IDEAS home Printed from https://ideas.repec.org/a/bpj/bjafio/v3y2005i1n6.html
   My bibliography  Save this article

Grocery Retailer Behavior in Perishable Fresh Produce Procurement

Author

Listed:
  • Sexton Richard J.

    (University of California-Davis)

  • Zhang Mingxia

    (California Independent System Operator)

  • Chalfant James A.

    (University of California-Davis)

Abstract

This study examines supermarket retailer behavior in the procurement of iceberg lettuce from California and Arizona, vine-ripe and mature-green tomatoes from California, and mature-green tomatoes from Florida. The analysis relies upon both a reduced-form specification of farm-retail price spreads and a structural model of procurement for a perishable commodity with inelastic supply. The evidence supports a conclusion that buyers have been able to exercise oligopsony power in procuring iceberg lettuce from grower-shippers in California and Arizona. The evidence regarding buyer market power is more mixed for fresh tomatoes. The apparent success of the Florida mature-green tomato industry in enforcing a price floor and capturing a significant share of the surplus in excess of the price floor demonstrates the potential benefits to producers from coordinated behavior.

Suggested Citation

  • Sexton Richard J. & Zhang Mingxia & Chalfant James A., 2005. "Grocery Retailer Behavior in Perishable Fresh Produce Procurement," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 3(1), pages 1-23, February.
    • Handle: RePEc:bpj:bjafio:v:3:y:2005:i:1:n:6
    DOI: 10.2202/1542-0485.1090
    as

