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The Propensity to Excess Capacity in the Lettuce Subsector
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BibTeX
@MISC{Baires_thepropensity,
author = {Filadelfo Baires and Tom Clevenger},
title = {The Propensity to Excess Capacity in the Lettuce Subsector},
year = {}
}
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Abstract
Commercial lettuce, grown principally in the West, is produced continuously throughout the year but in different areas with growing periods of various lengths. These various growing periods are due to different seasonal climatological patterns among producing areas. Weekly lettuce shipments are generally dominated by a few growers or grower-shippers with large acreages. Shippers have control over 85 percent of all lettuce planted for some harvesting periods and 65 percent for others, through coordination arrangements with growers. Due to the perishable (non-storable) nature of lettuce, the amount harvested is the amount shipped to consumption centers. The lettuce subsector appears to behave in a coercive (predatory) manner. This conduct is evident in the long periods of relatively low prices and the short periods of high lettuce prices experienced in the subsector. Lettuce prices are characterized by wide intraseasonal variation largely because of an increasing overlap of harvest periods among producing areas, production expansion to new areas, and weather conditions. The outcomes are the short-run surpluses or deficits experienced by the subsector. This market instability in turn causes farmer and shipper income instability. The lack of adequate information about lettuce acreage planted each week contributes to additional uncertainty regarding the decision grow-ers and shippers make about lettuce acreage to be planted at a given time in a particular area. Inade-quate information on acres planted, compounded with the uncertainty of weather patterns, becomes a major problem in attempting to decrease the
Keyphrases
lettuce subsector excess capacity lettuce acreage different area high lettuce price coordination arrangement shipper income instability low price inade-quate information short-run surplus major problem long period harvesting period short period additional uncertainty particular area decision grow-ers turn cause farmer weather condition weather pattern consumption center large acreage various length market instability adequate information commercial lettuce weekly lettuce shipment production expansion different seasonal climatological pattern new area wide intraseasonal variation
