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Supply chain impacts of an increased vegetable demand: The case of cabbage

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Posted: October 27, 2014

For the past decade, there have been numerous public and private interventions in the US aimed at increasing consumption of fruits and vegetables, yet the actual per capita daily intake of these foods remains well below the levels recommended by the US Department of Agriculture (USDA). In the case of dark leafy greens, for example, one recent estimate suggests that consumption would have to double before coming close to the USDA’s recommendations (Eaton et al., 2013). This raises an important but largely ignored research question: if the demand for dark leafy greens increases, what impacts will this have on supply chain structure and performance? To shed light on this important policy question, members of the Distribution Team developed a supply chain model of the U.S. cabbage sector that includes production, storage, transport and consumption.

"We wanted to estimate the supply chain impacts that would result if demand for cabbage — a popular dark leafy green — suddenly increased enough to close the current gap between actual consumption and recommended consumption," said Miguel Gómez, an associate professor of applied economics and management at Cornell University and the leader of the EFSNE project’s Distribution Team. "Using this model, we analyzed the impacts that such an increased demand would have on product flows, prices, and the structure of the cabbage supply chain in the Northeast."

The team's findings indicate that current US domestic production can supply enough cabbage to narrow the gap by 40 percent. However, this scenario implies that consumers would pay about 30 percent more for fresh cabbage. Given the undesirability of this consequence, the researchers examined an alternative scenario, asking what would happen if the amount of acreage devoted to cabbage could increase and where such an increase should take place. They found that the optimal locations to increase cabbage production are Upstate New York in the fall season and Arizona and Northern Florida in the spring season. Under this scenario, retail prices of cabbage experience only small increases.

"Overall, our results suggest that the Northeast region has the ability to help narrow the gap between recommended and actual cabbage intake, and about half of the additional demand in the Northeast is likely to come from within the region," said Gómez. "At the same time, we found that increased demand for cabbage leads to increased national integration of the supply chain. For example, the Northeast region would become an important supplier of cabbage to other U.S. regions in the fall season, whereas it would 'import' more cabbage from Florida and Arizona during the spring season."

These findings were reported in a master’s thesis by one of Gómez’s graduate students, Adeline Yeh. Yeh received a master's degree from the Dyson School of Applied Economics and Management at Cornell University this year.

More information about the research activities of the Distribution Team is available here.

References

  • United States Department of Agriculture, Economic Research Service (ERS). (2004). Daily intake of food at home and away from home: 2003-04.
  • United States Department of Agriculture, Economic Research Service (ERS). (2012). Household Food Security in the United States in 2012.
  • Yeh, Adeline, (2014). Supply Chain Impacts of an Increased Vegetable Demand: The Case of Cabbage. MS Thesis, Dyson School of Applied Economics and Management, Cornell University