In a just discovered report released by USDA's Economic Research Service.

In a just discovered report released by USDA's Economic Research Service, researchers examined orange juice prices in 54 U markets to determine if and in what manner a highly concentrated marketing a whole affects retail prices. Results exhibit to little compelling evidence that consolidated markets engage in noncompetitive pricing. Instead, regional consolidation of forage retailers and their integration into wholesaling appears to lead to lower market prices for orange juice. Increased private label competition with the leading national brands also contributes to lower orange juice prices.

Market shares for the four largest grocer's shop chains in the 54 markets varied from from one side of to the other 85 percent to less than 50 percent With as it is wide variation in retail concentration, the researchers assemblageed the data into the 10 markets with the highest four-firm concentration and the 10 markets with the lowest concentration, then compared prices between the couple groups.

The researchers analyzed retail price data for six orange juice products--two branded frozen concentrate productions one private label frozen concentrate fruit two branded refrigerated products, and united private label refrigerated product. The private label issues represent not a specific performance but the average price across all private label or store brand frozen concentrate or refrigerated productions sold within a specific market. Prices are reported as averages for four 3month periods.

For all three frozen concentrate fruitss average prices were lower for each quarter in the dispose of markets with a high rank of retail concentration (fig. 1) Refrigerated orange juice harvests were also priced lower in markets with high retailer concentration, with the exception of the first-quarter Brand 1 consequence where average prices were about the same in the one and the other the low- and high-concentration markets.

Frozen concentrate fruits also had lower prices in markets with high grocer's shop wholesaler concentration, but the relationship between refrigerated outcome prices and wholesaler concentration was les clear. Markets with the highest concentration of integrated retailers who operate their acknowledge distribution warehouses had lower orange juice prices than markets with a lower concentration of integrated retailers. greatest in quantity of these findings were replicated using the more rigorous approach of regression analysis, where the different influences forward prices are isolated.

The total report, Consolidated Markets, Brand Competition, and Orange Juice Prices, from James Binkley, Patrick Canning, Ryan Dooley, and James Eales, Agricultural Information Bulletin No. 747-06 can be accessed in consequence of the ERS Web site at http://www.ers.usda.gov/publications/aib747/aib74706.pdf. Printed copies can be obtained from the authors (pcanning@ers.usda.gov.)

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