An analysis of market margins for Idaho fresh potatoes

摘要

The marketing margin (or farm-retail price spread) is defined as the difference between the prices paid by consumers and prices received by producers for a commodity (Tomek and Robinson, 1990). The farm-retail price spread of a commodity is important to both producers and consumers of the product. In 1994, consumers paid about 80.7 cents per pound for Idaho fresh potatoes, of which 77.2 cents went to market intermediaries and only 3.5 cents was actually received by Idaho potato producers (USDA). That is, only about 4.3 percent of the receipts went to Idaho potato farmers, the remaining 95.7 percent went to intermediaries in the form of market margin. This leads to the question: what accounts for the high market margins? Certainly the costs of getting the fresh potatoes to the retail market are reflected in the marketing margin, costs which may include transportation, storage, marketing, and packaging. But how much of the market margin is put towards these costs and how much is pure profit to intermediaries? The underlying theory of the marketing margin is that, when a consumer purchases food products, the consumer does not purchase only the food commodity, but a combination of the raw food product and a food marketing service.