Tomato Suspension Agreement: An Analysis of U.S. Fresh Tomato Market

Tomatoes are a high value crop in the United States market, especially during the winter months when the main suppliers are Florida and Mexico, and this has created conflict within the industry, off and on, for nearly 50 years. Literature points to imported tomatoes as the cause of lower prices in the United States market (ERS-USDA 2016). This thesis analyzes the effects of fresh tomato volumes both imported from Mexico and shipped from Florida on their shipping point prices and on terminal market prices in the United States. It also investigates the influence of the tomato suspension agreement on shipping point prices and on fresh tomato volumes in the United States, and to what extent temperature and precipitation have an impact on fresh tomatoes volumes. This analysis utilizes historical information of 18 years (1998 – 2015) of tomato volumes in the United States market, prices free on board (F.O.B.) for point of origin sales, prices of wholesale market sales at three main terminal markets, gas prices, weather patterns in the main tomato growing regions of Florida and Mexico, and the Tomato Suspension Agreement floor prices for Mexican tomatoes. The findings of this research show that the volume of Mexican tomatoes have no effect on shipping point prices of round tomatoes from Florida, and even more, neither affect the terminal market prices of round tomatoes from Florida at its main markets (New York and Chicago terminal markets). These findings contradict the accusations of Mexican tomatoes being dump in the market and lowering prices. The results of this study suggest that by utilizing different growing methods (greenhouses) the Mexican tomato industry has been able to control for temperature changes that can decimate tomato production acquiring a competitive advantage over Florida tomato production. Moreover, the findings suggest that the tomato suspension agreement floor prices affect in like manner volumes and prices of tomatoes from both Mexico and from Florida.

xFelix, Georgina thesis Final 8 2017.pdf (1.36 MB)

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