impact of this decision on retail-FOB margins. This study presents an econometric model of fresh lemon marketing margins that tests for the presence of buyer and seller market power during previous periods of marketing order suspension. The results show that buyer and, to a lesser extent, seller market power cause retail-FOB margins to widen during periods of prorate suspension.

Keywords

conjectural variationslemonsmarketing ordermonopsony powerretail-FOB margins
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 28 , Issue 2 , December 1996 , pp. 263 - 277
Copyright
Copyright © Southern Agricultural Economics Association 1996

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Azzam, A., and Pagoulatos, E.. “Testing Oligopolistic and Oligopsonistic Behavior: An Application to the U.S. Meat Packing Industry.” J. Agr. Econ. 41(1990):362–70.CrossRefGoogle Scholar
Brester, G.W., and Musick, D.C.. “The Effect of Market Concentration on Lamb Marketing Margins.” J. Agr. and Appl. Econ. 27(1995):172–83.CrossRefGoogle Scholar
Carman, H. “Income Tax Reform and California Orchard Development.” West. J. Agr. Econ. 6(1981):165–80.Google Scholar
Carman, H.E., and Pick, D.H.. “Marketing California-Arizona Lemons Without Marketing Order Shipment Controls.” Agribusiness 4(1988):245–59.3.0.CO;2-Y>CrossRefGoogle Scholar
Carman, H.E., and Pick, D.H.. “Orderly Marketing for Lemons: Who Benefits?” Amer. J. Agr. Econ. 72(1990):346–57.CrossRefGoogle Scholar
Chang, C.C. “Asset Fixity, Non-Reversibilities, and Dynamic Structure of Production: A Micro-Application to Pennsylvania Dairy Farms.” Unpublished Ph.D. dissertation, Pennsylvania State University, 1987.Google Scholar
Durham, C.A., and Sexton, R.J.. “Oligopsony Potential in Agriculture: Residual Supply Estimation in California's Processing Tomato Market.” Amer. J. Agr. Econ. 74(1992):962–72.CrossRefGoogle Scholar
Greene, W.LIMDEP, Version 6.0: User's Manual and Reference Guide. Bellport NY: Econometric Software, Inc., 1992.Google Scholar
Hausman, J.A. “Specification Tests in Econometrics.” Econometrica 46(1978):1251–71.CrossRefGoogle Scholar
Heckman, J. “Dummy Endogenous Variables in a Simultaneous Equation System.” Econometrica 46(1978):931–51.CrossRefGoogle Scholar
Kennedy, P.A Guide to Econometrics. Cambridge MA: The MIT Press, 1985.Google Scholar
Kinney, W., Carman, H., Green, R., and O'Con-nell, J.. “An Analysis of Economic Adjustments in the California-Arizona Lemon Industry.” Rep. No. 337, Giannini Foundation of Agricultural Economics Research, University of California at Davis, 1987.Google Scholar
Lemon Administrative Committee. Annual Report of the Lemon Administrative Committee. Various years, 1984-93. On file, USD A/Agricultural Marketing Service, Washington DC.Google Scholar
Melnick, R., and Shalit, H.. “Estimating the Market for Tomatoes.” Amer. J. Agr. Econ. 67(1985):573–82.CrossRefGoogle Scholar
Pick, D.H., Karrenbrock, J., and Carman, H.F.. “Price Asymmetry and Marketing Margin Behavior: An Example for California-Arizona Citrus.” Agribusiness 6(1990):75–84.3.0.CO;2-P>CrossRefGoogle Scholar
Powers, N.J. “Effects of Marketing Order Prorate Suspensions on California-Arizona Navel Oranges.” Agribusiness 7(1991a):203–29.3.0.CO;2-3>CrossRefGoogle Scholar
Powers, N.J. “Evaluating Orange Growers’ Exercise of Market Power with Marketing Order Volume Control Regulations.” J. Agr. Econ. Res. 44(1993):33–42.Google Scholar
Powers, N.J. “Marketing Order Impacts on Farm-Retail Price Spreads.” Amer. J. Agr. Econ. 73(1991b):507–10.CrossRefGoogle Scholar
Powers, N.J., Zepp, G.A., and Hoff, F.L.. “Assessment of a Marketing Order Prorate Suspension: A Study of California-Arizona Navel Oranges.” Pub. No. AER-557, USDA/Economic Research Service, Washington DC, 1986.Google Scholar
Rogers, R.T., and Sexton, R.J.. “Assessing the Importance of Oligopsony Power in Agricultural Markets.” Amer. J. Agr. Econ. 76(1994):1143–50.CrossRefGoogle Scholar
Royer, J.S., and Bhuyan, S.. “Forward Integration by Farmer Cooperatives: Comparative Incentives and Impacts.” J. Cooperatives 10(1995):33–48.Google Scholar
Schroeter, J.R. “Estimating the Degree of Market Power in the Beef Packing Industry.” Rev. Econ. and Statis. 70(1988):158–62.CrossRefGoogle Scholar
Schroeter, J.R., and Azzam, A.. “Marketing Margins, Market Power, and Price Uncertainty.” Amer. J. Agr. Econ. 73(1991):990–99.CrossRefGoogle Scholar
Schroeter, J.R., and Azzam, A.. “Measuring Market Power in Multi-Product Oligopolies: The U.S. Meat Industry.” Appl. Econ. 22(1990):1365–76.CrossRefGoogle Scholar
Taylor, T.G., and Kilmer, R.L.. “An Analysis of Market Structure and Pricing in the Florida Celery Industry.” S. J. Agr. Econ. 20(1988):35–43.Google Scholar
Thompson, G.D., and Lyon, C.C.. “Marketing Order Impacts on Farm-Retail Price Spreads: The Suspension of Prorates on California-Arizona Navel Oranges.” Amer. J. Agr. Econ. 71(1989):647–60.CrossRefGoogle Scholar
Thor, P.K., and Jesse, E.V.. “Economic Effects of Terminating Federal Marketing Orders for California-Arizona Oranges.” Tech. Bull. No. 1664, USDA/Economic Research Service, Washington DC, 1981.Google Scholar
U.S. Department of Agriculture, Agricultural Marketing Service. Fresh Fruit and Vegetable Arrivals in Western Cities: By Commodities, States, and Months. USDA/AMS, Fruit and Vegetable Division, Market News Branch, Washington DC. Various issues, 1984-1993.Google Scholar
U.S. Department of Agriculture, Agricultural Marketing Service. Fruit and Vegetable Truck Rate and Cost Summary. USDA/AMS, Fruit and Vegetable Division, Market News Branch, Washington DC. Various issues, 1984-1993.Google Scholar
U.S. Department of Agriculture, Economic Research Service. Food Marketing Review, 1992— 93. Agr. Econ. Rep. No. 678, USDA/ERS, Washington DC, April 1994.Google Scholar
U.S. Department of Agriculture, Agricultural Marketing Service. Fruit and Tree Nuts: Situation and Outlook Yearbook. USDA/ERS, Commodity Economics Division, Washington DC. Various issues, 1984-1993.Google Scholar
U.S. Department of Labor, Bureau of Labor Statistics. Consumer Price Index Detailed Report. USDL/BLS, Washington DC. Various issues, 1984-1993.Google Scholar
Wann, J.J., and Sexton, R.J.. “Imperfect Competition in Multiproduct Food Industries with Application to Pear Processing.” Amer. J. Agr. Econ. 74(1992):980–90.CrossRefGoogle Scholar