Performing Department
Agricultural and Resource Economics
Non Technical Summary
The term 'specialty crop' means fruits and vegetables, tree nuts, dried fruits, and horticulture and nursery crops (including floriculture) (7 USC 1621). In 2017, the US census of agriculture (USDA, 2019) recorded a market value for specialty crops produced in the United States of up to[1] $79.8 billion (16.2% of total value of US agricultural production) and up to $2 billion in North Carolina (9.4% of the total value of NC agricultural production). The US specialty crop sector is undergoing rapid change, with challenges including: increased international competition, labor scarcity, changes in climate and pest pressure and COVID-19; and opportunities: including the development of new varieties and marketing methods, increasing consumer demand, and policy and regulatory developments encouraging shifts away from other agricultural production (e.g. moratoriums on new pork production operations). This project seeks to identify and quantify these changes for selected specialty crops to understand better their potential impacts on producers and distributors along the specialty crop supply chain.The supply chain for specialty crops can be complex with multiple parts. These parts can be summarized into research and development, propagation, cultivation, harvest, storage and distribution, manufacturers, wholesaling, foodservice (commercial and institutional), retail and direct-to-consumer marketing. Changes in production technology---broadly defined to include plant varieties and production processes as well as embodied technology (Sunding and Zilberman, 2001)---will cause varied effects up and down the supply chain, improving prospects for some, and hindering others. Identifying and quantifying these differential outcomes is important for predicting potential adoption of new technologies and the social welfare implications of any public support for technology development.This project will focus on the economics of the supply side of specialty crop production, looking at the parts of the specialty crop supply chain both individually and in conjunction. It will examine how technological innovations (including new varieties) affects the choices of growers, distributor and/or retailers; it will explore how members of specialty crop supply chains value potential and realized improvements in production processes; and it will evaluate how changes in technology differentially affect members along multiple stages of the supply chain.The project will focus on the most economically significant specialty crops in North Carolina: Sweet Potatoes (~$325 million), cucurbits (~$80 million), and small fruits (greater than $60 million). The analyses performed for these crops will extend beyond the borders of North Carolina to include other parts of the US where possible. Additional crops may be included if time allows or exceptional opportunities arise. Crops will be examined at multiple scales, including smallholder and commercial operations.This project will build on established qualitative frameworks and quantitative methods to evaluate specialty crop supply chains in North Carolina and the US (e.g. Train, 2009; Sexton, 2013; Adjemian, Saitone and Sexton, 2016; Xiaoxue Du et al., 2016; Yue et al., 2017; Gallardo et al., 2018; DeVincentis et al., 2020).By its nature, much of this work will be multidisciplinary with expected collaborations with horticultural scientists, entomologists, microbiologists, and sociologists.[1] The census does not record the value of specialty crops only. If a farm sold row crops and specialty crops, the value of both would be included in the record.
Animal Health Component
0%
Research Effort Categories
Basic
20%
Applied
60%
Developmental
20%
Goals / Objectives
To model and quantify the costs and/or benefits of existing and emerging technologies (including new varieties) on specialty crop production and distributionTo identify emerging state, regional and national policy and regulatory changes that may affect specialty crop production and distribution and investigate potential impacts of these changes on specialty crop production.To analyze specialty crop markets from multiple perspectives, such as market integration, market structure, and social welfare.
Project Methods
This project has three main goals. The methods that will be used to achieve the goals are listed under the respective goals:To model and quantify the costs and/or benefits of existing and emerging technologies (including new varieties) on specialty crop production and distributionTo identify emerging state, regional and national policy and regulatory changes that may affect specialty crop production and distribution and investigate potential impacts of these changes on specialty crop production.Goals 1 and 2 will be achieved using methods including:Development of crop budgets (e.g. Tregeagle and Washburn, 2020)Evaluating the expected changes in production costs from new technologies and policies using partial budgeting (e.g. Blecker et al., 2018)Valuing potential changes in specialty crop production technology using choice modeling approaches (Yue et al., 2017)Using dynamic investment theory to analyze the effects of technological, policy and/or regulatory changes on perennial specialty crops (e.g. (Tregeagle, 2017; Tregeagle and Zilberman, 2018)To analyze specialty crop markets from multiple perspectives, such as market integration, market structure, and social welfare.Collecting price data for markets and market participants with thin or non-existant price data (e.g. Tregeagle and Wechsler, 2020)Analyzing market integration of crops within NC and the US (using the framework of Ravallion,1986)Using willingness-to-pay studies to estimate changes in social welfare from changes in the specialty crop market (Hanemann, 1984; Lusk and Hudson, 2004)Blecker, S. et al. (2018) 'Economic Value of the Herbicide Dacthal for Brassica and Allium Crops in California', ARE Update, 22(2), pp. 5-8.Hanemann, W. M. (1984) 'Welfare Evaluations in Contingent Valuation Experiments with Discrete Responses', American Journal of Agricultural Economics, 66(3), pp. 332-341. doi: 10.2307/1240800.Lusk, J. L. and Hudson, D. (2004) 'Willingness-to-Pay Estimates and Their Relevance to Agribusiness Decision Making', Review of Agricultural Economics, 26(2), pp. 152-169. doi: 10.1111/j.1467-9353.2004.00168.x.Ravallion, M. (1986) 'Testing Market Integration', American Journal of Agricultural Economics, 68(1), pp. 102-109. doi: 10.2307/1241654.Tregeagle, D. (2017) The Dynamics of Perennial Crop Production and Processing. University of California, Berkeley.Tregeagle, D. and Washburn, D. (2020) 'NC Sweet Potato Production Costs 2020'. Available at: https://cals.ncsu.edu/are-extension/wp-content/uploads/sites/27/2020/03/Sweet-Potato-2020.pdf (Accessed: 17 July 2020).Tregeagle, D. and Wechsler, D. (2020) Report on NARBA's 2020 Pricing and Marketing Survey. North American Raspberry and Blackbery Association, p. 12.Tregeagle, D. and Zilberman, D. (2018) 'Implications of Disrupting a Perennial Crop Replanting Cycle: The Brazilian Sugarcane Example', ARE Update, 22(1), pp. 5-8.Yue, C. et al. (2017) 'U.S. Growers' Willingness to Pay for Improvement in Rosaceous Fruit Traits', Agricultural and Resource Economics Review, 46(1), pp. 103-122. doi: 10.1017/age.2016.31.