Abstract
Agricultural producers face seasonal constraints on production that limit their ability to market fresh produce year-round. Geographic diversification from the Northern to the Southern Hemispheres offers alternative production plans by allowing the firm to shift production capabilities across complementary climates. Diversification strategy may work against the producer if market supply levels increase enough to lower prices and significantly reduce off-season price uremia. Profit potential of North-south international geographic diversification in table grapes is a function of (i) distinctiveness of markets, as measured by market integration tests, and (ii) the trade environment (i.e. tariff rates). Market integration for domestic and imported fresh table grape markets is evaluated using a probabilistic framework, resulting in estimated probabilities of integration for the California-Chile (Los Angeles, CA) and California-Chile (Philadelphia, PA) markets of 9% and 19% respectively. A simulation model incorporating the probabilities of integrated markets suggests that Northern Hemisphere-based firms can profit from diversifying to the Southern Hemisphere.
Krueger, Angela Martene (1999). Geographic diversification strategy: an application to the California - Chile table grape market. Master's thesis, Texas A&M University. Available electronically from
https : / /hdl .handle .net /1969 .1 /ETD -TAMU -1999 -THESIS -K77.