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United States Department of Agriculture

Agricultural Research Service

Title: Establishing Cucumber Production in Lesser Developed Countries: An Absolutecost Advantage of Mexico Versus Hispaniola Producers

Authors
item Frenz, Byron - NATURAL TECH MADISON WI
item STAUB, JACK

Submitted to: HortTechnology
Publication Type: Peer Reviewed Journal
Publication Acceptance Date: April 20, 1999
Publication Date: N/A

Interpretive Summary: Cucumber could be used as a model horticultural crop for the establishment of import industries because of the U.S. processing industry's year-round requirement for raw product, the crop's growing requirements and its labor intensive production demands. Since winter production of cucumbers (November-April) is not possible in the U.S., processors must contract with foreign growers to meet consumer demands for fresh pack and refrigerate products. Because U.S. processors rely heavily on imports from Mexico, there is a single source risk of cucumber imports during winter months. Sudden cost increases occur when this primary supply of cucumbers is periodically interrupted. Thus, a study was initiated to determine whether processing cucumbers could be competitively grown and transported to U.S. processors from Hispaniola (Haiti & Dominican Republic). Experimentation lead to the identification of the critical influences of market prices, costs and conditions for the financial feasibility of establishing a processing cucumber industry on Hispaniola. Comparative evaluation indicated that significant variation in total cost was caused by fluctuations in transport, tariffs, and labor costs components. The causes of variation in transportation and costs were distance, method (sea, air, truck), competitive demand and shipping frequency, consistency, and capacity. Data provided will allow U.S. processors to more closely evaluate the financial risks involved in developing secondary sources for production on Hispaniola to decrease their investment risk.

Technical Abstract: Grocery markets in the U.S. require a continuous supply of fresh vegetables and fruits. During winter months a substantial volume of various horticultural products are imported to the U.S. from the Caribbean and Central and South America. U.S. cucumber processors who market fresh-pack and refrigerated products require raw product daily to meet consumer demands. Mexico serves as a single-source supplier to all U.S. processors during this period, and thus Mexican production represents certain price risks. U.S. processors would consider other growing regions to reduce these risks if financially attractive alternatives could be identified. Therefore, a project was initiated to acquire information on production and export costs in the Dominican Republic and Haiti (Hispaniola), and compared to those to Mexican and U.S. production and transport costs. Experimentation lead to the identification of the critical influences of market prices, costs and conditions for the financial feasibility of establishing a processing cucumber industry on Hispaniola. Comparative evaluation indicated that significant variation in total cost was caused by fluctuations in transport, tariffs, and labor cost components. The causes of variation in transportation costs were distance, method (sea, air, truck), competitive demand (volume), and shipping frequency, consistency, and capacity.

Last Modified: 8/19/2014
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