Hoy F. Carman

Market Integration, Efficiency of Arbitrage, and Imperfect Competition: Methodology and Application to U.S. Celery

This paper develops and applies a methodology to test for efficiency of interregional commodity arbitrage. Application of the methodology requires only time-series data on prices for alternative cities, regions, countries, or product forms. Yet, the approach is capable of generating evidence on a number of market parameters including market integration, arbitrage efficiency, the magnitude of marketing margins, product substitutability, and competitiveness of markets. Estimation is based on a switching regression model with three regimes: efficient arbitrage, relative shortage, and relative glut. Results from application of the model to U.S. celery marketing indicated significant departures from efficient arbitrage for both California and Florida celery.

Price asymmetry and marketing margin behavior: An example for California-Arizona citrus

The formal relationship between price asymmetry and marketing margins is derived and illustrated with a weekly analysis of prices and margins for fresh lemons and Navel oranges in four retail markets. In the short-run, retail prices and margins for both products were more responsive to f.o.b. price increases than they were to decreases, except for lemons in the Atlanta and Dallas markets and Navel oranges in the Atlanta market. Over time, retail price and margin adjustments to f.o.b. price changes appear to be symmetric with respect to price increases and decreases.

An analysis of factors associated with weekly food store sales variation

Retail food sales tend to decrease systematically as the time since payday increases. While the pattern of weekly sales is similar from store-to-store, the percentage variation of sales from the first to the last week of the month is greater for stores with low income customers than for similar stores with higher income customers. Meat department sales demonstrate the greatest variability, produce department sales the least. Retail costs, both labor and overhead, appear to increase with increased sales variability. Weekly sales variation has possible implications for the location and ownership of supermarkets, the design of in-store sales experiments, and pricing practices.

A Trend Projection of High Fructose Corn Syrup Substitution for Sugar

High fructose corn syrup is a comparatively low-priced sugar substitute which is experiencing rapid demand growth. A simple logistical trend model suggests that both per capita and total U.S. sugar consumption will decrease for several years as high fructose corn syrup is adopted. The impact on domestic sugar producers under current policy is minimal with costs borne primarily by sugar-exporting countries. Food manufacturers can reduce production costs, and some of this may be passed to consumers in lower product prices. Per capita consumer savings, however, will be small. The impact on corn prices also will be small.

Commodity supply response to a producer‐financed advertising program: The california avocado industry

A simulation model of the California avocado industry is used to estimate the impact of a producerfunded generic advertising program on acreage and returns over time. Although returns from advertising can be quite favorable in the short-run, improved returns stimulate increased plantings and the resulting production will erode advertising returns over time. California avocado producers, after over 30 years of actively promoting their product, appear to have real returns per acre similar to those that would have occurred without advertising but advertising has become a built-in cost.

Orderly Marketing for Lemons: Who Benefits?

The orderly marketing goal of federal marketing orders may deal with price stability or uniform flow of product to market, a choice which can have important economic implications. This study examines the impact of four fresh lemon marketing strategies on returns at the producer, FOB, and retail levels, together with marketing margins and consumer surplus. Producers, as a group, and consumers should favor a constant price strategy. Some individual producers and middlemen, however, enjoyed higher returns with constant weekly sales. Explanations of the shift in lemon sales patterns which occurred during the 1970s is examined in light of these results.

Marketing California—Arizona lemons without marketing order shipment controls

The California-Arizona lemon industry, after a long history of using fresh market shipment controls, operated during 1985-1986 without using the weekly prorate provisions of its federal marketing order. This article compares the level and variability of weekly shipments and prices for the, 1985-1986 crop year with the previous nine years when fresh market prorates were used every week. Fresh market shipments increased during most of 1985-1986 and prices were below the level expected. Weekly shipments and prices were more variable during the year without prorate than during most of the preceding nine years.

Changing Federal Income Tax Rates and Optimum Farm Size

Substantial reductions in income tax rates occurring over the last decade increase optimum farm size and thus contribute to the current movement toward fewer and larger farm units in the United States.

Tax Loss Agricultural Investments after Tax Reform

Tax reform had differential effects on tax shelter investments in agriculture. Profits from breeding livestock were reduced, while the tax advantages of citrus and almond orchard establishment were terminated. Other orchard crops which offered tax shelter advantages before reform continue to be profitable.

Alternative Tax Treatment of Orchard Development Costs: Impacts on Producers, Middlemen, and Consumers

Present federal income tax laws allow current deduction of development costs for most orchard crops. An economic surplus framework is used to analyze the impact of cost capitalization on producers, middlemen, and consumers. Estimated net social returns per dollar of tax subsidy range from