Market window analysis for selected vegetables for Southern New Mexico

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Market Window Analysis for Selected
Vegetables for Southern New Mexico1
Research Report 775
Sara Blandon and Constance Falk2
Agricultural Experiment Station • College of Agricultural, Consumer and Environmental Sciences
1This study was funded by the Risk Management Agency (RMA) OGC Grant No. 20050878 and the New Mexico State University Agricultural Experiment Station.
2Respectively, Project Official, Oikocredit, Estelí, Nicaragua; and M. Eugene Sundt Honors Professor, Department of Agricultural Economics and Agricultural
Business, New Mexico State University (MSC 3169, P.O. Box 30003, Las Cruces, NM 88003; phone: 575-646-4731; cfalk@nmsu.edu).
Abstract
The purpose of this research was to analyze regional
wholesale market window opportunities for south-ern
New Mexico-grown lettuce, carrots, broccoli,
and spinach. A market window opportunity was
identified as the period when average prices exceed
production, marketing, and transportation costs.
Market windows can be used as a screening tool to
analyze which vegetables are possible alternatives
for diversification. Wholesale markets examined for
the market window analysis included Dallas, At-lanta,
and Chicago.
The best opportunities for potential markets
found were carrots in the Dallas and Atlanta mar-kets,
followed by spinach in the Dallas market and
leaf and romaine lettuce in the Dallas and Atlanta
markets. Price variability was the lowest for carrots
and highest for head lettuce. Vegetables with the
best market opportunities should undergo further fi-nancial
feasibility analyses, including farm-level and
packing house costs and returns, analysis of price
volatility based on supply and demand, evaluation
of competitor supply, and planting schedule trials
(possibly using row covers) to extend the harvest.
Introduction
Most commercial vegetable production in New
Mexico is concentrated in the southern counties
where agronomic and weather characteristics are fa-vorable
for vegetable production. Southern NM has
moderate temperatures, providing new crop oppor-tunities
for growers (Falk et al., 2010). Although
NM has good prospects for agricultural diversifica-tion,
urban expansion reduces agricultural resourc-es.
New Mexico’s population increased 20.1% be-tween
1990 and 2000 (U.S. Census Bureau, 2000).
Farmers increasingly must compete with urban and
industrial demands for water and land resources.
New Mexico’s total cash receipts from the sale
of farm and ranch production were an estimated
$2.175 billion in 2007, 25% of which was gener-ated
by crop sales, although cropland represented
only 5.4% of all land in farms (USDA-NASS,
2007a). The top commodity categories in terms
of sales were milk and dairy products, cattle and
calves, other crops and hay, grains, oilseeds, dry
beans, and dry peas (USDA-NASS, 2007a). Total
statewide acres of vegetables harvested in 2007
were 35,926, a slight increase from the 2002
census of 33,848 acres of vegetables harvested
(USDA-NASS, 2007b).
The USDA tracks vegetable acres produced,
irrigated, and harvested separately, since not all
acres irrigated or in production are harvested.
Nevertheless, Doña Ana County was the top
vegetable-producing county in the state in 2007,
with 10,118 acres, or 27% of the 36,933 acres
of vegetable production statewide, followed by
9,555 acres in San Juan County, 6,449 acres in
Luna County, and 2,878 acres in Curry County
(USDA-NASS, 2007c). In Doña Ana County, the
number of farms producing vegetables increased
from 107 to 118 from 2002 to 2007, although
the acreage fell slightly from 10,446 acres in 2002
(USDA-NASS, 2007c).