SAES-422 Multistate Research Activity Accomplishments Report

Status: Approved

Basic Information

Participants

Adrian, John* - Alabama; Cook, Roberta* - California; Carmen, Hoy - California; Toensmeyer, Carl* - Delaware; Calvin, Linda - ERS; Fairchild, Gary - Florida; Taylor, Tim - Fl - Florida; Zimet, David - Florida; Wycocki, Al* - Florida; Epperson, James* - Georgia; Guenthner, Joe* - Idaho; Woods, Tim* - Kentucky; Hinson, Roger* - Louisiana; Criner, George - Maine; Cheng, Hsaing-tai* - Maine; Ricks, Donald* - Michigan; Bateman, Lanny* - Mississippi; Uva, Wen-Fei* - New York; Govindasamy, Ramu* - New Jersey; Brumfield, Robin - New Jersey; Estes, Edmond* - North Carolina; Schatzer, Joe* - Oklahoma; Brooker, John* - Tennessee; Eastwood, David - Tennessee; Morse, Steve* - Texas; Schotzko, Tom* - Washington; <p> * Voting Member

State reports were delivered, including updates from Don Hinman and Kevin Kesecker on USDA-AMS marketing order programs. Robert Shulstad was introduced as the new administrator advisor. Discussions about web site management for the committee and manageing reports were followed by updates on regional research work. The IFAFS project continues with TN, NC, GA, and KY. Opportunities for new programs were discussed, including AAEA free sessions, special issues with the FDRS, workshops, etc. Finally, project continuation was discussed, including the development of a plan for writing the proposal for 2002.

Accomplishments

Objective 1. To assess the evolution of Supply-Chain Management in the fruit and vegetable sector, identifying strategic organizational and marketing implications for firms and specific commodity subsectors.

Supply chain analysis was utilized to examine market organization and strategy development for a number of produce sectors. Apples, tart cherries, sweet corn, peaches, and blueberries were all examined extensively.

In order to help the Michigan apple industry to adjust to the changing customer and market needs and to respond appropriately by the industry‘s vertical supply chain, a series of market research studies on changing customer needs, preferences, etc. have been done. Similar work has been done in connection with the U.S. tart cherry industry. A report was written this year by Ricks (MI), Woods (KY) and Sterns (FL) which provides an integrated summary of highlights of the series of market research studies which of been done over a period of several recent years regarding the changing customers‘ needs and preferences for the apple industry. A study was done involving a survey of U.S. tart cherry exporters which included exploration of the industry‘s current supply chain performance, the changing needs of export customers, the competitiveness of the U.S. industry in relation to competing supplying countries (MI).

Work was completed on the collection of funds for another fruit tree survey in the state of Washington and the survey has been completed (WA). Work is now underway to project production of apples over the next several years. Evaluation of promotional efforts by the Washington apple industry is now complete. The econometric model used in that effort will now be used to estimate optimal crop size and promotional effort.

A survey was used to collect marketing channel information from New York sweet corn producers and processors (NY). Surveys of New York sweet corn retailers and wholesalers are planned in summer 2002.

Consumer focus group discussions were held to study consumer perceptions of fresh peaches, particularly examining the demand for premium locally grown (New York) "truly tree-ripened" peaches and test consumers‘ interest in purchase at various price points. A survey with supermarket produce buyers is planned for 2002.

An analysis of consumers opinion about frozen blueberries and the perceived differences in product was completed (ME), specifically examining the preferences for attributes between wild and cultivated blueberries. Additional work in the pear sector (WA) focused on fruit size issued throughout the supply chain. This included estimating the effects of grade and size on FOB price and the profitability prospects for reducing the size range of fruit shipped to the fresh market.

Supply chain survey work continued on special segments of the produce industry, including the green grocers (TN), disposal and composting for watermelons (ME), direct marketing (NY, NJ), cooperatives (NJ), and organic produce (NJ).

