Price Elasticity Tool
Potato growers now have a useful tool to help them determine price elasticity. Sarah Reece -- Global Retail Marketing Manager for the United States Potato Board explains.
REECE: The U.S. Potato Board worked with Nielsen Perishables Group to do some research on potato proc elasticity. We wanted to do the research to determine if with a change in price, if it changed the amount of potatoes the consumers would buy. We’ve been seeing a lot of changes in elasticity across other produce categories and potatoes were one of the only items in the produce department to decline in volume despite having a price increase.
She says that created a desire to understand the market a bit more. Out of that came an online tool.
REECE: We developed the tool as a way for growers and shippers to go into this tool, it has average prices already built into it but growers and shippers can go in and change the price of say russet potatoes, a russet 5-lb page and it’ll see how it affects russets but it will also show how it affects the rest of the category.
Through their research they discovered some interesting things.
REECE: We did see that there was a wide range of elasticity within the potato category. We saw a lot of things that you might expect to see such as russets, reds and white potatoes being less elastic so they were less price sensitive where we saw some more specialty types of potatoes, petites, fingerlings, purples being more elastic.
And that’s Colorado Ag Today. I’m Greg Martin, thanks for listening on the Ag Information Network of the West.