New dynamics in producer-to-consumer price transmission in Spain’s tomato supply chain

Pricing is an essential element that significantly impacts the supply chain mechanisms. The primary objective of this study is to explore the transmission of producer-to-consumer prices in the Spanish fresh tomato industry. Employing the Threshold Vector Autoregressive model, and subsequently utilizing the Generalized Impulse Response Function, we investigated the nonlinear price adjustments that occur in response to positive and negative shocks affecting both tomato prices of consumers and producers. The findings show a clear pattern of distinct reactions between segments in response to shocks. Specifically, the speed and intensity of consumer price responses to producer price shocks appear to surpass those observed when producer prices respond to consumer price shocks. Furthermore, it is evident from the current research that the behavior of producers has evolved from earlier studies that utilized outdated information, suggesting a more competitive approach. The research identifies a new trend in producer behavior within the supply chain. By analyzing tomato price fluctuations, it advances current knowledge and provides essential market insights to support informed decision-making.