Supply Response and Marketing Strategies for Deciduous Crops

Abstract

AbstractRecent surveys show large increases in Washington apple tree plantings. When these plantings come into production, prices received by growers are expected to be below production costs. A simulation model combining supply, demand, and random weather variables was used to compare future returns and production variables of present fresh‐processing allocation policies with alternative policies. The discriminating monopolist policies produced higher discounted revenues, more stable prices, and greater production and tree numbers during the 1972–1981 period than present policies. Thus, the monopolist short‐run increase in returns over the present policy was prevalent after accounting for supply response.