The Effect of a Marketing Order on Winter Carrot Prices

Abstract

Abstract Marketing orders are utilized for the express purpose of improving returns to growers. Higher quality requirements and supply or rate‐of‐flow management are the major tools in such an effort. The adoption of the marketing order for South Texas carrots permitted a limited test of the hypothesis that derived demand would increase during the order period. The hypothesis is reasonable because of the relatively low quality image of Texas winter carrots. It appears that demand at the grower level in Texas did increase during the order period whereas demand at the f.o.b. levels in Texas and the major competing production area, California, remained unaffected. In effect, the spread between grower price and f.o.b. price narrowed in Texas. If most of the increase in demand was due to improved quality, total returns to growers probably increased as a result of the culling‐price relation.