From UBC Wiki
Topics in Food Market Analysis
FRE 502
Instructor: Dr. Rick Barichello
Office: MCML 339
Office Hours: Mon 2:30‐3:30
Class Schedule: Mon/Wed 1:00-2:30 pm
Classroom: MCML 154
Important Course Pages
Lecture Notes
Course Discussion


FRE 502: Topics in Food Market Analysis


Session and term: [2023W1]

Class location: [MacMillan 154]

Class times: [Monday, Wednesday 13:00-14:30]

Course duration: [September 6 to December 22]

Credits: [3]


This course covers topics related to food prices and how food markets work, both from an aggregate perspective of food and resource markets, and the perspective of specific commodity markets. This includes food price determination and predicted price paths, comparing the functioning of domestic and international food markets, trade in food products, issues related to the integration of commodity markets, market power in food markets, the role of institutions in their operation, and commodity cases where significant externalities exist. The course emphasizes combining theory with data, learning how markets work in the real world, and getting the appropriate data to undertake their analysis. Various models of food markets will be covered, and a sample of specific markets will be analyzed, including dairy and palm oil markets.


Instructor: [Rick Barichello]

Phone: [604–822–3473]

Office location: [MacMillan 339]

Email: []

Office hours: [Monday, 14:30-15:30]


Course Assistant: [Vivek Jairam Bobb]

Office location: [MacMillan 348]

Email: []

Office hours: [Wednesday, 12:00-13:00]


By the end of this course, students will be able to:

  1. Use a variety of analytical tools to probe questions and important issues concerning food markets, both domestic and international
  2. Develop ability to critically review articles concerning food markets, and to engage in discussion about them.
  3. Learn key issues in undertaking sound empirical analyses in the food sector, including importance of market and institutional data.
  4. For at least two food commodities, integrate the relevant topics listed below to arrive at a sound understanding of its economics, such as drawing inferences from price patterns, assessing margins within the marketing chain, understanding technical change at farm and processing levels, interpreting evidence of demand shifts over time, the role and effects of international competition and trade patterns, spatial and time factors (e.g., storage) in influencing product flows, market concentration, externalities, and selected economic changes within the recent past, such as the current outburst of inflation and the Russian invasion of Ukraine.

MORE COURSE DETAILS: 4 Important Themes

  1. We will learn a variety of models showing how markets operate (price theory models), with special attention to international trade and world markets. These models will be focused on graphics, but with the underlying algebra used in a complementary fashion. Much attention will also be given to the underlying structure of those markets, with supply and demand factors (“fundamentals”). The purpose will be to learn how the agents in these models, consumers or producers, will be responding to changes in various key factors. So much action in these markets is the result of these players responding, endogenously, to changes in prices, incomes, and technologies.
  2. Equivalent in importance to these models is the acquisition and observance of data, real world observational data. That is, we use real data to confront our models to test them, from which we learn how accurate are our models. Often, our models are incomplete in that they may not capture variables that are actually important to consumers and producers. So we must examine the data to understand what is really occurring, and amend our understanding of those markets and our models accordingly.
    • What remain constant are the economic principles that are underlying our models. However, even those principles may need to be modified or interpreted differently as new observations or findings come to light. For example, the market players may not all have accurate information, or some of them may be influenced by psychological factors that cause them to act differently from what our models would suggest, when the models rely upon a simple version of ‘rational’ decision-making. This is saying that information asymmetries are common and behavioral economics issues can be important. But ‘learning’ also occurs and people typically do not continue to make mistakes.
    • These are all nuances that arise when we turn to real world data and try to understand, interpret and forecast those data. Attention to real world data and circumstances, combined with strong economic theory, are key parts of our course and distinguish our course from many other economics courses. Knowing the equations that describe market behaviour is valuable, but is sometimes only a part of what we will be doing in our course. Related to this, being able to move between graphical analysis and algebraic analysis will be valuable.
  3. A third theme is that sometimes our ‘data’ come in the form of institutional rules (e.g., policies and regulations), even informal rules, that guide or are imposed (e.g., by communities) on various players. We will learn how important these can be, and how to use those rules to learn more about data and behaviour in the sector.
  4. Other key components: We will focus on the food and resource sectors, but will touch upon both developed and less developed economies. We will then want to learn some technological issues in the food and resource sectors to guide or differentiate the models we use so they are more relevant. We also will look at different stages of production, or processing, in the commodity markets we examine. This means we will address different points in the supply chain of a food or resource commodity. We also examine both the private side of these markets as well as any externalities that occur or are relevant in that market. This is broader than simply environmental externalities and includes policy distortions as well. Finally, we will ask questions about how our models may be incomplete or may benefit from being extended to different circumstances. This will require that you think creatively about changes in our models.


