Food Manufacturers’ Decision Making Under Varying State Regulation

States are increasingly regulating the production practices, ingredients, and labeling of food products sold within their borders. This patchwork approach to food policy is likely to have significant ramifications for the U.S. food sector and interstate agri-food trade. We develop a conceptual framework to assess how differences in states’ regulations influence food manufacturers’ costs and production decisions. Using the model, we examine differences in producer behavior across three policy examples, illustrating how firms respond to regulatory costs and highlighting the implications of interstate heterogeneity in food policy.