Carolyn Dimitri

Contracts, Markets, and Prices: Organizing the Production and Use of Agricultural Commodities

Production and marketing contracts govern 36 percent of the value of U.S. agricultural production, up from 12 percent in 1969. Contracts are now the primary method of handling sales of many livestock commodities, including milk, hogs, and broilers, and of major crops such as sugar beets, fruit, and processing tomatoes. Use of contracts is closely related to farm size; farms with

Who's buying organic vegetables? Demographic characteristics of U.S. consumers

1 million or more in sales have nearly half their production under contract. For producers, contracting can reduce income risks of price and production variability, ensure market access, and provide higher returns for differentiated farm products. For processors and other buyers, vertical coordination through contracting is a way to ensure the flow of products and to obtain differentiated products, ensure traceability for health concerns, and guarantee certain methods of production. The traditional spot market-though it still governs nearly 60 percent of the value of agricultural production- has difficulty providing accurate price signals for products geared to new consumer demands (such as produce raised and certified as organic or identity-preserved crops modified for special attributes). We are likely to see a continuing shift to more explicit forms of vertical coordination, through contracts and processor ownership, as a means to ensure more consistent product quantity and quality.

Organic food consumers: what do we really know about them?

The organic food market is currently the fastest growing food sector in the United States, with growth rates in organic food sales averaging 17% per year between 1998 and 2006. The largest segment within the organic market is fresh produce, comprising 34% percent of retail sales in 2006. This analysis focuses on identifying the demographic characteristics of households buying organic vegetables (in total) along with prepackaged organic salads and organic carrots, by examining the factors that influence the probability that a consumer will buy organic vegetables, and which factors influence the household share of organic vegetables purchased. We use Nielsen Homescan data for the year 2004. Households with high levels of education are more likely to purchase organic vegetables, while the probability of purchasing organic vegetables is lower for African Americans and for older households.

Green marketing: are environmental and social objectives compatible with profit maximization?

Purpose – The organic trade literature in the USA makes strong claims about the relationship between income, ethnicity, and other factors and the likelihood of purchasing organic food products. However, previous economic research focusing on the socio‐economic characteristics of organic food consumers yields mixed findings. One explanation for the literatures inconsistent findings is that most studies rely on one specific product or one region of the country, or base their analysis on data collected from in‐store surveys. Another shortcoming in the existing literature is the failure to account for how access to organic food influences the likelihood of buying organic food. This papers goal is to identify what is known, as well as what is not known, about consumers of organic food.Design/methodology/approach – The paper extends the literature through the combination of a novel approach and unique dataset of US consumers, and addresses the relationship between demographic traits and the likelihood of buyi...

Urban agriculture: connecting producers with consumers

Along with others, we recognize the impact of human action on environmental quality. At the same time, we note that businesses have entered the ‘green market’. The goal of this paper is to open a discussion about green marketing. We raise questions regarding how firm governance impacts the ability of firms to incorporate environmental objectives into profit maximization. Additionally, we discuss the green marketing strategies that firms have chosen to use, as well as public and private options available for eco-label monitoring and enforcement to avoid additional consumer confusion.

Agriculture in urban and peri-urban areas in the United States: Highlights from the census of agriculture

Purpose – Urban farming is becoming more common in the USA, as food-based entrepreneurs seek to make money farming in the city. Yet many urban farms are concerned with other factors in addition to food production, and thus have incorporated social goals into their missions. The purpose of this paper is to identify the social missions of urban farms in the USA, their extent, and explores differences and similarities among farms with varying missions. Design/methodology/approach – The authors use primary data collected from a 2012 national survey of urban farmers in the USA. In total, 35 questions, covering the 2012 farm year, targeted production and marketing practices, risks and challenges, information and technical assistance needs, farm size and location, age of primary farmer, and farm characteristics. A multinomial logistic model was used to analyze the social missions of urban farms in the sample. Findings – The authors find that food production is an essential part of the mission for all urban farms...

