Expectations for prices and production of organic vegetables: the case of Mexico
DOI:
https://doi.org/10.29312/remexca.v16i2.3396Keywords:
conventional products, organic products, price differentialAbstract
As the supply of organic products in the market increases, their price tends to decrease unless the demand for these products increases and consumers are willing to pay an additional price compared to the conventional product. This research aimed to measure the trend of the premium of organic vegetables over the conventional vegetables and to estimate the growth of the vegetable market based on the introduction or substitution of organic products by conventional ones in Mexico. For the calculations, continuous-time differential equations were used to estimate the production function and projections with series from 1990 to 2020 for conventional products and from 2015 to 2020 for organic products. The premium of organic products decreased over time with a tendency to equal that of conventional products. Asparagus, strawberry, and saladette tomato expanded the market with their entry, mainly the export market, because they had a greater competitive advantage. In contrast, broccoli, zucchini, romaine, pickle cucumber, and husk tomato did not expand the market, which means that they replaced the conventional product. It is concluded that the price differential of organic products decreases over time as it equals that of conventional products and highly competitive organic products expanded the market.
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