The average price level hasn't been any lower this season than in other winter seasons. At the start of the season, Florida production was below normal. This caused high initial f.o.b. prices. These low supplies from Florida left room for Mexican growers to increase their shipments, attracted by the high price they could get for their tomatoes. Sellers of Mexican tomatoes can react quickly to changes in the U.S. market by reallocating their production from the domestic market.
Data shows that reallocation is possible within a week.
These higher supplies from Mexico kept Florida growers from receiving compensation for their lower production as U.S. prices were forced down, but were still above the price in Mexico. Florida shipments stayed low through March, and a second surge of Mexican imports profited from the relative higher prices. Another influential factor was the devaluation of the peso in December. Our analysis shows a marked rise in shipments to the U.S. with this devaluation. Mexican growers, eager to increase their exports, grabbed the opportunity with both hands.