Trans-Pacific Partnership: Benefits to U.S. Agriculture

A document pertaining to the Trans-Pacific Partnership between the United States and several other countries. This agreement opens markets and will support expansion of U.S. food and agricultural exports, increase farm income, generate more rural economic activity, and promote job growth. Details particular exports and imports

Market power in tobacco: Measuring multiple markets

Traditional market power analyses of the U.S. cigarette manufacturing industry consider monopoly power exertion by manufacturers in selling cigarettes to consumers. Market characteristics combined with government policy make it plausible that manufacturers exert monopsony market power in procuring tobacco. We investigate this possibility in the U.S. and international tobacco markets by extending nonparametric tests to include simultaneously potential monopoly market power with potential monopsony market power in multiple input markets, allowing both Hicks-neutral and biased technical change. We use annual data from the cigarette manufacturing industry from 1977 to 1993. Results indicate substantial departures from competitive pricing in the procurement of domestic tobacco, supporting the postulate that cigarette manufacturers appropriate monopsony rents despite, and perhaps at times through, U.S. tobacco farm policy. Results are less clear with respect to monopsony market power exertion in imported leaf tobacco procurement by cigarette manufacturers. Finally, results indicate that monopoly market power exertion is relatively small and that, when the possibility of monopsony market power exertion is admitted, monopoly market power exertion is no longer problematic.[EconLit citations: L100, L660]. © 2007 Wiley Periodicals, Inc. Agribusiness 23: 35-55, 2007.

Potato demand in an increasingly organic marketplace

The authors investigate pricing and demand issues for four fresh potato categories (russet, red, white, and minor colored), organic fresh potatoes, and two processed potato categories (frozen|refrigerated and dehydrated) using a nonlinear generalized almost ideal demand system (GAIDS) that is closed under unit scaling (CUUS). The model used regionally aggregated at-home consumption data from 2000 to 2005. Estimated uncompensated own price elasticities for fresh potatoes were highly significant and ranged between −0.5 and −1.6. The study was designed to capture the effects of the aggregate organic market on the prices, expenditures, and demand for each potato category. Organic food market penetration elasticities suggest that specialty potatoes (organic and minor-colored) are particularly well positioned if demands for organic products continue to rise, red potatoes are not well positioned and evidence of the early warning signs of slippage in market share for white and russet potatoes may exist. Producers and promoters of conventional potato products should account for the increasingly important role of organic products in making decisions. As an auxiliary exercise, we also statistically sourced the variance of the organic potato price premium relative to the other four fresh potato prices. At the present time, the variability of the organic potato premium is not much affected by production costs or other supply-related factors: the premium variability was driven largely by demand, and demographic|seasonal factors. Producers should be cautious about shifting to organic potato production until lower cost practices emerge. [JEL Codes: D120, Q130, Q180]. © 2009 Wiley Periodicals, Inc.