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A model of price determination for fresh produce with application to California iceberg lettuce

American journal of agricultural economics 78(4): 924-934
A model of price determination for fresh produce with application to California iceberg lettuce
Most fresh produce commodities are highly perishable. Thus, supply at any time is fixed at prices above marginal harvest costs. In this paper we develop a model of short-run farm price determination for produce commodities that incorporates this key structural feature and also allows for imperfect competition in price determination. The model is empirically manifest in a switching regression framework and applied to California iceberg lettuce. Results support the general model relative to a model restricted to competitive behavior and suggest that retailer/buyers capture most of the rents from lettuce production and sale.

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Accession: 002738661

DOI: 10.2307/1243849

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