Technology, Contracts, and Coordination: Modernizing Agricultural Supply Chains in Wisconsin Potatoes
Presented by:
Nurlan Utesov
Practice Job Talk
Department of Agricultural and Applied Economics
University of Wisconsin-Madison
Thursday, October 9, 2025
3:45 pm-5:15 pm
Taylor-Hibbard Seminar Room (Rm103)
This paper examines how technology adoption and contractual coordination jointly shape modernization in agricultural supply chains. Using a detailed case study of the Wisconsin fresh potato industry from 2010 to 2019, we analyze the effects of a wholesaler’s investment in quality-enhancing technology—specifically optical sorting systems (OSS)—and the establishment of long-term marketing contracts with a modern retail chain. Employing a structural demand model and a difference-in-differences strategy, we find that technological innovation increased price-cost margins by 4.6 cents per pound (10%), while marketing contracts contributed an additional 1.5 cent increase. These gains were reinforced by improved inventory management and reduced spoilage, underscoring the role of coordinated investments and formal agreements in enhancing efficiency. Our findings highlight how both relational foundations and formal contracts can align incentives in quality-sensitive, vertically fragmented markets. By providing rare empirical evidence from a developed-country context, this study contributes to the literature on supply chain modernization and demonstrates how technology and contracts together drive performance in agriculture.
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