OPTIMALITY AND SEPARABLE LINEAR PROGRAMMING: AN ADDITIONAL REMINDER

The assumed global optimum solution obtained in linear programming is not an assumed characteristic of separable linear programming. Separable programming is non-linear programming and must possess certain sufficient conditions for a global optimum to be obtained. The global optimum conditions for separable programming are set forth.Research Methods/ Statistical Methods,

The Bargaining Strength of a Milk Marketing Cooperative

As a result of economies of size, food processors are generally large and few in number. These characteristics put processors at a bargaining advantage over independent farmers. Marketing cooperatives were established to counter the uneven bargaining position of individual farmers. This article investigates the relative bargaining strength of one milk marketing cooperative and several fluid milk processors. The Nash bargaining model can be used to analyze the negotiated price in the Florida fluid milk market which acts like a bilateral monopoly. The milk marketing cooperatives have bargained well with the milk marketing processors. The monthly bargaining strength of the Southeast Dairy Cooperative, Inc. (SDC), exceeds the monthly bargaining strength of the processors in all twelve months, ranging from a low of 0.6664 in January to a high of 0.7831 in September. The monthly average bargaining strength across all months for SDC is 0.7326.cooperative, bargaining, bilateral monopoly, dairy, processors, Agribusiness, Marketing,

A BARGAINING FRAMEWORK TO ESTABLISH OVER-ORDER PREMIUMS IN DAIRY MARKETS

Given the approximate bilateral monopoly nature of Florida dairy industry (producers and processors), the monthly projected over-order premiums (i.e., the dollar amount above the Class I price) are determined by the generalized Nash bargaining model through the relevant prices, costs, bargaining power, and risk attitudes. The implications of the results are discussed.Agribusiness,

Scheduling and Routing Milk from Farm to Processors by a Cooperative

A milk marketing cooperative (MMC) was created by Florida dairy farmers to link the primary supply of fluid milk with the derived demand of processors in the vertical market. For any given milk supply, the revenue or return to farmers per unit of milk is the average milk price received by the MMC minus the MMC’s transfer cost. An important task for the MMC is to operate the fluid milk hauling system that optimizes the MMC’s milk transfer cost (routing and scheduling cost) subject to farm and plant schedules. The objective of this study is to determine if it is economically feasible to implement a more efficient routing and scheduling of farm-to-plant milk collection by the MMC.cooperatives, margins, milk, routing, scheduling, Demand and Price Analysis, Productivity Analysis,

THE PRODUCTION THEORY APPROACH TO IMPORT DEMAND ANALYSIS: A COMPARISON OF THE ROTTERDAM MODEL AND THE DIFFERENTIAL PRODUCTION APPROACH

Results indicate that, when comparing the unconditional derived-demand elasticities to the unconditional consumer demand elasticities, significant differences emerge due to the differences in the first-stage estimation procedure between the differential production approach and the Rotterdam model. In comparing the consumer demand price/corss-price elasticities to the derived-demand price/cross-price elasticities, it is clear that use of the Rotterdam model when a production approach should be used can lead to overestimation, underestimation, and incorrect signs in deriving unconditional price effects.dairy, demand, imports, international, production, Rotterdam, trade, Demand and Price Analysis, D12, D24, F10, F14, Q17,

IMPACT OF SPATIAL PRICE DISCRIMINATION WITHIN FLORIDA DAIRY COOPERATIVES

The trend toward deregulation and the relatively high prices in the Florida milk market have increased competition for milk supplies between Florida dairy cooperatives (FDCs) and other cooperatives like Dairymen Incorporated and Southern Milk Sales. Because of the increased competition in the Florida markets, the FDCs may need to implement a discriminatory spatial pricing policy. The discriminatory pricing policy allows the FDCs to expand their membership by absorbing some of the transportation cost of producers in distant locations that would otherwise be independent producers or members of competing cooperatives. Spatial pricing policies are analyzed to determine the effects of discriminatory pricing on the blend price, average aggregate revenue of cooperative members, and total costs and quantity of milk imports. The results of this study show that a nondiscriminatory pricing policy maximizes the cooperative members' blend price and average aggregate revenue. However, if the FDCs were able to increase the price by $.50 as a result of using spatial price discrimination to gain market power, spatial price discrimination would maximize average revenue and blend price.Demand and Price Analysis,

The Japanese Market for Imported Fruit Juices

The objectives were to analyze the competitiveness of countries exporting fruit juices into Japan and simulate the effect of the negative Japanese population growth rate on fruit juice demand. The relative price version of the Rotterdam demand model was estimated for orange, grapefruit, other citrus, apple, pineapple and grape juices. Results indicate that most exporters can’t increase market share through price reductions. Product promotion and product differentiation is a more plausible option. The growth of fruit juice demand in Japan is expected to decrease over the period 2006 through 2020 for 11 of the 18 fruit juice/country combinations because of negative population growth rate.competitiveness, fruit juice, Japan, Rotterdam model, population decline, Agribusiness, Agricultural and Food Policy, International Development, Q1,

European Union Farm Policy for Citrus, Tomatoes, and Dairy

European Union (EU) consumers pay almost twice the competitive world price for many agricultural products. Agricultural subsidies accounted for almost half of the EU's total budget (US$ 40 billion on agriculture in 2000) although agriculture represented 1.7 percent of the EU's GDP and employs 4.3% of the EU's population. Domestic policies for citrus and tomatoes include export refunds, product withdraws from the market, intervention thresholds, and direct producer aid. Domestic policies for dairy include export refunds, intervention thresholds, aid for private storage, disposal aid, and milk quotas. The EU's intentions are to enhance agricultural competitiveness by setting product intervention as "a real safety net measure, allowing EU producers to respond to market signals while protecting them from extreme price fluctuations," and promoting market oriented, sustainable agriculture by finishing the transition from product support to producer support, by introducing a "decoupled system of payments per farm" which are not connected to production. The EU wishes to allow flexibility in production, but also guarantee income stability to producers. Within the last 10 years, the EU has reduced price supports and increased direct payments to tomato, dairy, and citrus farmers to compensate them for the reductions.Agricultural and Food Policy,

AN ANALYSIS OF MARKET STRUCTURE AND PRICING IN THE FLORIDA CELERY INDUSTRY

The pricing behavior of the Florida celery industry under the current federal marketing order was examined by analyzing the implied market structure of the industry using a model proposed by Appelbaum. Point estimates of the oligopoly power index suggest that some degree of price enhancement above that which would be characterized by a perfectly competitive market may have occurred. However, the bulk of statistical evidence suggests that the departure from marginal cost pricing implied by the industry's pricing behavior is not statistically significant.Demand and Price Analysis,