Start Date
October 2024
End Date
October 2024
Location
Beacom Hall Room 245
Submission Type
Abstract
Track
Agribusiness
Abstract
The relationship between farm and retail prices is critical in food supply chains. Marketing costs significantly influence both prices. Higher marketing costs reduce farm demand, lower farm prices, and increase retail prices, consequently lowering farm share of the food dollar. The USDA reports show a decline in the farm share from 18 cents in 2011 to 13.5 cents in 2021 due to rising marketing costs. This paper examines price transmission between farm and retail prices, focusing on the impact of marketing costs using historical data and the VECM. Preliminary results reveal a weaker long-term relationship during periods of higher marketing costs.
Included in
Impact of Increasing Marketing Costs on Farm-to-Retail Price Transmission
Beacom Hall Room 245
The relationship between farm and retail prices is critical in food supply chains. Marketing costs significantly influence both prices. Higher marketing costs reduce farm demand, lower farm prices, and increase retail prices, consequently lowering farm share of the food dollar. The USDA reports show a decline in the farm share from 18 cents in 2011 to 13.5 cents in 2021 due to rising marketing costs. This paper examines price transmission between farm and retail prices, focusing on the impact of marketing costs using historical data and the VECM. Preliminary results reveal a weaker long-term relationship during periods of higher marketing costs.
