Interregional competition in the frozen strawberry industry

Abstract

The frozen foods industry has expanded rapidly since World War II. This growth has been shared by the producers and processors of frozen strawberries. It has involved large investments for new processing facilities and extensive new production acreage in some regions. Continuing developments in this industry make the questions of extent of growth and location of new facilities of special interest. The problem is approached in this study in terms of traditional economic theory of competitive relationships among different producing regions. The empiric solution involves the development of approximations of regional demand and supply relationships and interregional transfer costs and—within the framework of a perfectly competitive market—the specification of optimum allocations of production among different producing regions. Ten producing regions, plus Mexico, are defined, and each mainland state, plus Washington, D.C., is identified as a consuming region. Optimum allocations are determined through use of an adaptation of the transportation problem of linear programming. To allow consideration of alternative conditions as to regional differentials in production technique, production and processing costs, level of consumption, and product price, nine different analytical models are considered.