Abstract

High fresh potato price volatility, over-production of fresh potatoes and potato prices below the potato production costs led to a decision of a group of Idaho potato growers to organize the United Potato Growers of Idaho, a marketing cooperative. The potato supply management program was developed to stabilize the supply of fresh potatoes in Idaho in order to provide a fair level of returns to Idaho potato growers. Based on theoretical models and empirical findings presented in the paper, the effective implementation of this program was likely to contribute to an increase in the Lerner Index of market power of the Idaho potato industry from 0.4% in 2004 to 11.3% in 2005.

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