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

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  • Hamilton, Stephen
  • Kjorlien, Scott
  • Ligon, Ethan
  • Shafran, Aric

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.
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Suggested Citation

  • Hamilton, Stephen & Kjorlien, Scott & Ligon, Ethan & Shafran, Aric, 2024. "Spatial Procurement of Farm Products and the Supply of Processed Foods: Application to the Tomato Processing Industry," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt5m84n9bb, Department of Agricultural & Resource Economics, UC Berkeley.
    • Handle: RePEc:cdl:agrebk:qt5m84n9bb
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    Keywords

    Social and Behavioral Sciences;

    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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