International Journal of Agricultural Economics

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Organic Produce Retail Premiums Vary Across Regions and by Attributes

Received: 05 July 2022    Accepted: 25 July 2022    Published: 29 July 2022
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Abstract

Organic fruits and vegetables are becoming more popular due to the perceived benefits to consumers’ health and its potential environmental benefits, such as soil health and quality. Market expansion, however, does not necessarily imply higher profits. Organic premiums, the additional amount over conventionally grown produce, have varied across products, attributes, and over time. This study analyses retail premium of organic over conventional production using USDA’s Agricultural Marketing Service (AMS) data on specialty crops. Four important crops with large markets are studied here, namely apples, cucumber, strawberries, and tomatoes. Price premiums statistically differ by variety, seasons, regions, and unit of sale (or package). Cucumbers, on average, fetch high premiums in the mainland, for example. The heteroskedastic-consistent regression estimates reveal conditional average differences by various aspects. Regional differences play a large role. For example, apples and tomatoes fetch the highest premium in the Southwest region. Seasonal influences were not the same across products. Apples had lower premiums off-season, whereas strawberries generally had higher premiums during off-season. There is some evidence of second degree price discrimination in apples and strawberries. The upshot is that, in any region, organic producers could earn larger premium by choosing the right variety in the right season sold in the right package.

DOI 10.11648/j.ijae.20220704.14
Published in International Journal of Agricultural Economics (Volume 7, Issue 4, July 2022)
Page(s) 175-185
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Organic Premiums, Organic Retail, Regional Economics, Sustainability, Fruits and Vegetables Prices, Organic Market

References
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Author Information
  • Agribusiness Economics, Southern Illinois University, Carbondale, USA

  • University of Illinois Extension, Murphysboro, USA

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  • APA Style

    Jebaraj Asirvatham, Katie Bell. (2022). Organic Produce Retail Premiums Vary Across Regions and by Attributes. International Journal of Agricultural Economics, 7(4), 175-185. https://doi.org/10.11648/j.ijae.20220704.14

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    ACS Style

    Jebaraj Asirvatham; Katie Bell. Organic Produce Retail Premiums Vary Across Regions and by Attributes. Int. J. Agric. Econ. 2022, 7(4), 175-185. doi: 10.11648/j.ijae.20220704.14

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    AMA Style

    Jebaraj Asirvatham, Katie Bell. Organic Produce Retail Premiums Vary Across Regions and by Attributes. Int J Agric Econ. 2022;7(4):175-185. doi: 10.11648/j.ijae.20220704.14

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  • @article{10.11648/j.ijae.20220704.14,
      author = {Jebaraj Asirvatham and Katie Bell},
      title = {Organic Produce Retail Premiums Vary Across Regions and by Attributes},
      journal = {International Journal of Agricultural Economics},
      volume = {7},
      number = {4},
      pages = {175-185},
      doi = {10.11648/j.ijae.20220704.14},
      url = {https://doi.org/10.11648/j.ijae.20220704.14},
      eprint = {https://download.sciencepg.com/pdf/10.11648.j.ijae.20220704.14},
      abstract = {Organic fruits and vegetables are becoming more popular due to the perceived benefits to consumers’ health and its potential environmental benefits, such as soil health and quality. Market expansion, however, does not necessarily imply higher profits. Organic premiums, the additional amount over conventionally grown produce, have varied across products, attributes, and over time. This study analyses retail premium of organic over conventional production using USDA’s Agricultural Marketing Service (AMS) data on specialty crops. Four important crops with large markets are studied here, namely apples, cucumber, strawberries, and tomatoes. Price premiums statistically differ by variety, seasons, regions, and unit of sale (or package). Cucumbers, on average, fetch high premiums in the mainland, for example. The heteroskedastic-consistent regression estimates reveal conditional average differences by various aspects. Regional differences play a large role. For example, apples and tomatoes fetch the highest premium in the Southwest region. Seasonal influences were not the same across products. Apples had lower premiums off-season, whereas strawberries generally had higher premiums during off-season. There is some evidence of second degree price discrimination in apples and strawberries. The upshot is that, in any region, organic producers could earn larger premium by choosing the right variety in the right season sold in the right package.},
     year = {2022}
    }
    

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  • TY  - JOUR
    T1  - Organic Produce Retail Premiums Vary Across Regions and by Attributes
    AU  - Jebaraj Asirvatham
    AU  - Katie Bell
    Y1  - 2022/07/29
    PY  - 2022
    N1  - https://doi.org/10.11648/j.ijae.20220704.14
    DO  - 10.11648/j.ijae.20220704.14
    T2  - International Journal of Agricultural Economics
    JF  - International Journal of Agricultural Economics
    JO  - International Journal of Agricultural Economics
    SP  - 175
    EP  - 185
    PB  - Science Publishing Group
    SN  - 2575-3843
    UR  - https://doi.org/10.11648/j.ijae.20220704.14
    AB  - Organic fruits and vegetables are becoming more popular due to the perceived benefits to consumers’ health and its potential environmental benefits, such as soil health and quality. Market expansion, however, does not necessarily imply higher profits. Organic premiums, the additional amount over conventionally grown produce, have varied across products, attributes, and over time. This study analyses retail premium of organic over conventional production using USDA’s Agricultural Marketing Service (AMS) data on specialty crops. Four important crops with large markets are studied here, namely apples, cucumber, strawberries, and tomatoes. Price premiums statistically differ by variety, seasons, regions, and unit of sale (or package). Cucumbers, on average, fetch high premiums in the mainland, for example. The heteroskedastic-consistent regression estimates reveal conditional average differences by various aspects. Regional differences play a large role. For example, apples and tomatoes fetch the highest premium in the Southwest region. Seasonal influences were not the same across products. Apples had lower premiums off-season, whereas strawberries generally had higher premiums during off-season. There is some evidence of second degree price discrimination in apples and strawberries. The upshot is that, in any region, organic producers could earn larger premium by choosing the right variety in the right season sold in the right package.
    VL  - 7
    IS  - 4
    ER  - 

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