Distribution channels in the United States of America for Mexican fresh fruits and vegetables

Historically, agricultural trade relations between Mexico and the United Sates have been shaped by the interdependence of the production and consumption patterns in these two countries. The study of the distribution of Mexican produce in the San Antonio Produce Terminal Market shows that Mexican produce was distributed in the U.S.A. long before the North America Free Trade Agreement came into force in 1994. And the opportunities that NAFTA may bring to Mexican growers will in fact depend more their previous relationships with American distribution firms and the position of these firms in the U.S. market than on anything new in the treaty. The study also shows that Mexican produce flows through U.S. marketing channels which form a network of specialized firms coordinating their activities in an environment of cooperation, rivalry and power. The distribution firms' environment and business strategies have evolved into a hierarchical business structure, now concentrating power on the retailers, mainly supermarket chains. These require a constant supply of large quantities at low prices, but still coexist with small and medium sized firms supplying niche markets. The distribution of Mexican produce in the U.S. has become one of the strategies of American firms to survive in a competitive market, and an opportunity for Mexican firms wishing to expand their market. Finally, Mexican produce is distributed through different marketing channels depending upon its specificity. This means that produce that goes to the mass consumption market, such as watermelons and tomatoes imported through Texas, is mainly controlled by American distribution firms. These firms have longstanding relationships with Mexican producers from when they first expanded they growing areas into Mexico in the 1970s. Whereas Mexican ethnic produce and specialty produce now moves through distributors who supply niches in the market. Whatever the produce, the construction of an export channel and business opportunities for Mexican growers will depend on their building up business and social networks in the upper nodes of the distribution channel, and on the trustworthiness of their relationships. This way they can lessen the marketing risk which is still high for both American and Mexican growers.