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Marketing Order Suspensions and Fresh Lemon Retail-FOB Margins

Published online by Cambridge University Press:  28 April 2015

Timothy J. Richards ,
Albert Kagan ,
Pamela Mischen  and
Richard Adu-Asamoah
Timothy J. Richards
Affiliation:
School of Agribusiness and Resource Management (SABR), Arizona State University
Albert Kagan
Affiliation:
School of Agribusiness and Resource Management (SABR), Arizona State University
Pamela Mischen
Affiliation:
National Food and Agricultural Policy Project (NFAPP), Arizona State University
Richard Adu-Asamoah
Affiliation:
SABR and NFAPP
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Abstract

In August 1994, the Secretary of Agriculture announced the termination of the marketing order and the associated flow-to-market, or prorate, controls for fresh California and Arizona (CA/AZ) lemons. Lemon growers and handlers have expressed concern over the impact of this decision on retail-FOB margins. This study presents an econometric model of fresh lemon marketing margins that tests for the presence of buyer and seller market power during previous periods of marketing order suspension. The results show that buyer and, to a lesser extent, seller market power cause retail-FOB margins to widen during periods of prorate suspension.

Keywords

conjectural variationslemonsmarketing ordermonopsony powerretail-FOB margins
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 28 , Issue 2 , December 1996 , pp. 263 - 277
Copyright
Copyright © Southern Agricultural Economics Association 1996

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