Academic journal article Journal of Agricultural and Applied Economics

Changing Produce Marketing Barriers: A Comparison among Three Southern States

Academic journal article Journal of Agricultural and Applied Economics

Changing Produce Marketing Barriers: A Comparison among Three Southern States

Article excerpt

Produce growers in Kentucky, North Carolina, and Tennessee were surveyed in 2002 to gather information about their decision making in the areas of planting, postharvest handling, marketing, and expected changes. North Carolina has proportionately more respondents with large operations, and Kentucky and Tennessee were more similar and concentrated in smaller farms. Tennessee and Kentucky respondents were less likely to have engaged in activities that were associated with the commercial distribution system. Greater reliance on the commercial distribution system on the part of North Carolina growers is consistent with more produce export activity.

Key Words: cooling, direct markets, postharvest handling, produce marketing, traceback

Market development is a complex process, dependent to a significant degree on the simultaneity between buyers and sellers. This interaction is inherently dynamic because of changing food consumption patterns that favor fresh produce, structural changes in the marketing system, improvements in packing and processing methods to transfer products from fields to consumers, and the creation of global markets. Although increased consumption has been favorable for the produce industry, not all stakeholders in the distribution system have benefited. Access favors growers with larger operations who have the ability to deliver packaged and labeled products at specific grades, sizes, and sufficient volume for enough time to permit the creation of an appropriate market infrastructure to serve largescale buyers (Kaufman et al.).

Produce production can be instrumental in arresting the decline in the number of farms in some rural areas, as well as in providing an alternative to tobacco production. Successful transition depends largely on market development, which entails overcoming the simultaneity of generating enough production and having reliable outlets. Various states have pursued different types of produce market development and have achieved different degrees of success. Two fundamental questions follow directly: Are these relationships crucial (1) to creating market alternatives for growers and (2) for job opportunities within the produce industry?

A study funded by the Initiative for Future Agriculture and Food Systems (IFAFS) is underway. It entails comparisons of four states, of which two have been successful (Georgia and North Carolina) and two less successful (Kentucky and Tennessee) with respect to market development. The goal is to address the simultaneity problems vegetable producers with smaller operations encounter in securing outlets for their production. Five stakeholder groups were surveyed in each state: produce growers, Extension agents, state departments of agriculture marketing staff, marketing agents (e.g., brokers, wholesalers), and public market managers. This paper focuses on the results of the grower surveys in three of the four states (Kentucky, North Carolina, and Tennessee).1 These survey data provide an opportunity to examine the marketing behaviors of produce growers with respect to decision making about what to plant, postharvest handling practices, current marketing activities, and anticipated changes in the produce industry. Results are then related to recent produce export activity in the states.

Table 1 provides some background information about farms in each of the three states based on the 1997 Census of Agriculture (U.S. Department of Agriculture). Tennessee had the largest total acreage of farm land and crop land, and North Carolina had the least. However, with respect to average farm size, Tennessee and Kentucky farms were comparable and smaller than North Carolina farms. The distribution of farms by size indicates that Tennessee had the highest concentration of operations under 99 acres, closely followed by North Carolina. Kentucky had the largest share of farms between 100 and 999 acres, and North Carolina had the highest proportion of large farms. …

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