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 fruits' and vegetables' prices to help better judge the overall effectiveness of the commodity procurement program. A theoretical model of the Commodity Procurement Program's 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. / Master of Science

Master of Agribusiness / Department of Agricultural Economics / Arlo Biere / Laundry bar soap has been produced commercially in Venezuela for over a century and is one of the most important products for beauty and personal care throughout the Venezuela. More than 10 Venezuelan companies produce and sell it, but two companies hold almost 85 percent of the market share, with the Las Llaves brand, alone, holding nearly 70 percent. Management for Las Llaves is concerned about how to remain competitive not only with quality and acceptance of its product (effectiveness) but also with how to produce the soap efficiently (at the lowest possible cost) to remain competitive in today's global economic environment. The objective of this thesis is to identify and analyze the sourcing costs of three raw ingredients used to produce laundry bar soap in the Las Llaves facility and to provide a model scenario to support the decision making analysis within the purchasing department.