Do Changes in Orchard Supply Occur at the Intensive or Extensive Margin of the Landowner?

In this paper we seek to improve understanding of the dynamics of perennial crop supply by comparing acreage change on land owned by incumbents compared to landown ers entering or exiting perennial crop production. Spatially explicit land cover and land ownership data is integrated at the field level which provides a novel data set for analyzing supply changes at the level of the landowner. We contend that, in contrast to annual crops where operators drive crop choice, the landowner is the primary decision maker when de termining whether to plant orchards or vineyards due to associated establishment costs and the long investment time horizon. This motivates viewing the landowner as the firm within the context of the existing literature on firm entry and exit, which has primarily focused on manufacturing. Results from our analysis generally agree with findings from the existing literature on manufacturing. This provides a foundation for future research that incorporates related theory that posits causal relationships and connects entry and exit at the firm level with market level dynamics.