This paper analyzes the evolution of agricultural export diversity for 22 countries of Latin America and the Caribbean between 1961 and 2002. Data from FAOSTAT for basic and process agricultural products were used to construct a modified Herfindahl (Simpson) index of product export shares that accounts for the correlation of product prices and places less weight on products with positively correlated prices. The recent pattern of diversification shows a systematic increase since the mid- to late-1980s, with a clear distinction between the patterns for South America and for Central America, Mexico and the Caribbean. The individual country changes, however, are heterogeneous and due to the country-specific initial mixes and subsequent changes the mix of export products. Instrumental variable estimation results show that changes in diversification have been positively related to country financial depth, extent of irrigation, and trade openness, and negatively related to price instability (inflation) and the size of government as a proportion of GDP. Notably, the level of a country's economic development is negatively related to agricultural export diversification.