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A Comparison of Risk and Return Properties for Direct and Wholesale Produce Markets
International Food and Agribusiness Management Review (2014)
  • Man-Keun Kim, Utah State University
  • Kynda Curtis, Utah State University
  • Irvin Yeager, United States Department of Agriculture
Abstract
This study examines marketing strategies for small-scale producers by comparing the risk and return properties of direct (farmers’ markets) and wholesale marketing channels. Farmers’ market prices for fresh produce were collected at sixteen markets in Utah and Colorado. San Francisco terminal market prices were used to represent wholesale prices. A simulation model combined price, yield, and market risk to construct probability distribution functions showing the likelihood of differing levels of profit for eleven marketing options. The results show that risk-averse producers prefer a combination of channels (40% direct/60% wholesale), while risk neutral producers prefer to market exclusively through farmers’ markets.
Keywords
  • Direct markets,
  • Fresh produce,
  • Small farms,
  • Risk,
  • Return
Publication Date
2014
Citation Information
Man-Keun Kim, Kynda Curtis and Irvin Yeager. "A Comparison of Risk and Return Properties for Direct and Wholesale Produce Markets" International Food and Agribusiness Management Review Vol. 17 Iss. 3 (2014)
Available at: http://works.bepress.com/man-keun_kim/30/