SUPPLY ELASTICITIES AND RESPONSES TO RELATIVE PRICE CHANGES IN ORGANIC PRODUCE MARKETS

We estimate supply equations for six organic crops-broccoli, carrots, celery, romaine lettuce, strawberries and watermelons-and use these to calculate supply elasticities. We also estimate the rates at which farmers adjust output in response to changes in price premiums between organic and conventional markets. Rates of adjustment range from nearly instantaneous (carrots) to somewhat slow (lettuce). In both the short run (a single season) and the long run (more than one season), supply exhibits inelasticity, with responsiveness to relative price changes being more restricted in the short run. Supply elasticities compared for pre-1989 and 1989 periods show both increasing (carrots and lettuce) and decreasing (broccoli, celery and strawberries) long run elasticity over time.