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Market Power in the United States Potato Industry

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  • Bolotova, Yuliya V.

Abstract

The motivations for this case study are the U.S. potato industry developments involving the implementation of a potato supply management program by a nation-wide group of cooperatives of potato growers during the period of 2005-2010. This program aimed to mitigate potato oversupply adversely affecting profitability of potato growers and provide fair returns for potato growers. The potato supply management program raised legal issues leading to antitrust lawsuits filed by potato buyers against potato growers and their cooperatives, which resulted in a large settlement. The case study introduces economic, business, and legal issues surrounding the implementation of this potato supply management program. The case study also provides simple contemporary applications of economic models of the profit-maximizing behavior of firms with seller market power in the U.S. potato industry. The case study presents a theoretical framework, which explains conduct and performance of the U.S. potato industry in alternative market scenarios, and a basic market and price analysis. The intended audiences are undergraduate and graduate students, as well as extension and outreach audiences. A teaching note includes a set of discussion questions and suggested answers. The teaching note also discusses teaching objectives, teaching strategies, and student background knowledge.

Suggested Citation

  • Bolotova, Yuliya V., 2021. "Market Power in the United States Potato Industry," 2021 Annual Meeting, August 1-3, Austin, Texas 313102, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea21:313102
    DOI: 10.22004/ag.econ.313102
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    References listed on IDEAS

    as
    1. Frederick, Donald A., 2002. "Antitrust Status of Farmer Cooperatives: The Story of the Capper-Volstead Act," Cooperative Information Reports (CIR) 280601, United States Department of Agriculture, Rural Development.
    2. Bolotova, Yuliya & McIntosh, Christopher S. & Muthusamy, Kalamani & Patterson, Paul E., 2008. "The Impact of Coordination of Production and Marketing Strategies on Price Behavior: Evidence from the Idaho Potato Industry," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 11(3), pages 1-30, September.
    3. Frederick, Donald A., 1989. "Managing Cooperative Antitrust Risk," Cooperative Information Reports (CIR) 280571, United States Department of Agriculture, Rural Development.
    4. Bolotova, Yuliya V., 2015. "Agricultural Supply Control: Lessons from the U.S. Dairy and Potato Industries," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 30(4), pages 1-8, December.
    5. Bolotova, Yuliya V., 2019. "Teaching Competition Topics: Applications of Seller Market Power in Agricultural Industries," Applied Economics Teaching Resources (AETR), Agricultural and Applied Economics Association, vol. 1(2), December.
    6. Bolotova, Yuliya, 2014. "Agricultural Supply Management and Antitrust in the United States System of Agribusiness," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 17(3), pages 1-24, September.
    7. Bolotova, Yuliya & Patterson, Paul E., 2009. "An Analysis of Contracts in the Idaho Processing-Potato Industry," Journal of Food Distribution Research, Food Distribution Research Society, vol. 40(1), pages 1-7, March.
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    Keywords

    Agricultural Finance; Production Economics;

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