Marketing Order Suspensions and Fresh Lemon Retail-FOB Margins

Timothy J. Richards, Albert Kagan, Pamela Mischen and Richard Adu-Asamoah

Journal of Agricultural and Applied Economics, 1996, vol. 28, issue 2, 263-277

Abstract: In August 1994, the Secretary of Agriculture announced the termination of the marketing order and the associated flow-to-market, or prorate, controls for fresh California and Arizona (CA/AZ) lemons. Lemon growers and handlers have expressed concern over the impact of this decision on retail-FOB margins. This study presents an econometric model of fresh lemon marketing margins that tests for the presence of buyer and seller market power during previous periods of marketing order suspension. The results show that buyer and, to a lesser extent, seller market power cause retail-FOB margins to widen during periods of prorate suspension.

Date: 1996
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