The global economy has continued to experience lingering effects of the global financial crisis that began in 2007. Although attention was initially given to the liquidity crisis and survival of some the world’s largest corporations and institutions, the financial crisis is likely to have long-lasting implications for agribusiness. As the wor...ld slowly recovers from the crisis, another round of problems are emerging as governments and international institutions attempt to unwind the positions they took in an effort to prevent the global economic bubble from bursting. Perhaps the most problematic factor for businesses is access to capital in sufficient amounts and at affordable rates. Governments and institutions, particularly in the United States (U.S.) and the European Union, have increased their financial obligations as the result of activities taken to curtail the economic crisis. These financial obligations and the associated financial risks place pressure on financial markets and tend to restrain the availability of capital and increase the cost of capital for businesses. However, the U.S. agricultural credit market has not experienced problems to the same extent as general business (commercial and industrial) and real estate credit markets have. In general, U.S. farm businesses have a strong balance sheet, adequate repayment capacity, sufficient amount of assets to offer collateral for loans, and reasonable profits. Thus, U.S. farm businesses have had an ample supply of credit at relatively low interest rates.
We present an analysis of markets for fresh strawberries, blueberries, blackberries and raspberries in the United States during 2008–2011. We use weekly panel data covering supermarket purchases in 52 cities. The primary goal is to estimate demand elasticities for fresh berries and thereby provide a better understanding of consumer behaviour...in response to price changes and the nature of competition among these crops. We estimate fixed and random effects models for double log demand equations and a complete demand system, the Almost Ideal Demand System. The latter specification can be used to estimate demand relationships that conform to utility maximising behaviour. The elasticity estimates are very robust across the different specifications and estimation methods. This increases confidence in our findings and provides some assurance that choice of functional form or estimation method is not driving our results. We find that retail demands for all berry crops are in the elastic range and that the different berries are substitutes for one another. The demand for strawberries was the least elastic with an own price elasticity of –1.26 and blackberries were the most elastic with a demand elasticity of –1.88. Blackberry demand was also the most responsive to the prices of competing berry crops. The study provides clearer insight into markets for berries in the United States. In addition, it fills a gap in the present lack of up-to-date consumer demand elasticities for these crops and will be useful for growers, decision makers and consumers.
A case study of an organic food company in the Slovak Republic involved in producing and sourcing inputs, food processing and distribution is presented. The case is based on a June 2014 “live” case study prepared for students in International MBA in Agribusiness programs at the Slovak University of Agriculture in Nitra, Warsaw University of... Life Sciences and the National University of Life and Environmental Sciences of Ukraine, Kiev. The company was established in 2001 with the objective to bring organic food to health conscious consumers. The company grows organic spelt grain, wheat, rye, buckwheat, herbs and apples on its 156 ha and 400 ha of owned and rented farmland. The company further processes these crops into more than 40 finished products. Students are presented with company information and summaries of a company visit and discussions with management. Students perform PEST and SWOT analyses, identify a shortage of owned and leased land as a problem the company must address, conduct research and analysis, and recommend product specification contracts as a solution to the problem.
There has been a growing openness and importance in trade over time as indicated by an increasing ratio of trade to gross domestic product for the World. However, some recent movements have been more protectionist and less open to trade. The potential impacts of less trade are explored with the United States (US) taken as an example. Trade agre...ements have been important in increasing trade by the US, particularly for US agriculture which has had a trade surplus since 1959. Countries should benefit from trade according to economic theory. However, stances taken by the US administration during the first half of 2017 have resulted in the withdrawal of the US from the Trans-Partnership Agreement and an announced renegotiation of the North American Free Trade Agreement. With falling US farm income, the potential undoing of trade agreement benefits, and possible trade retaliations, US agriculture is concerned about any potential disruption in exports and losses from less trade. In addition, US consumers and importers of US agriculture should be concerned about a potential decrease in trade.
JEL Code: Q18
The Grojec region of Poland is an important region for apple production and accounts for 40 percent of domestic apple production. Apple growers from the region made an attempt to strengthen their competitive position through registering their apples as Protected Geographical Indication (PGI) products. The European Commission’s PGI allows food... producers to obtain market recognition and a premium price for their products. Although the Grojec Apple received PGI registration in 2011, little has been done to promote apples with the PGI label. Two important research questions are addressed: 1) Does the Polish market recognize Grojec Apple PGI, and 2) Does the market value Grojec Apple PGI? Logit and regression models are estimated using survey data collected during an International MBA in Agribusiness and Commerce study week in Warsaw. Only 22% of consumers recognize Grojec Apple PGI. Yet, 70% of consumers indicate they are willing to pay more for the product and their average willingness to pay (WTP) premium is 32%. Results indicate use of the PGI label may be effective in improving sales and profit margins for Grojec Apple producers and their affiliated cooperatives. Older consumers are more likely to indicate a WTP premium. Males, smaller households, and consumers less sensitive to apple price indicate a higher WTP premium. An advertising campaign promoting Grojec Apple PGI as a better product may be effective at increasing consumer likelihood to pay more and WTP premium. Although “Grojec” is already familiar to most consumers in central Poland as a region for apples, a Grojec Apple with PGI label would assure consumers they are purchasing apples from the Grojec region and the apples are high quality.
JEL Code: D12, Q13, Q18