    Download full text from publisher

    File URL: https://doi.org/10.2202/1542-0485.1090
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.2202/1542-0485.1090?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Paul W. Dobson & Michael Waterson & Stephen W. Davies, 2003. "The Patterns and Implications of Increasing Concentration in European Food Retailing," Journal of Agricultural Economics, Wiley Blackwell, vol. 54(1), pages 111-125, March.
    2. Richards, Timothy J. & Patterson, Paul M., 2003. "Competition in Fresh Produce Markets: An Empirical Analysis of Marketing Channel Performance," Contractor and Cooperator Reports 291973, United States Department of Agriculture, Economic Research Service.
    3. Gary D. Thompson & Charles C. Lyon, 1989. "Marketing Order Impacts on Farm-Retail Price Spreads: The Suspension of Prorates on California-Arizona Navel Oranges," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(3), pages 647-660.
    4. Connor, John M., 1999. "Evolving Research on Price Competition in the Grocery Retailing Industry: An Appraisal," Agricultural and Resource Economics Review, Cambridge University Press, vol. 28(2), pages 119-127, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hadj Djelloul, Mohammed & Requillart, Vincent & Simioni, Michel, 2008. "Imperfect competition in the fresh tomato industry," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6682, European Association of Agricultural Economists.
    2. Habtu T. Weldegebriel & Xiuqing Wang & Anthony J. Rayner, 2012. "Price transmission market power and industry technology: a note," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 4(3), pages 281-299, August.
    3. Li, Lan & Carman, Hoy F. & Sexton, Richard J., 2005. "Grocery Retailer Pricing Behavior for California Avocados with Implications for Industry Promotion Strategies," 2005 Annual meeting, July 24-27, Providence, RI 19498, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Kachel, Yael & Finkelsthain, Israel, 2009. "Antitrust Legislation and Cooperation in Fish Marketing," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, vol. 37(2), pages 1-23.
    5. Tadesse Kuma Worako, 2016. "Transactions Costs and Spatial Integration of Vegetable and Fruit Market in Ethiopia," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 24(01), April.
    6. Cotterill, Ronald W., 2006. "Antitrust analysis of supermarkets: global concerns playing out in local markets," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(01), pages 1-16, March.
    7. Johan F.M. Swinnen & Anneleen Vandeplas, 2010. "Market power and rents in global supply chains," Agricultural Economics, International Association of Agricultural Economists, vol. 41(s1), pages 109-120, November.
    8. Guci, Ledia & Brown, Mark G., 2007. "Changes in the Structure of the Florida Processed Orange Industry and Potential Impacts on Competition," Research papers 36811, Florida Department of Citrus.
    9. Alphonse Singbo & Alfons Oude Lansink & Grigorios Emvalomatis, 2014. "Estimating farmers’ productive and marketing inefficiency: an application to vegetable producers in Benin," Journal of Productivity Analysis, Springer, vol. 42(2), pages 157-169, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Li, Lan & Carman, Hoy F. & Sexton, Richard J., 2005. "Grocery Retailer Pricing Behavior for California Avocados with Implications for Industry Promotion Strategies," 2005 Annual meeting, July 24-27, Providence, RI 19498, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Xia, Tian & Sancewich, Brian, 2012. "Retail Markets and Buyer Power in Agricultural Procurements," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124929, Agricultural and Applied Economics Association.
    3. Li, Chenguang & Sexton, Richard J., 2009. "Impacts of Retailers’ Pricing Strategies for Produce Commodities on Farmer Welfare," 2009 Conference, August 16-22, 2009, Beijing, China 51720, International Association of Agricultural Economists.
    4. Connor, John M., 2003. "The Changing Structure Of Global Food Markets: Dimensions, Effects, And Policy Implications," Staff Papers 28675, Purdue University, Department of Agricultural Economics.
    5. repec:got:cegedp:66 is not listed on IDEAS
    6. Plastina, Alejandro S. & Giannakas, Konstantinos, 2007. "Market And Welfare Effects Of Mandatory Country-Of-Origin Labeling In The Us Specialty Crops Sector," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon 9735, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Elizabeth Hoffman & Gary D. Libecap, 1994. "Political Bargaining and Cartelization in the New Deal: Orange Marketing Orders," NBER Chapters, in: The Regulated Economy: A Historical Approach to Political Economy, pages 189-222, National Bureau of Economic Research, Inc.
    8. Shu‐Yu Huang & Richard J. Sexton & Tian Xia, 2006. "Analysis of a supply‐control program under uncertainty and imperfect competition: Chinese cabbage in Taiwan," Agricultural Economics, International Association of Agricultural Economists, vol. 34(1), pages 69-80, January.
    9. Bakucs, Lajos Zoltan & Ferto, Imre & Hockmann, Heinrich & Perekhozhuk, Oleksandr, 2009. "Market power on the edge? An analysis of the German and Hungarian hog markets," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 58(08), pages 1-9, November.
    10. McAleer, Michael, 1995. "The significance of testing empirical non-nested models," Journal of Econometrics, Elsevier, vol. 67(1), pages 149-171, May.
    11. Bonnet, Céline & Bouamra-Mechemache, Zohra, 2020. "Empirical methodology for the evaluation of collusive behaviour in vertically-related markets: An application to the “yogurt cartel” in France," International Review of Law and Economics, Elsevier, vol. 61(C).
    12. Farhana Arefeen Mila & Ashrafun Nahar & Md Emran Hossain & Md Ruhul Amin, 2023. "Spatial price transmission in the onion markets of Bangladesh: An application of NARDL approach," PLOS ONE, Public Library of Science, vol. 18(4), pages 1-19, April.
    13. Gorton, Matthew & Torok, Aron & Tregear, Angela, 2014. "The Impact of EU Agri-food Quality Policy in the New Member States: A Case Study of the Makó Onion PDO," 142nd Seminar, May 29-30, 2014, Budapest, Hungary 169085, European Association of Agricultural Economists.
    14. Sascha A. Weber & Sven M. Anders, 2007. "Price rigidity and market power in German retailing," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(7), pages 737-749.
    15. Xia, Tian & Li, Xianghong, 2009. "Asymmetric Price Transmission and Demand Characteristics," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49400, Agricultural and Applied Economics Association.
    16. Véronique Courboin-Thenail, 2003. "Compte rendu d'ouvrage - Buyer power and competition in European food retrailing," Cahiers d'Economie et Sociologie Rurales, INRA Department of Economics, vol. 68, pages 167-169.
    17. Davis, David E., 2009. "Price and promotion effects of supermarket mergers," SDSU Working Papers in Progress 12009, South Dakota State University, Department of Economics, revised Jun 2010.
    18. Julia Bronnmann & Frank Asche, 2016. "The Value of Product Attributes, Brands and Private Labels: An Analysis of Frozen Seafood in Germany," Journal of Agricultural Economics, Wiley Blackwell, vol. 67(1), pages 231-244, February.
    19. John M. Crespi & Adriana Chacón-Cascante, 2004. "Do U.S. marketing orders have much market power? An examination of the Almond Board of California," Agribusiness, John Wiley & Sons, Ltd., vol. 20(1), pages 1-15.
    20. Hansmire, Michelle R. & Willett, Lois Schertz, 1993. "Price Transmission Processes: A Study of Price Lags and Asymmetric Price Response Behavior for New York Red Delicious and McIntosh Apples," Research Bulletins 123011, Cornell University, Department of Applied Economics and Management.
    21. Konstantakis, Konstantinos N. & Michaelides, Panayotis G., 2017. "Technology and Business Cycles: A Schumpeterian Investigation for the USA," MPRA Paper 80636, University Library of Munich, Germany.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:bjafio:v:3:y:2005:i:1:n:6. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyterbrill.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.