How Costco Might Could be Changing the Overall Price of Beans

AAEA members present at 2020 ASSA Annual Meeting

Over the last several decades, market concentration has been increasing in agricultural procurement, food processing, and retailing sectors, raising concerns about reduced price competition and enhanced opportunities to exploit market power in the food system. The trend towards consolidation among food retailers has implications for market price outcomes in both farm product markets and consumer markets that bookend an increasingly industrialized food distribution system. On the consumer side, supermarkets have become the driving force of transformation in the food industry through trends in selling formats towards increased prominence of large national chains in urban and rural markets andgrowing numbers of warehouse clubs and supercenters. Pricing incentives in consumer markets have also led to greater reliance on food banks and food donation to ration consumer markets by removing food from the marketing channel to support higher retail prices. In an AAEA session taking place at the Allied Social Science Association’s Annual Meeting entitiled “Market Structure and Pricing in food Markets” four papers discuss several key issues on on food markets.

The organizer of the session, Steve Hamilton from California Polytechnic State University  says, “The session will address the implications of retail consolidation for farmer and consumer outcomes in the food system, including changes in prices and increased potential for food waste.“

Papers in this session:

• Food Retailing in Rural America: Growth of National Chains and the Viability of Independent Stores
  Metin Çakır, University of Minnesota, Clare Cho, USDA Economic Research Service, and Xiangwen Kong
• The Effect of Competition on Pricing and Product Positioning: Evidence from Wholesale Club Entry
  Christoph Bauner, University of Massachusetts, and Emily Wang, University of Massachusetts, Amherst
• Spatial Competition and Pricing in Agricultural Procurement Markets: Evidence from the Corn Market in Indiana
  Jinho Jung, Purdue University, Juan Sesmero, Purdue University, and Ralph Siebert, Purdue University
• Food Waste, Food Banks, and Damaged Goods
  Timothy J. Richards, Arizona State University, John Lowery, and Stephen F. Hamilton, California Polytechnic State University

This session will take place on Saturday, January 4, from 10:15 am – 12:15 pm at the Manchester Grand Hyatt San Diego. To attend this session please contact Allison Scheetz in the AAEA Business Office for your complimentary Media Registration.

ABOUT AAEA: Established in 1910, the Agricultural & Applied Economics Association (AAEA) is the leading professional association for agricultural and applied economists, with 2,500 members in more than 60 countries. Members of the AAEA work in academic or government institutions as well as in industry and not-for-profit organizations, and engage in a variety of research, teaching, and outreach activities in the areas of agriculture, the environment, food, health, and international development. The AAEA publishes two journals, the American Journal of Agricultural Economics and Applied Economic Perspectives & Policy, as well as the online magazine Choices and the online open access publication series Applied Economics Teaching Resources. To learn more, visit www.aaea.org.

Contact: Allison Scheetz
Senior Communications Manager
(414) 918-3190
Email: ascheetz@aaea.org