Beyond Scale and Scope: Economics of Specialty Crops in the U.S.

While 2020 was a hard year in many ways, 2021 has started off well in terms of publishing for me. This week I wanted to take a chance to highlight a recent paper co-authored with a colleague and friend of mine Dr. Kim Morgan. When I started at Virginia Tech in 2017, I had the opportunity to join on a interdisciplinary grant team that was developing new, domestic varieties of Edamame (vegetable soybeans). Most of the edamame we find in the freezer section at the grocery store and at many Asian-centric restaurants is imported. The multi-institutional and multidisciplinary team is wanting to breed new varieties based on the genome of domestic grain soybeans. You can read more about the project here: SPES-104 (1) Edamame[2] (vt.edu).

We are a few years into the grant now and I finally have a lead authored publication. This publication was part of a larger special issue in the Frontiers journals, but I wanted to take the opportunity to use this publication to talk about a broader issue in specialty crops economics research. In fact, this is a topic Kim and I have talked about since we began working together. The biggest difference when considering specialty crop production is the fact that they are not traditional row crops. And that has big implications for those producers.

In simplest terms, specialty crop production is considered high-risk, high-reward. The risks that need to be managed are different than traditional row crops and require more labor, capital, and knowledge. This paper takes a look beyond what we like to tell most row crop producers: (1) take advantage of economies of scale (get bigger and marginal cost decreases); and (2) As new, more productive varieties take advantage of economies of scope (trade out the old for the new). The issue with these two concepts in specialty crops is that scaling up is difficult as it requires large capital investments. When changing varieties in specialty crops, often times the specialty crops themselves are investments/fixed costs. Many specialty crops are known as perennial crops, so one plant produces for many years. Not so easy to switch out crops in these cases without additional capital investments AND loss of income.

What I really love about this publication was that the writing required a lot of thought and not a lot of math. In fact, it is the only publication I have written that didn’t have math in it! There are plenty of numbers, but no equations. This publication also walks you through the 5 levels of risk (production, financial, human resources/labor, marketing/price, and regulatory/policy). We hope that this publication provides a framework to analyze the risks producers face in all endeavors of agricultural production, not just specialty crops. We walk through the risks associated with edamame production and some ways to manage those risks as domestic production increases in the coming years.

Lastly, I just want to say that economics is a passion of mine and sometimes we all need to step away from the math and just observe. Many of us in the agricultural economics field work directly with producers through extension services. They don’t care about the math, they just want to follow their passion and produces an agricultural product. We need to do better as a profession at making sure our work has an impact on someone and provide an outlet that speaks their language – not all the jargon economists like to use. While I don’t have an extension appointment in my current role, I still want to make sure that what I do has an impact on the veterinary medicine field. I want to help make sure that they continue to thrive and not just survive.

Hope you enjoy this latest publication! A copy of the publication can be found open access at Frontiers | Beyond Scale and Scope: Exploring Economic Drivers of U.S. Specialty Crop Production With an Application to Edamame | Sustainable Food Systems (frontiersin.org). But a copy of the publication in PDF can be found below. Happy reading!

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