U.S. DEMAND FOR MILD COFFEES: IMPLICATIONS FOR MEXICAN COFFEE

Abstract

While the U.S. remains the world's largest coffee importer, consumption of the good has dramatically changed in the past few decades. This study evaluates the influences of U.S. consumption habits, prices of coffees by origin, prices of near substitutes, U.S. income, the ICA, and NAFTA on U.S. consumption of three categories of Arabica coffee- Colombian milds, Mexican and other milds, and Brazilian. Results indicate that U.S. consumption of Mexican coffee is sensitive to its own price; price of Colombian coffee, which appears to be its largest competitor; and ICA controls. Under NAFTA, Mexico appears well positioned to gain increased U.S. market share of shade-grown mild Arabica coffee.