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How Transport Costs Affect Fresh Fruit and Vegetable Prices

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  • Volpe, Richard
  • Leibtag, Ephraim S.
  • Roeger, Edward

Abstract

This report examines the ways that fuel prices are transmitted to wholesale produce prices via transportation costs. Specifically, it focuses on marketing costs for asparagus,cantaloupes, table grapes, oranges, bell peppers, and tomatoes. Results of the study indicate that transportation costs significantly increase the costs of marketing these produce items and therefore their wholesale price. The impact of fuel prices on produce prices depends on a number of factors, including the distance between wholesale markets and the source of the produce, the method of transportation, the importance and timing of imports, and commodity-specific factors such as perishability. Overall, as fuel prices rise, so do wholesale produce prices and the margins between farm and wholesale prices.

Suggested Citation

  • Volpe, Richard & Leibtag, Ephraim S. & Roeger, Edward, 2013. "How Transport Costs Affect Fresh Fruit and Vegetable Prices," Economic Research Report 161355, United States Department of Agriculture, Economic Research Service.
  • Handle: RePEc:ags:uersrr:161355
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    File URL: http://purl.umn.edu/161355
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    References listed on IDEAS

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    1. Abebayehu Tegene, 2009. "High and Volatile Commodity Prices: What Do They Mean for Food Prices and Consumers: Discussion," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(5), pages 1468-1469.
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    3. Raper, Kellie Curry & Thornsbury, Suzanne & Aguilar, Cristobal, 2009. "Regional Wholesale Price Relationships in the Presence of Counter-Seasonal Imports," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 41(01), pages 271-290, April.
    4. Christopher L. Gilbert, 2010. "How to Understand High Food Prices," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(2), pages 398-425.
    5. Raper, Kellie Curry & Thornsbury, Suzanne & Aguilar, Cristobal, 2009. "Regional Wholesale Price Relationships in the Presence of Counter-Seasonal Imports," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 41(01), April.
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    7. Goodwin, Harold L., Jr. & Fuller, Stephen W. & Capps, Oral, Jr. & Asgill, Oladimagi W., 1988. "Factors Affecting Fresh Potato Price In Selected Terminal Markets," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 13(02), December.
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    9. repec:aph:ajpbhl:10.2105/ajph.2008.151415_8 is not listed on IDEAS
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    Cited by:

    1. Etemadnia, Hamideh & Goetz, Stephan J. & Canning, Patrick & Tavallali, Mohammad Sadegh, 2015. "Optimal wholesale facilities location within the fruit and vegetables supply chain with bimodal transportation options: An LP-MIP heuristic approach," European Journal of Operational Research, Elsevier, vol. 244(2), pages 648-661.
    2. Letourneau, Deborah K. & Ando, Amy W. & Jedlicka, Julie A. & Narwani, Anita & Barbier, Edward, 2015. "Simple-but-sound methods for estimating the value of changes in biodiversity for biological pest control in agriculture," Ecological Economics, Elsevier, vol. 120(C), pages 215-225.

    More about this item

    Keywords

    price determination; transportation costs; wholesale price margins; fruits and vegetables; trade; Agribusiness; Crop Production/Industries; Demand and Price Analysis; Industrial Organization;

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