Producer Returns From Cotton Strength and Uniformity: An Hedonic Price Approach

Implicit (hedonic) producer prices for fiber strength uniformity were estimated for the southwest U.S. cotton market using seemingly unrelated regression and market sales data from 1983/84 and 1984/85. Fiber strength and length uniformity had significant effects on the price of cotton, but price was less responsive to both attributes than anticipated. Producer prices were most responsive to fiber length and micronaire and least responsive to color and strength. The market at the producer level appears to be making effective price adjustments with respect to factors such as fiber color, trash content, micronaire, fiber length, and location, but strength and length uniformity premiums and discounts are smaller than those paid by end users.