The Potential for Greenhouse Tomato Production Expansion in Florida
AbstractThe U.S. fresh winter tomato industry and Mexican tomato production have been engaged in a trade conflict since the early1970s. Given that tomato is the highest valued fresh vegetable item, the fresh tomato market in the U.S. is open for rent seeking actions of importers and domestic producers. While importers try to increase their shares by lowering the prices, domestic producers attempt to keep tomato as a high-valued item and at the same time avoid any costly investment in production practices (such as greenhouse production). However, the competition with Mexican greenhouse tomato producers push winter tomato producers (particularly, in Florida) to search for new investment opportunities. This paper utilizes net present value and real option analysis to investigate whether it is beneficial for Florida tomato producers to invest in greenhouse production methods to stay competitive in the tomato market during the winter season.
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Bibliographic InfoPaper provided by Southern Agricultural Economics Association in its series 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida with number 143095.
Date of creation: 2013
Date of revision:
Risk in investment decision; greenhouse tomato; net present value; real option approach; Agribusiness; Agricultural Finance; Crop Production/Industries; Production Economics;
This paper has been announced in the following NEP Reports:
- NEP-AGR-2013-02-16 (Agricultural Economics)
- NEP-ALL-2013-02-16 (All new papers)
- NEP-CDM-2013-02-16 (Collective Decision-Making)
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