A few weeks ago, as I relaxed in my bedroom with my favorite issue of the Economist, I felt a sudden craving in my stomach for a Wendy’s Baconator hamburger and a chocolate frosty. Putting my nightly economics-based leisure time aside, I got in the car to get some food. Upon my arrival at the drive-thru window, I noticed a sign that read, “Wendy’s would like to inform you that tomatoes will only be available upon specific request, at a price of 25 cents. Thank you.” Hm. It seemed at the time that tomatoes had become a luxury, only available to those consumers willing to pay the big bucks of twenty-five cents for tomatoes on their burger. After some research, however, I discovered that the price change I perceived at that Wendy’s was not a matter of demand, but rather an outside effect on supply.
In March of 2011, cold temperatures in Florida and Mexico ravaged crops, tomatoes in particular. Freezing winter weather knocked out nearly 70% of Florida’s tomato crop. In Mexico’s largest tomato producing state, in which over 75% of their crop is exported to the United States, over 70% of that crop was gone after the winter months. Crop wipeout leads to shortages; shortages lead to increase in price. And, wouldn’t you know it, increase in the price of tomatoes leads to me having to pay a single quarter extra for the simple joy of having tomato slices on my Baconator sandwich.
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