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Spatial Procurement of Farm Products and the Supply of Processed Foods: Application to the Tomato Processing Industry

Author

Listed:
  • Stephen Hamilton

    (California Polytechnic State University)

  • Scott Kjorlien

    (University of California)

  • Ethan Ligon

    (University of California)

  • Aric Shafran

    (California Polytechnic State University)

Abstract

Increased transportation and logistical costs in agricultural markets have affected the spatial allocation of production in the agricultural and food sectors of the economy. We develop a spatial model of farm product procurement by a food processor, which is designed to capture the effects of supply-chain disruptions on the spatial procurement of farm products in the processed food sector. We use detailed data on production and procurement from a large California tomato processor to estimate the key parameters of the model, which allow us to calculate the price elasticity of supply for California tomato paste production and describe how changes in energy prices and transportation costs for primary agricultural products affect the supply of processed food.

Suggested Citation

  • Stephen Hamilton & Scott Kjorlien & Ethan Ligon & Aric Shafran, 2024. "Spatial Procurement of Farm Products and the Supply of Processed Foods: Application to the Tomato Processing Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 64(1), pages 11-33, February.
    • Handle: RePEc:kap:revind:v:64:y:2024:i:1:d:10.1007_s11151-023-09939-5
    DOI: 10.1007/s11151-023-09939-5
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    Keywords

    Spatial procurement; Food processing; Agricultural supply; Processing tomatoes;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • L90 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - General
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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