Supply and Demand Factors for Organic Produce

9 Pages Posted: 24 Mar 2020

See all articles by Timothy A. Park

Timothy A. Park

Economic Research Service, USDA

Luanne Lohr

University of Georgia

Date Written: August 1996

Abstract

Although the organic produce industry is growing dramatically, little is known about market structure. We estimate a system of reduced‐form equations to evaluate supply and demand factors that influence equilibrium farm price and quantity in wholesale markets for organic broccoli, carrots, and lettuce. In the long run, demand factors dominate supply factors. Reduced wholesaling costs, increased margins by which organic wholesale price exceeds nonorganic price, and higher consumer income stimulate both farm price and output. Increasing the nonorganic farm price decreases equilibrium quantity of organics. Market expansion strategies should target consumers and wholesalers.

Keywords: elasticities, long‐run equilibrium, market structure, organic, vegetables, Q110

Suggested Citation

Park, Timothy A. and Lohr, Luanne, Supply and Demand Factors for Organic Produce (August 1996). American Journal of Agricultural Economics, Vol. 78, Issue 3, pp. 647-655, 1996, Available at SSRN: https://ssrn.com/abstract=3558990 or http://dx.doi.org/10.2307/1243282

Timothy A. Park (Contact Author)

Economic Research Service, USDA ( email )

Washington, DC 22207
United States
(202)694-5446 (Phone)

Luanne Lohr

University of Georgia ( email )

Athens, GA 30602-7509
United States
706-542-0847 (Phone)

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