Food Marketing Chain Research Articles

Vertical price transmission in the Egyptian tomato sector after the Arab Spring

ABSTRACTThis study assesses price transmission along the Egyptian tomato food marketing chain in the period that followed the Arab Spring, which accentuated economic precariousness in Egypt. Static and time-varying copula methods are used for this purpose. Results suggest a positive link between producer, wholesaler and retailer tomato prices. Such positive dependence is characterized by asymmetries during extreme market events that lead price increases to be transferred more completely along the supply chain than price declines.

Econometric Analysis of Asymmetric Price Transmission Using Threshold Cointegration Approach: A Case Study of Morocco’s Apple Markets

The level of market integration between deficit and surplus markets is a key determinant of price stability and food security. Thus, market integration can be regarded as a way of assessing efficiency of agricultural markets. The current study intends to investigate the domestic market integration and explore the potential presence of asymmetric price adjustments between spatially separated markets. The paper employs threshold cointegration approach using monthly data of wholesale apples prices over the period from September 1993 to June 2017 in five major wholesale markets in Morocco. Study findings suggest that wholesale apples markets are significantly cointegrated, implying the presence of the long-run equilibrium relationships between the examined markets pairs. Considering the evidence as a whole, for five out of eight market pairings, the results reveal that the nature of price transmission exhibits significant asymmetric adjustments. Nonetheless, the empirical analysis does not always support the research hypothesis, stipulating that deficit market prices adjust more swiftly to price increases than to price decreases in surplus market because of the market power of intermediaries in the food marketing chain. Based on these results, the domestic market integration shows some signs of weakness, which may affect the progress of the sector. In this respect, further efforts should be made to enhance market performance so as to ensure an even balance between the production and marketing segment.

Volatility Spillovers in the Spanish Food Marketing Chain: The Case of Tomato

ABSTRACTThis research aims to assess volatility spillovers along the Spanish tomato marketing chain. A multivariate generalized autoregressive conditional heteroskedasticity (MGARCH) model is fit to weekly tomato prices at different levels of the marketing chain (producers, wholesalers and consumers). Empirical results suggest significant price transmission and volatility spillovers between different market levels. While causality links flow in all directions, volatility transmission is stronger from the consumer to the producer and wholesale prices rather than the other way around. Consumer price first and second moments are quite rigid, while producer and wholesale prices tend to suffer from higher instability.

Food scare crises and price volatility: The case of the BSE in Spain

Recent incidents of contaminated food products coupled with the widespread diffusion of news by mass media and the growing social concerns about food safety, have resulted in significant food market crises. One of the most highly publicized recent food scares involved Bovine Spongiform Encephalopathy (BSE). In our analysis, we evaluate the impacts from a BSE outbreak on the price volatility transmission along the Spanish food marketing chain by using a smooth transition conditional correlation (STCC) GARCH model. Our work is the first to assess price volatility responses to food scares. Results suggest that two distinct regimes involving different price volatility behavior can be distinguished, one characterized by turbulent markets and another where markets are calming down.

Explaining low farm‐gate prices in the Catalan wine sector

PurposeThe viticulture sector represents a conspicuous part of the Catalan agricultural and agro food sector. While wine production in Catalonia has been increasing markedly over the first half of the 2000s, prices that grape producers receive have steadily declined threatening their standard of living. This has raised social and political concerns and calls for a better understanding of its causes. This paper aims to comprehend the sources of such price crisis.Design/methodology/approachA Delphi survey is conducted during 2005 among a panel of 27 wine sector experts.FindingsThe results find that experts agree in considering wine surplus and imperfect price transmission as the main causes determining low farm‐gate prices in the Catalan wine sector.Originality/valueThe analysis aims at characterizing the food marketing chain for wine products in Catalonia by quantifying the trade flows occuring within this chain. This paper is the first attempt in Catalonia and Spain to quantify and characterize such flows.

Market power behaviour in the Danish food marketing chain

The paper presents and demonstrates an econometric approach to analysing food industry firms' market pricing behaviour within the framework of translog cost functions and based on firm-level accounts panel data. The study identifies effects that can be interpreted as firms' market power behaviour in output or input markets. The most robust indications of market power behaviour in output markets are found in the pork and poultry processing sectors, as well as for firms in the bakeries sector. On the other hand, the most robust market power behaviour indications regarding input markets are found for poultry processing. In general, the patterns with regard to market power behaviour seem to be more clearly identified in the processing sectors than in the distribution sectors.

Optimal provision of food quality attributes

The paper examines the incentives and mechanisms for provision of food quality attributes within the food marketing chain. A mathematical program is used to model two objective specifications: one maximising whole-chain profits and the other maximising profits at the single stage of the chain at which provision occurs. Scenarios presented include a range of technological conditions at different stages of the food chain and the allocation of retail price premia amongst stages. Indicative Danish food industry data are used. Results list provision outcomes, profitability and its distribution amongst chain participants, and LaGrangian multiplier values. The different forms of scope economies at different stages of the chain have important implications for provision: particularly in the single stage model. Shares of price premia have little impact on provision in the whole chain model, but are very influential in the single stage model. Commercial and policy applications of the research include its focus on within-chain compensation, and the identification of appropriate targets and levels for subsidies.

Branding behavior in the Danish food industry

Cross-sectional data from a survey of Danish firms are used to examine branding behavior in 2002 and its change between 1997 and 2002. Summary data from the survey are presented. Branding behavior is defined and relevant literature is reviewed. Based on hypotheses developed from this literature and supporting features of the Danish food marketing chain, six econometric models are specified. Specification accounts for dependent variables' characteristics (count and fractional data, and truncated samples). Missing values are replaced using Griliches' method (Griliches, 1986). Large firms are found to own and introduce the most brands, although few associations with the commodity sector are identified. Firms' use of retail brands is found to substitute for brand introduction in the long run and to increase with ownership by retail firms. Conclusions are drawn regarding the strategic stance of retailers in the Danish food system and its employment of retailers' own-label brands. [ECONLIT Classifications: Q120; Q130; L190]. © 2006 Wiley Periodicals, Inc. Agribusiness 22: 31–49, 2006.

Competition in the food marketing chain

Competition in the Australian food marketing chain is of continuing concern, but little evidence is available to guide policy debate. In a search for broad guidelines, the theoretical and empirical evidence is reviewed and the recent report of the Joint Select Committee on the Retailing Sector is examined. Then publicly available data on several food groups are used to test for evidence of persistent market power. The purchasing behaviour of the grains and oilseeds processing sector is found to warrant more detailed attention. A possible research agenda and a call for greater attention to data requirements complete the article.

Primary and secondary producers: Economic implications of contracts in the food marketing chain

In this paper a principal-agent model is used to examine the optimal contracting problem of a large processor situated in a geographically limited area. The model is an extension of Holthausen's result (1979). The model design considers various degrees of price-risk exposure for raw material and processed products, risk preferences and technology parameters. The optimal contract is endogenously determined and shown to be a function of technology parameters, factor prices, risk measures in the spot markets and risk preferences of the parties involved. Copyright 1995 by Oxford University Press.