I just Googled the expression ?tomato shortage? and over 3500 references came up. Clearly the world thinks there is a tomato shortage, but in fact there is not. Indeed, I have made several trips to the grocery store lately and there were plenty of tomatoes right there in the produce section where they usually are kept. I could have bought all the tomatoes my heart desired?but at that moment my heart didn?t desire any because the price was about two and a half times higher than usual. Tomatoes have become scarcer and as a result the price has risen but miraculously there are no shortages.
For economists the term ?shortage? has a specific definition?it means that people cannot buy all of a product that they want at the offered price. There were shortages of gasoline during the 1970s; there were shortages of a whole range of products during WWII?most famously petroleum products?like gasoline and rubber tires?and nylon stockings; and there were shortages of consumer products like toilet paper and blue jeans in the former Soviet Union. But there are no shortages of tomatoes in the U.S. today. No one is standing in line to buy tomatoes and the government isn?t issuing tomato rationing coupons. The miracle is that of the free market. In spite of the fact that there has been a massive decrease in the quantity of tomatoes that are available to the public, the public can still buy all the tomatoes it wants. The evidence for this is that there are plenty of tomatoes around to be bought. With the increased scarcity (not shortage) of tomatoes, prices have gone up. At the higher prices everyone is demanding fewer tomatoes. Amazingly, at the going price the amount of tomatoes available seem to be just right?the market is a beautiful thing.
By the way, the reason this didn?t happen with gasoline in the 1970s, nylons or tires during WWII, or toilet paper in the Soviet Union is because of government price controls?no other reason.