Modeling Florida Fresh Tomato Supply Response: Composite Switching Regressions with Variable Weather-Determined Lags

A supply-response model for Florida fresh tomatoes is specified to analyze the impacts of the U.S. Department of Commerce's suspension agreement which governs imports of fresh tomatoes from Mexico. The particular focus is on the impact of the "reference" price which causes Mexican imports in a given week to cease if import prices in the prior week fall to the reference price. Using weekly weather data, a growing degree day (GDD) variable is constructed which predicts week of first harvest and duration of harvest. The GDD variable is used to construct the appropriate, variable lag length for weekly acres planted in four Florida production regions. A composite switching-regime model is estimated in which the regime prior to the suspension agreement occurs at a known time. The other two regimes occur when Nogales f.o.b. price are "near" or not near the reference price. Preliminary results suggest weekly Florida shipments of fresh tomatoes are more own-price elastic when Nogales f.o.b. prices near the reference price