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The delayed surplus response for hops related to market dynamics

Author

Listed:
  • Douglas MacKinnon

    (Department of Agriculture Economics and Rural Development, Faculty of Agriculture and Life Sciences, University of Maribor, Maribor, Slovenia)

  • Martin Pavlovič

    (Department of Agriculture Economics and Rural Development, Faculty of Agriculture and Life Sciences, University of Maribor, Maribor, Slovenia
    Slovenian Institute of Hop Research and Brewing, Žalec, Slovenia
    General Secretary, International Hop Growers' Convention, Celje, Slovenia)

Abstract

The cyclical nature of hop market pricing has been recorded since the 16th century, but the effect had never previously been documented or quantified. Using Bayesian inference in an analysis of data regarding the US hop industry collected and published by the United States Department of Agriculture (USDA) it was possible to measure the change of inventory and acreage responsiveness to price during periods of free and markets regulated through the enforcement of intellectual property rights (IPR). The data demonstrated a delayed, reduced, or total lack of responsiveness in the change of direction of acreage and inventory in response to directional changes in season average price (SAP) during free market periods. This reaction was referred to as the delayed surplus response (DSR). The data also demonstrated the absence of the DSR during periods in which proprietary varieties reached greater than 50% of US acreage and production. Patented plant varieties offer a legal monopoly over that intellectual property (IP). The absence of the DSR during periods in which a majority of US acreage and production were proprietary indicated a strong degree of control over supply. By extension, the owners of proprietary varieties demonstrated the ability to influence price at desired levels.

Suggested Citation

  • Douglas MacKinnon & Martin Pavlovič, 2022. "The delayed surplus response for hops related to market dynamics," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 68(8), pages 293-298.
    • Handle: RePEc:caa:jnlage:v:68:y:2022:i:8:id:156-2022-agricecon
    DOI: 10.17221/156/2022-AGRICECON
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    References listed on IDEAS

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