Import demand for tropical fresh fruits and fresh vegetables in the U.S.

Summary

The import share of U.S. fresh fruit and vegetable consumption has increased significantly the past two decades, with the import share for non-citrus fruits rising to 53 percent.

Situation

U.S. consumer perceptions and habits toward consuming more fresh fruits and vegetables and the influx of an immigrant population accustomed to fresh-produce diets, mainly Asian and Hispanic populations, has impacted the demand for fresh fruits and vegetables. Supply factors, such as the climate and a limited farm labor supply, on the other hand, have restricted the ability of U.S. producers to respond to the rising demand, making imports the more viable solution to satisfy the rising demand for fresh fruits.

Response

This study analyzes U.S. import demand for the top tropical fresh fruits and fresh vegetables, which also comprise the bulk of U.S. fresh fruit and vegetable imports. We examine the U.S. demand for selected tropical fresh fruits and vegetables using an LA/AIDS model with price homogeneity and symmetry imposed. The fresh fruits and vegetables selected for the study are bananas, pineapples, papayas, mangoes/guavas, grapes, tomatoes, cucumbers, peppers, and asparagus. To capture the seasonality effects, a spectral approach is used by introducing trigonometric seasonality in the model. We next employed a dynamic, source-differentiated AIDS model estimation of selected fresh vegetables that include fresh tomatoes, peppers, cucumbers, and asparagus. The origin of the fresh vegetables is categorized into U.S. domestic source and total imports.

Impact

NAFTA trade policy significantly impacted expenditure shares for imported papayas, tomatoes, and peppers, due to improved accessibility, but negatively impacts bananas and pineapples due to the entry of more varieties of fresh produce. Most fresh vegetable imports were shown to be more price elastic than their domestic vegetable cohort. Cucumbers and asparagus are shown to be price elastic, and all the fresh vegetables were found to be responsive to real expenditure changes. Most fresh vegetable imports were shown to significantly compete with domestic fresh vegetables, and in particular with tomatoes, peppers, and cucumbers. Key market players in the fresh fruit and vegetable trade and the countries of origin for these commodities can use these findings in determining how much they could increase their U.S. market share and if price competition is a viable option. The U.S. might also find the results useful in deciding what and when to allow some tropical fresh fruits and vegetables into the country to promote fresh produce consumption and to bolster domestic fresh produce production.

State Issue

Agricultural Profitability and Sustainability

Details

• Year: 2009
• Geographic Scope: International
• County: Clarke
• Program Areas:
  • Agriculture & Natural Resources