A study describing the market structure and evolving marketing practices of the US fresh fruit and vegetable sector was conducted (CA, FL, USDA). This study was initiated at the request of the United Fresh Fruit and Vegetable Association and six other produce organizations. Key commodities were selected to capture the diversity of the fresh produce sector. These included California/Arizona lettuce and bagged salads, California table grapes and oranges, Florida and California tomatoes, and Florida grapefruit. This study includes analysis of the state of development of supply chain management approaches, including contracts, the evolution of trade practices in general, including new fees and services requested by retailers, changes in marketing channels and buyer concentration, and the implications for firms.

Objective 2. To analyze the relative competitiveness of fruit and vegetable subsectors, either regionally, nationally, and/or globally, using new and established analytical paradigms which incorporate theories from business schools and other fields.

The research issues on competitiveness are broad. Current work by committee members represents on-going work in issues of trade, promotion, risk management, improved industry coordination, and regulation.

International and regional trade issues were the subject of a number of related research topics. A profile of southeastern agribusiness exporters was compiled (GA). The purpose of this study is to examine the characteristics of southeastern exporters and to develop a profile of successful southeastern exporters.

The Ag Trade Center at the University of Florida put on the first annual international Agricultural Trade and Policy Conference. This was held in Gainesville, FL on October 31 - November 2, 2001. The purpose of this conference was to disseminate information about the policy making process for developing new farm legislation and international trade agreements, all of which affect fruit and vegetable growers throughout the United States.

Researchers in Florida explored and evaluated the potential economic benefits of complimentary marketing of fresh citrus between northern and southern hemisphere countries in the Americas. In December 2001, they visited Argentina and met with citrus producers, fresh fruit packers/exporters and regulatory agencies.

Additional research on free trade agreements and cost competitiveness of regional produce sectors continues (FL, CA) as policies develop and regional sectors adjust to changing economic environments.

Commodity promotion programs continue to be used as a strategy to build regional competitiveness. A study was completed focusing on the impacts of advertising and promotion on the demand for Vidalia onions (GA). This study evaluates the promotion and advertising impacts on the demand for Vidalia onions and estimates return to promotion expenditures. Additional studies on promotional programs in apples (WA, MI) and tart cherries (MI) continue.

Risk management is another subject area receiving increased attention within produce sectors as a means for sustaining competitiveness. New insurance approaches, including catastrophe bonds for Southeastern fruit and vegetable crops (GA) and alternative, environmentally-friendly production systems (FL) were explored. Alternative pesticide programs for turnip greens were evaluated.(OK). A 3-year project conducted by John Haydu (FL) addressed the pre- and post-harvest benefits of CaptanTM and IprodioneTM usage and evaluated alternative chemical and post-harvest strategies for reducing their use. A research presentation was given at the Florida Strawberry Association‘s annual convention, and manuscript was also submitted to the journal, HortScience.

Risks in food safety were the subject of research studies in Florida and Kentucky. Richard Kilmer (FL) undertook a study of government regulations and consumer concern about pesticide residues in food. Tim Woods (KY) completed a grower study that evaluated perceived food safety risks associated with produce and various production practices.

Improved industry coordination relates supply chain management to industry competiveness. Research that helps with industry planning and coordination continues. This includes an analysis of the U. S. tart cherry industry‘s long-term acreage-production cycle and supply trends. An updated analysis was made of industry acreage and supply trends as they relate to the industry‘s long-term acreage- production cycle. Industry leaders devoted considerable efforts to the exploration of some type of an "economic safety net" program or a "conservation reserve" program of government payments for cherry and apple growers (MI).

Policies on farm labor have also heavily impacted the produce industry. Research efforts in this area include evaluating Federal H-2A legislation, which provides a mechanism to hire temporary non-immigrant foreign workers (FL).