Date %
Midterm Oct 18th 25%
Problem Sets (5 @ 5.5%) Due dates: Sep 20, Oct 10, Nov 3, Nov 17, Dec 3. 27.5%
Final Exam View MFRE online schedule 40%
Discussion & Participation 7.5%
Total 100%


Discussion & Participation

  1. It is a priority in our class to encourage discussion. This can be done via in-class questions, and in responses to Discussion Sessions and questions posed periodically throughout the lecture schedule.
  2. Students are required to keep a personal record of class discussion & participation
  3. Marks are awarded for comments and questions asked during class
  4. Marks will also be awarded for questions asked in the Canvas discussion forum
    • Questions & comments must be posted at least 12 hours before a lecture to be recorded as class participation. This provides the instructor sufficient time to read the question and potentially address it during class.
  5. One Mark is awarded for every insightful question or comment asked (in class or through email). We do not want to encourage asking questions just for the sake of asking anything to get a participation mark. For this activity to benefit the class, we want to award marks only for questions that will raise new issues, explain issues not properly covered in class, to point out errors in class materials (including readings), or to raise questions of applying our tools to new cases or news items that you may read about. No points awarded for questions judged to be superficial.
  6. A maximum of 1 mark is awarded for questions or comments per lecture
  7. Please complete the record after each class (You might be requested to submit your record anytime during the semester for verification or grading purposes)

Writing Exams

All exams will be in-person and will follow MFRE exam protocol (See Student Portal). Exams may be online, e.g., in Canvas, but students must be physically present, use the lock-down browser, and invigilated. If a student is unable to write an exam, they must have a verifiable doctor’s note and must contact the Course Instructor, Course Assistant, and MFRE Program Manager before the scheduled exam date/time. If the documentation is considered legitimate, the student will be informed of the how to proceed.

Missed Assignments & Exams

Late assignments are not accepted, and there will be no makeup exams. However, accommodations are available to students with valid academic concession requests.


1. Aggregate Food Price Dynamics [Sumner (below), McCalla see below, N&L Ch3,5]
a LR commodity price trends, past/present Lecs 1, 2 Sep 06, 11
b Discussion:

With rising real wage rates, how can market prices steadily decline in real terms?

What part of economic theory can you use to explain this?

How can you confirm the basic facts?

What is the policy issue that would use or require this information?

How can this phenomenon guide you in investment decisions?

c Inflation and agricultural commodity and food prices Lec 3 Sep 13
d Seasonal Price Movements: Hog cycle; storage and seasonality Lecs 4, 5 Sep18, 20
e Economics of by-products: their effect on commodity markets
f Equilibrium Displacement Models and modelling P movements Lec 6 Sep 25
*Problem Set #1: Due Sep 20 (distributed Sep13)
2. Trade [8 lectures: Sep 27-midterm] [McCalla-Josling Ch 2, Reed Ch. 3, 4, 8 (2001)
a Excess Supply and Demand models Lec 7 Sep27
b Effects of various government programs on world prices Lec 8 date pending
c Applications of ESED: currency depreciation (Reed pp.118-120), transport costs Lec 9 Oct 04
*Problem Set #2: Due Oct 10 (distributed Oct 3)
d Trumpian tariff wars: tariff increases by US, then by China;

effects on (a) farm prices, (b) currency values, (c) nonfarm prices from US tariff facing US consumers, (d) national income (via farm sector, consumer sector, welfare losses)

Lec10 Oct 11
e Make-up Class for lost lecture(s)?
f Trade Institutions: WTO Rules, Topics, Anti-Dumping ( Lec 11 Oct 12
g Currencies as commodities: What will cause a depreciation or appreciation of country X’s currency?

What underlies the supply of and demand for a country’s currency. How do exports and imports affect it? How does foreign investment affect it? What is the price of a currency?

Lec 12 Oct 16
3. Concentration [4 lectures; Oct 23-Oct 30]
a Farm Retail Price model

Reading: R.A. Schrimper, Economics of Agricultural Markets, 2001, Ch. 2, (4, 5), 6

Norwood-Lusk, Agricultural Marketing and Price Analysis, 2007: Ch 4, 6, 10, 11.

Lec 13 Oct 23
b Models and Measures of Market Power Lec 14 Oct 25
*Problem Set #3: Due Nov 3 (distributed Oct 27)
c Traditional analysis of market power; Supply chains. 4 papers: Reardon, Sexton (2) Dairy, Vegs. Lec 15 (c, d, e) Oct 30
d Discussion Session: Egg Pricing and COVID: NYT article Sumner and Sexton

How would you research this question?

e Modern Re-Appraisal: Sexton AJAE Presidential Address: All read/discussion in class. Implications for discussions, policies on mkt power in agric.

