Assessing the Supplier Role of Selected Fresh Produce Value Chains in the United States

Abstract

Selected Paper prepared for presentation at the Agricultural & Applied Economics Association's 2015 AAEA & WAEA Joint Annual Meeting, San Francisco, CA, July 26-28, 2015 Abstract: This paper examines the roles and potential market impacts of regional food hub development through consideration of the supplier roles in selected fresh produce value chains in the United States. In contrast to much of the literature, the effects of economies of scale was embedded in the model and annual production statistics are broken out into seasonal marketing segments to more accurately account for the highly variable geographic disposition of annual fresh produce production. The hub optimization problem was mathematically formulated as a mixed integer linear programming model with an objective to minimize the total costs associated with fresh produce assembly and hub operations. Our results suggest that scale economies have significant effect on the optimal solutions of hub numbers, locations and sizes. This paper provides a replicable empirical framework to conduct impact assessments for regional and local food systems.