Impacts

  1. The supply chain analysis provides important background to industry decisions regarding marketing orders and industry development initiatives and should help increase the efficiency of the distribution systems within the fruit and vegetable sectors.
  2. Results from a consumer survey asking for their perceptions and expectations at the green grocer outlet demonstrate the survey technique can be implemented easily by any green grocer.
  3. The study on market structure and emerging marketing practices showed that large buyers of all types represent a considerable share of total shipper sales, implying that shippers may have less power in negotiating with buyers over prices and requests for fees and services. Also, as retailers source from fewer suppliers, shippers will likely become more account-oriented in their marketing strategies, providing products and services tailored to the needs of specific large account.
  4. This research demonstrates that current concern focusing on the potential for slotting fees to enter the commodity side of the fresh produce industry is too narrow. In 1999, fees of all types averaged about 1-2 percent of sales for commodity shippers, but ranged from 1 to 8 percent for bagged salad shippers. Given low margins in the fresh produce shipping industry, these fees may be sufficient to determine whether a firm earns a profit or loses money over the course of a season.
  5. Supply chain analysis will be used in the current national policy debate on the impacts of retail consolidation on California fresh produce shippers. The FTC, Department of Justice, USDA, Congress and industry trade associations are considering the study results.
  6. Commodity promotion research provides valuable data for improved coordination and planning, allowing producer groups to better target spending.
  7. Vertical coordination is an economic response to managing food safety risks for mitigating the costs associated with uncertain pesticide residue levels. Survey results of Florida strawberry and tomato growers confirm a significant negative relationship between vertical integration and fungicide and insecticide residues in Florida strawberries, and insecticides in Florida tomatoes. However, fungicides in tomatoes had the opposite effect.
  8. The analysis of government programs helping with supply control in fruit sectors showed potential income gains to the industry as well as estimates of costs to the government with different approaches which might be used for some type of economic assistance payment program for growers.

Publications

Bhuyan, S., R. VanVranken, B. Henehan, R. Poorbaugh, B. Onyango, F. Hossain and R. Govindasamy. "An Analysis of the Performance of Fruit and Vegetable Cooperatives in the Northeast," New Jersey Agricultural Experiment Station, P-02804-1-01, September 2001, 40 pp.

Bodet, Laurent, Timothy Woods, and Matt Ernst, "The International Chestnut Marketing Situation", Department of Agricultural Economics Staff Paper No. 411, University of Kentucky, January, 2001

Cheng, H.T., "Consumer opinion about wild blueberries with implications for frozen wild blueberry marketing". Staff Paper: REP505, Dept. of Resource Economics and Policy, University of Maine, 2001

Cook, Roberta, "Changing Dynamics in Produce Marketing," Agricultural Outlook, no. AGO-279, U.S. Department of Agriculture, March 2001, pp. 10-15.

Cook, Roberta, "Emerging Trade Practices and Trends in Fruit and Vegetable Markets," Perishables Handling Quarterly 105:21-25, February 2001.

Cook, Roberta, "U.S. Fresh Fruit and Vegetable Marketing: Emerging Trade Practices, Trends and Issues", (co-coordinator with Linda Calvin, et al.), Agricultural Economic Rept, No. 795, Economic Research Service, U.S. Department of Agriculture, January 2001, 52 pp.

Degner, Robert, Kim Morgan, Chris deBodisco, and Lisa House. "Market Development Strategies For Fresh Sweet Based upon Consumer and Trade Surveys." Research report submitted to the Southern Supersweet Corn Council Industry. Report 01-1, Florida Ag Market Research Center, University of Florida, IFAS. 2001.

Govindasamy, R., J. Italia, M. DeCongelio, K. Anderson and B. Barbour. "Empirically Evaluating Consumer Characteristics and Satisfaction with Organic Produce," New Jersey Agricultural Experiment Station, P-02139-1-01, May 2001, 70 pp.

