The Price Impacts on the Canned Peach Industry by the Federal Commodity Procurement Program

This thesis analyzes the effects on the price impacts of the Commodity Procurement Program when canned peaches are purchased. The main objective is to assess the effects of canned peaches purchases on the farm-level price of canning peaches. Interviews of the industries that participate in the Commodity Procurement Program are used to understand how the industry interacts with commodity procurements and to evaluate if the industry feels that commodity procurements have a significant effect on procured fruitsâ and vegetablesâ prices to help better judge the overall effectiveness of the commodity procurement program. A theoretical model of the Commodity Procurement Programâs effects on the vertically related markets is constructed. Data are collected for the processor-level and farm-level peach markets.The results provide evidence that the quantity demanded of commodity procurements for canned peaches has a statistically significant negative effect on both the partial and final processor-level price. Also the results indicate that the quantity demanded of commodity procurements for canned peaches does not have a statistically significant effect on the final farm-level price. The results from the Breusch-Pagan tests for the processor-level partial reduced form price equation, the processor-level final reduced form price equation and the farm-level final reduced form price equation indicate that there is no significant evidence that the quantity demanded of commodity procurements stabilizes or destabilizes the farm-level or processor-level price.