Reading: Rich Sexton, “Market Power, Misconceptions, and Agricultural Markets,” American Journal of Agricultural Economics, Vol 95, 2013: Amer. J. Agr. Econ. 95(2): 209–219; doi: 10.1093/ajae/aas102

4. Market Integration [2 lectures Nov 1-3]
a Overview, Rural urban markets model (Timmer et al Ch. 4) Lec 16 Nov 01
b Case: Indonesian Labour Mkt (Barichello & Harahap, 2020) Lec 17 Nov 03
5. Institutions in Food Markets [3 Lectures Nov 06 - 16]
a Canadian Dairy sector: modelling it Lec 18 Nov 06
b Analysis of Farm Marketing Quotas; Calculating MC, Policy Risk Lec 19 Nov 08
c Analysis of Import Quotas (TRQs); current trade conflict Lec 20a Nov 16 T.B.D.
d STEs, BULOG, and International Trade pricing Lec 20b Nov 16 T.B.D.
*Problem Set #4: Due Nov 17 (distributed Nov 10)
6. Case Studies [Nov 20- Dec 06]
a Quebec Hog Industry:

i. Use the following reference: to answer following questions.

ii. Why is global demand for pork down? Why are domestic costs of production up?

iii. What are the implications of one hog processing firm having a market share of 80%?

iv. Is it believable that Canadian pork consumption is down at the same time as pork prices are down? What information do you need to examine this critically?

v. Is the comment about grain prices/costs (for feeding pigs), that those costs have soared, valid?

vi. Are grain costs ½ to 2/3 of hog production costs? How to check this?

vii. Can Olymel compete with US hog processors given its small plant scale in a sector with economies of scale?

viii. Can Olymel’s new production/marketing strategy of producing “Nagano pork” have a chance of working? It appears to require a reduction in pork output, meaning fewer purchases from farmers.

ix. Analyze the pork producers’ union operation of being a one-buyer of Quebec pork and hence one-seller to the big processor (Olymel).

x. Can it operate like the milk industry with farm level quotas? They appear to think they can do this. What is the future path for profitability for this industry? Note the differences between it and Ontario’s hog industry.

Lec 21 Nov 20
b Palm Oil case study: production, trade, externalities; scale, profitability, intercrop substitution. Price patterns of past years. Role of Indonesian govt policy, export bans. Lec22. Nov 22
c Designing fisheries quota scheme: common prop problem + SH

i. The externality in fisheries markets and why individual tradable quotas are a solution ii. Designing efficient quota system: tradable stock quotas, accessible quota rental market

iii. Issues related to monitoring and enforcement of fisheries quotas, including smallholders.

Lec 23 Nov 27, 29
*Problem Set #5: Due Dec 3 (distributed Nov 24)
d SEAWEED Industry issues: trade bans, etc. Lec 24 Dec 04
e Nature of externality in seaweed production Buffer Lec 25 Dec 06


Barichello, Richard R. “Capitalizing Government Program Benefits: Evidence of the Risk Associated with Holding Farm Quotas,” Chapter 16 in John M. Antle and Daniel A. Sumner, Eds. The Economics of Agriculture Vol.2: Papers in Honor of D. Gale Johnson. University of Chicago Press, 1996.

Barichello, Richard, and Faisal Harahap, “Reducing Rural Poverty through Trade? Evidence from Indonesia,” Chapter 6 in Barichello, Richard R., Arianto Patunru and Richard Schwindt, Eds., Globalization, Poverty, and Income Inequality: Insights from Indonesia. University of BC Press. 2021.

Alex McCalla, 1st Daryl Kraft Memorial Lecture, University of Manitoba, Winnipeg, February 24, 2009. “Agricultural Commodity and Food Prices, a Wild Ride! What’s Next?” plus closely related ppt presentations such as at GrainWorld Conference, Winnipeg, Feb 22 2009. Summary of latter is here: and copy of this reporter’s summary is in our course’s Announcements.

Alex McCalla and T. Josling, Agricultural Policies and World Markets, Prentice Hall, 1985, Ch. 2.

Bailey Norwood and Jayson Lusk, Agricultural Marketing and Price Analysis, Pearson, 2007. Chapters 3, 5. [NL}

Rapsomanikis, G., D. Hallam, and P. Conforti. 2006. “Market Integration and Price Transmission in Selected Food and Cash Crop Markets of Developing Countries: Review and Applications.” (Ch.8) In A. Sarris and D. Hallam, ed., Agricultural Commodity Markets and Trade: New Approaches to Analysing Market Structure and Instability. London: Edward Elgar for the Food and Agriculture Organization.

R.A. Schrimper, Economics of Agricultural Markets, PrenticeHall 2001; HD1433.S37 2001. Ch. 2, (4, 5), 6

Rich Sexton, “Market Power, Misconceptions, and Agricultural Markets,” American Journal of Agricultural Economics, Vol 95, 2013: Amer. J. Agr. Econ. 95(2): 209–219; doi: 10.1093/ajae/aas102

C.P. Timmer, W. Falcon, and S. Pearson, Food Policy Analysis, Johns Hopkins Press for World Bank,1983. Ch.4. []

Michael Reed, International Trade in Agricultural Products, Prentice Hall, 2000.