Li, Xueqing, Allen Wysocki, and Gary Fairchild. "Market Strategies for Florida Citrus in China." Teaching and Learning Paper No. 01-12, Food and Resource Economics Department, University of Florida, IFAS. 2001.

Morgan, Kim, Robert Muruli, Robert Degner and Allen Wysocki. "Publicly Funded Promotional Programs For Fruit and Vegetable Commodities: A National Survey of State Departments of Agriculture." Research Report submitted to the Florida State Horticultural Society. Paper No. 61, Florida Agricultural Market Research Center, University of Florida, IFAS. 2001.

Oger, Raphaelle, Timothy A. Woods, Pierre Jean-Albert, and Daniel Allen, "Food Safety in the U.S. Fruit and Vegetable Industry: Awareness and Management Practices of Producers in Kentucky", Staff Paper 423, Ag Economics Dept., University of Kentucky, December, 2001.

Pray, C. A. Courtmanche and R. Govindasamy. " The Importance of Intellectual Property Rights in the International Spread of Private Sector Agricultural Biotechnology," Report to the World Intellectual Property Organization, September 2001.

Rhea, Alice J., John R. Brooker, S. Darrell Mundy, David B. Eastwood, Carl E. Sams, An Economic Analysis of Sequential Cropping Systems in Greenhouses in Tennessee, Research Series 0Y-01, Department of Agricultural Economics, December, 2001.

Ricks, D., J. Sterns and T. Woods, "Customer Preferences for Michigan Apples: A Case Example Of A Market Research Program for A Commodity Industry", Department of Agricultural Economics, Michigan State University, Agricultural Economics Staff Paper No. 01-44, October, 2001. (This paper is also scheduled to be published in the Journal of Food Distribution Research.)

Ricks, D., and M. Woods, "The Michigan Sweet Cherry Industry: Economic Trends", Department of Agricultural Economics, Michigan State University, Agricultural Economics Staff Paper No. 01-54, June 2001

Ricks, D., and M. Woods, "Economic Analysis of Possible Government Assistance Programs for Tart Cherry Growers", Department of Agricultural Economics, Michigan State University, Agricultural Economics Staff Paper No. 01-19, July 2001.

Ricks, D., and M. Woods, "Economic Aspects of a Conservation Reserve Program for Orchard Crops Such As Tart Cherries", Department of Agricultural Economics, Michigan State University, Agricultural Economics Staff Paper No. 01-26, July 2001.

Uva, W.L. 2001, New York Economic Handbook 2001 - Chapter 10 Vegetables and Chapter 11 Ornamentals. E.B. 2000-16, Dept. of Applied Economics and Management, Cornell University, Ithaca, New York

VanSickle, John J. Critical Agricultural Issues in Negotiating a Free Trade Area of the Americas. Gainesville, FL: Univ of Florida Extension, EDIS FE 284 June,2001. 3 pg

VanSickle, John J. Estratagias de Mercado para Productores de Vegetales. Gainesville, Fl: University of Florida, EDIS FE 228 June, 2001. 6 pg

VanSickle, John J. Terrorist Attacks in New York City and Washington, D.C.: Implications for the Florida Vegetable Industry. Gainesville, FL: University of Florida, EDIS FE314 October, 2001. 3 pg
VanSickle, John J. Vegetables. Florida Food and Resource Economics FFRE-146 Outlook 2001

VanSickle, John J. Implications for the Florida Vegetable Industry. Florida Food & Resource Economics FFRE 148 Description: The Terrorist Attacks in New York City and Washington D.C.: Economic Implications for Florida, 2001

VanSickle, John J. Cuban Vegetable Industry. HortScience. 36/3 2001.:445 pg

VanSickle, John J. Policy and Trade Issues Critical to Florida Tomato Growers. 2001 Florida Tomato Institute PRO 518 September, 2001.

VanSickle, John J. Farm Bill - Past, Present and Future: Regional Perspectives on the Farm Bill. 1st International Agricultural Trade & Policy Conference October, 2001.