Fueling the Automobile: An Economic Exploration of Early Adoption of Gasoline over Ethanol

Urban agriculture, a current trend in many US cities, is purported to bring enhanced food security, reduction of food waste, community building, open green space in cities and higher property values. However, the literature lacks an understanding of whether urban farming has extended beyond a compelling concept into the practice of farming in the city and peri-urban areas. The exact definition of an urban farm is challenging, since many urban farms have a primary mission of supporting social goals rather than providing food. Use of the USDA definition of farm omits many self-identified urban farms, but the most consistent measure of agriculture is the Census of Agriculture. Using census data, this paper finds that urban farms are smaller than the typical farm, and while the amount of urban and peri-urban farmland declined between 2002 and 2007, the total number of farms increased. Growth in farmland is positively related to land values, suggesting that increases in urban farmland are more likely to take place in population dense, land scarce areas. Spatial analysis of urban and peri-urban farms in the Northeast finds fewer clusters of farms in areas with high land costs. In the most populous Northeastern cities, the farms are more likely to be located in the peri-urban area than in the urban core. Urban farms in the Northeast were more likely to produce vegetables, eggs and goats. Significant levels of vegetable farm clusters were detected surrounding Providence, Boston and Hartford Metropolitan Statistical Areas, which are regions that had no significant level of clustering of total farms. Future analysis, incorporating data from the 2012 census, should provide insight into whether local policy changes have resulted in growth in urban farms and farmland.

Promoting resilience for food, energy, and water interdependencies

When the automobile was developed near the beginning of the last century, it was the relatively new fuel gasoline, not the familiar ethanol that became the fuel of choice. We examine the intersections of the early development of the automobile and the petroleum industry and consider the state of the agriculture sector during the same period. Through this process, we find a series of influences, such as relative prices and alternative markets, that help to explain how in the early years of automobile development, gasoline won out over the equally likely technical alternative ethanol. We also examine the industrial relations in the automobile industry that seem to have influenced the later adoption of leaded gasoline, rather than ethanol, as a solution to the problem of engine knock.

Examining U.S. Food Retailers’ Decisions to Procure Local and Organic Produce From Farmer Direct-to-Retail Supply Chains

This paper presents relationships among food, energy, and water (FEW) systems, reflecting the interconnections among the energy/water, water/energy, water/food, and energy/food sectors. First, a unique approach uses metrics and quantification to reflect interdependencies among these sectors. Next, changes in food technology and practices are put forth in terms of impacts changes are likely to produce for a set of FEW system relationships. Organic farming or shifts in food consumption patterns, such as reduced meat consumption, are two examples of changes in food technology and practices that could affect water and energy use. From a policy perspective, changes in energy and water policy can potentially facilitate increased water conservation and greater use of renewable energy sources; such policy shifts are addressed in terms of changes to metrics and/or their values. The purpose of this work is to establish a network model that quantifies interdependencies among different sectors in terms of resource usage. The model is flexible and can accommodate other factors such as cyberphysical and logical interdependencies. The established model that these metrics provide inputs for enables analysis and design of the resilience mechanisms for FEW complex systems. Examples are used to illustrate the concepts developed in this work.

The promises of farming in the city: Introduction to the urban agriculture themed issue

U.S. food retailing is a competitive sector that has undergone rapid changes. The U.S. market for organic products has expanded rapidly over the last decade, while local foods have become a more visible marketing strategy. Studies focusing on the marketing of these products by retailers are sparse and generally qualitative. This article is the first quantitative examination of the connection between the local and organic retailing. A sample selection model is used with data from a 2008 national survey of organic retailers to study supplier interactions and company characteristics that influence a retailer’s decision to procure local organic produce directly from farmers, and the rate at which they procure these products. The results show that the number of years a store has sold organic products and the size of the company, as well as aspects prioritized in choosing suppliers and past problems interacting with local suppliers, affect the outcomes.