Daniel Sumner, “Recent Commodity Price Movements in Historical Perspective,” American Journal of Agricultural Economics, Vol. 91, No.5, Proceedings Issue (Dec. 2009): 1250-1256. [in LOCR for our course] [Sumner]



There is no required distribution of recordings of class. Recording will be provided based upon on the decision of the course instructor. Classes are designed as and are intended to be in-person.


All materials of this course (course handouts, lecture slides, assessments, course readings, etc.) are the intellectual property of the instructor or licensed to be used in this course by the copyright owner. Redistribution of these materials by any means without permission of the copyright holder(s) constitutes a breach of copyright and may lead to academic discipline and could be subject to legal action. Further, audio or video recording of classes are not permitted without the prior consent of the instructor.

Missing Classes/Labs

Students are expected to attend all classes, labs, or workshops. If you cannot make it to a class, lab, or workshop due to a medical or personal emergency, email your Instructor, your Course Assistant, and Olivier Ntwali, MFRE Program Coordinator ahead of time to let them know.

Respectfulness in the Classroom

Students are expected to be respectful of their colleagues at all times, including faculty, staff and peers. This means being attentive and conscious of words and actions and their impact on others, listening to people with an open mind, treating all MFRE community members equally and understanding diversity.

Respect for Equity, Diversity, and Inclusion

The MFRE Program strives to promote an intellectual community that is enhanced by diversity along various dimensions including status as a First Nation, Métis, Inuit, or Indigenous person, race, ethnicity, gender identity, sexual orientation, religion, political beliefs, social class, and/or disability. It is expected that all students and members of our community conduct themselves with empathy and respect for others.

Centre for Accessibility

The Centre for Accessibility (CfA) facilitates disability-related accommodations and programming initiatives designed to remove barriers for students with disabilities and ongoing medical conditions. If you are registered with the CfA and are eligible for exam accommodations, it is your responsibility to let Olivier Ntwali, Academic Program Coordinator, and each of your Course Instructors know. You should book your exam writing with the CFA using its exam reservation system: for midterm exams or quizzes, at least 7 days in advance; and final exams, 7 days before the start of the formal exam period.


Plagiarism and Academic Dishonesty

Academic dishonesty and plagiarism are taken very seriously in the MFRE program. All incidences of plagiarism will be escalated to the MFRE Academic Director with penalties ranging from a mark of zero on the assignment, exam or course to being required to withdraw from the program. Note: If a student needs to extend his/her program due to a failed course or unsatisfactory progress, they will have to pay the full MFRE tuition fees for that term/s.

Academic misconduct that is subject to disciplinary measures includes, but is not limited, to the following:

  • Plagiarism, which is intellectual theft, occurs where an individual submits or presents the oral or written work of another person as his or her own. Correct citations must be provided where applicable for all reports/assignments. In all MFRE courses, material will be submitted to a service which UBC subscribes, called TurnItIn. This service checks textual material for originality. For more information, review the TurnItIn website.
  • Using Generative Artificial Intelligence (AI) tools like ChatGPT, Bard, or other Generative AI models to generate content or conduct analysis for evaluations, without proper citation and or if asked not to use AI, is considered plagiarism and academic misconduct. If students use AI in their submissions, they must cite the AI generator using citations consistent with the UBC Academic Honesty Standards.
  • Cheating, which may include, but is not limited to falsification of any material subject to academic evaluation, unauthorized collaborative work; or use of unauthorized means to complete an examination.
  • Working with Others on an Assignment, You are encouraged to work with other students, but you must turn in your own individual assignment. If you have an answer that is too close to another student’s answer, this will be considered academic dishonesty and this will be handled according to the MFRE and UBC policies.
  • Resubmission of Material, submitting the same, or substantially the same, essay, presentation, or assignment more than once (whether the earlier submission was at this or another institution) unless prior approval has been obtained from the instructor(s) to whom the assignment is to be submitted.
  • Use of Academic Ghostwriting Services, including hiring of writing or research services and submitting papers or assignments as his or her own.

Student Responsibility: Students are responsible for informing themselves of the guidelines of acceptable and non-acceptable conduct for examinations and graded assignments as presented via MFRE Code of Conduct; MFRE Turn it in, Course Syllabus, MFRE Instructors; Canvas and UBC academic misconduct policies.

Penalties for Academic Dishonesty: Penalties for academic dishonesty are applied at the discretion of the MFRE program. Incidences of academic misconduct may result in a mark of zero on the assignment, examination, or course, required withdrawal from the program, and/or the matter being is referred to UBC Graduate Studies.