An economic analysis of the desirability of another tree nut marketing order: Pecans

Abstract

The Agricultural Marketing Agreements Act of 1937 allows groups of specialty crop producers to form marketing orders to affect various aspects of the market in which they sell. Two of the three major tree nuts--almonds and walnuts--operate under marketing orders. This study examined the question of whether or not the third major tree nut industry--pecans--should follow suit. An econometric model of the demand side of the tree nut industries was developed and used in simulations to see how prices and total revenues in the pecan industry would change under different assumptions as to the existence, or form, of a marketing order. The results showed that over the simulation period--1988 to 1992--the industry would benefit from the formation of a marketing order that limited quantities reaching the primary market, and used the surplus for developing new markets.