VanSickle, John J. Fresh Fruit and Vegetable Industry Positions on New Farm Legislation. College Station, Texas: Texas Agricultural Experiment Station, CNAS 2001-3 August, 2001.

VanSickle, John J., Evans, Edward. The Florida Tomato Committee‘s Education and Promotion Program: An Evaluation. Gainesville, Fl: University of Florida: University of Florida, Unnumbered December, 2001. 34 pg

VanSickle, John J. Cost Updates for Fresh Tomatoes Imported from Mexico. Gainesville, FL: University of Florida, 2001. 3 pg

VanSickle, John J. Statement of John J. VanSickle to the U.S. International Trade Commission on Trade Distorting Support in the EU. Gainesville, FL: University of Florida, April 2001. 2 pg

VanSickle, John J. Submitted Testimony Regarding the Free Trade Area of the Americas to Committee on Agriculture, U.S. House of Representatives. Gainesville, FL: University of Florida, May 2001. 4 pg

VanSickle, John J. The Impact of the Suspension on the U.S. Fresh Tomato Industry. Gaineville, FL: University of Florida, October, 2001. 6 pg


Books, Journals, Theses, Presented Papers, and Proceedings

Brooker, John R. and David B. Eastwood, "Green Grocers: A Viable Wholesale Outlet for Small-Volume Fruit and Vegetable Growers?," Journal of Food Distribution Research, February, 2001.

Cook, Roberta, "The U.S. Fresh Produce Industry: An Industry in Transition," Chapter 2 in Postharvest Technology of Horticultural Crops, Adel A. Kader (eds.), University of California Division of Agriculture and Natural Resources, Publication 3311, pp.5- 26, 2001.

Criner, George K., Thomas G. Allen, and Raymond J. Schatzer. "Compost economics: production and utilization in agriculture," chapter 11 in book Compost Utilization in Horticultural Cropping Systems, edited by Peter J. Stoffella and Brian A. Kahn, Lewis Publishers, Boca Raton. 2001. Pp: 241-260.

Govindasamy, R., and J. Italia. "Farmers‘ Markets: Consumer Trends, Preferences and Characteristics,", Journal of Extension, 2001.

Govindasamy, R., J. Italia and D. Thatch. "State Promotion of Rural Agriculture: The Case of the Jersey Fresh Marketing Program," Southwest Economic Review, 2001.

Govindasamy, R., J. Italia and A. Adelaja. "Predicting Willingness-to-pay for Integrated Pest Management Produce: A Logistic Approach," Agricultural and Resource Economics Review, 2001. accepted)

Gutman, Paula, Ron C. Mittelhammer, and Thomas Schotzko. "Effects of Size and Grade on D‘Anjou Prices and Returns An Updated Report" , Final report to the Pear Bureau. January, 2001

Scott D. Parrott, David B. Eastwood, and John R. Brooker. "Testing for Symmetry in Price Transmission: An Extension of the Shiller Lag Structure with an Application to Fresh Tomatoes", Journal of Agribusiness 19.1 (Spring 2001): 35-49.

Willett, Lois Schertz, "Dried Fruit Processing at Dole Dried Fruit and Nut Company", Review of Agricultural Economics, vol. 19, issue 1. (p. 193-197).2001.

Willett, Lois Schertz, "U.S. Kiwifruit Industry Model: Annual Supply and Monthly Demand." Journal of Agricultural and Applied Economics, volume 32. (p. 479-491) 2001.

Wirth, Ferdinand, "Analyzing effects of fruit thinning on crop value in apples and citrus", HortScience, volume 36. (p 157-161) 2001.
Woo,B.J., C.L. Huang, J.E. Epperson, and B.J. Cude, "Effects of a New WalMart Supercenter on Local Retail Food Prices", J.Food Distr. Res., 32(1). 2001


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