A major portion of the quoted base price variation of green pea and sweet com contracts used by Wisconsin vegetable processors in 1968 is shown to be associated with variation in other provisions of the contracts. A net price for contracts is derived by adjusting quoted base prices for the effects of nonprice provisions. The adjustment process involves utilization of a dualstage estimating procedure which separately considers the effects on price of quantitative .and qualitative provisions. The relative stability of the adjusted price among contracts implies competitive raw product markets for these vegetable crops.
A regional model of U.S. milk supply response is specified and estimated. The results suggest that, while being very inelastic in the short run, milk supply tends to be elastic in the longer‐run. Also, the effects of milk price or feed price on milk production are found to vary across regions. This indicates that dairy pricing policy and feed grain policy do affect the regional evolution of U.S. dairy production.
The paper considers an industry transforming primary commodities (farm products) into processed commodities (food products). It focuses on the allocation of embedded characteristics (carbohydrate, protein, etc.) both across space and among commodities. The approach generates a spatial competitive market equilibrium of production, consumption, transformation, and trade for both primary and processed commodities, along with the spatial distribution of shadow prices for the product characteristics. The model provides a basis for analyzing the allocation and pricing of agricultural products, food products, and characteristics in spatial markets. The empirical usefulness of the model is illustrated in the context of regional resource allocation in the U.S. dairy sector.
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