Tomato Prices and Market Structure in the Lower Rio Grande Valley of Texas

Excerpts from the report: The Lower Rio Grande Valley of Texas consists of Willacy, Cameron, Hidalgo, and Starr Counties. The Valley is a major commercial fruit and vegetable producing area. This report is designed to determine the degree of pricing efficiency in the fresh tomato market of the Lower Rio Grande Valley. Pricing efficiency is described as the manner in which the market converts prices at the f.o.b. level to prices paid farmers. Briefly the methods used in this study consisted of (a) sampling a large number of actual sales transactions at the f.o.b. and farm level, (b) estimating the actual relation between f.o.b. prices and prices paid growers, and (c) determining whether factors such as changes in the percentage of all shipments in each grade explain variations in the shipping-point margin. The structure of the market was considered also, since market structure can influence competitive behavior and hence the nature of margins