Why tomato prices may soon double

Costs could soar if the Obama administration ends a trade deal with Mexico after Florida farmers complain.

By Jason Notte Jan 25, 2013 5:27PM
Tomatoes in a market (Dina Marie/Flickr/Getty Images)A dispute between the U.S. and Mexico over a 16-year-old tomato trade deal may end up squeezing consumers and leaving growers and politicians red-faced.


Whether you call it a "tomato cliff" or "peak tomato," U.S. business groups warn that tomato prices could double if the Commerce Department follows through on a threat it made in September to end the nation's tomato agreement with Mexico, according to Reuters. The Commerce Department and U.S. tomato growers, especially those in Florida, counter that Mexico is selling its tomatoes here below cost and driving American tomato producers out of business.


According to data compiled by Nielsen's (NLSN) Perishables Group and released to the Los Angeles Times by the Fresh Produce Association of the Americas, prices for various tomato varieties will rise by December if the Commerce Department decides to exclude Mexican imports from the U.S. market.


Hothouse round tomatoes, for example, will jump from $2.02 per pound to almost $4 a pound. The price of smaller Roma tomatoes would increase from $1.25 per pound to $3.96 per pound. As a result, the cost of tomato soup, pizza and even sandwiches at Subway -- which faced similar issues in Australia last year -- would skyrocket.


Florida growers aren't buying it and say that the deal that was supposed to protect them from cheaper Mexican tomatoes has instead bolstered the Mexican tomato industry. In 2000, Mexico's fresh tomato exports totaled $412 million; by 2011, they increased to $1.81 billion. As the Florida Tomato exchange told National Public Radio, Florida tomato sales have dropped to as little as $250 million a year since the deal began.


"The Mexican industry has for significant periods dumped product into the U.S. market during the 16 years of the agreement," Reggie Brown, head of the Florida Tomato Exchange, told NPR. “What would happen if the suspension agreement went away is free trade would truly exist between Mexico and the U.S. in the tomato industry.”


Mexico and its supporters, including big produce buyer Wal-Mart (WMT), say their tomatoes are tastier, cheaper and more readily available year-round, while denying that Mexico is dumping them on U.S. markets.


"It would be impossible to sustain hundreds, perhaps thousands, of Mexican tomato companies for years on end selling below their cost. They wouldn't be able to do that,” says Lance Jungmeyer, president of the Fresh Produce Association of the Americas.


The Commerce Department will make its final decision in May, but it's not likely to squash tensions with either side. If it keeps the tomato deal in place, it could potentially kill jobs in a state that's already politically sensitive. If it kills the deal, it could start a trade war with Mexico that would subject American corn, meat and other exports to unwieldy tariffs there. In either scenario, it's American farmers and the consumer's grocery budget that end up getting squeezed.


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113Comments
Jan 26, 2013 10:40AM
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This falls under WGS.   we have  more then enough production + canadian  summer & hothouse tomatoes are better anyway.
Jan 26, 2013 8:49AM
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I live in an apartment and have been growing ripe, plump and juicy tomatoes for years in 3 gallon pots. I rarely buy tomatoes. I grow enough tomatoes and peppers for 6 people in these few pots that I have. They are one of the easiest vegies to grow. I have a friend who harvests tomatoes now every year after I showed her how.  She was so bad at growing plants that she would even kill her plastic house plants.

It's fun, easy and rewarding.

Jan 26, 2013 5:21AM
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Wonder who is doing all the hard work in Florida growing tomatoes for a handfull of wealthy owners- probably sub-minimum wage illegal immigrants. Let the Mexicans grow our tomatoes in Mexico and send our kids back to school to prepare for better paying jobs further up the food chain.Super market tomatoes are tasteless no matter where grown- grow your own as hobby.
Jan 26, 2013 12:45AM
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Never let a good crisis go to waste. Anything at all to help take this nation down. The American people vs it's own gov along with the rest of the world is like a newborn fawn amongst a pack of hungry wolves. We don't stand the chance of a glass of ice water in hell.
Jan 25, 2013 11:57PM
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Why milk prices will double? What's next?
Jan 25, 2013 11:24PM
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I have a nice small garden.Unfortunately I cannot raise a thing between November and April in my area.
Jan 25, 2013 11:06PM
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Here's the problem....our government has sold us out in order to kiss foreign behinds in these trade agreements and now American companies can't fairly compete.  It is happening with everything from manufacturing to vegetables and fruit. 
Jan 25, 2013 10:49PM
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  Don't buy anything from Mexico...It just might create insentive to grow EVERYTHING here,and no more farm subsides  If you dont plant some kind of crop on your land you don't get PAID, this should stimulated the economy....yea right....who am i kidding, probibly not a good idea???...
Jan 25, 2013 10:13PM
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Someone:

 

The "SUBJECT" is tomaotes.NOT Politics.The DAMNNN election is OVER.One would think, that some where in time.People such as YOU would LEARN a thing called "STAY ON THE SUBJECT".On the subject!American Tomato farmers do not ship palatable tomatoes and other produce.What THEY want is a MONOPOLY on them so they can pile up the $$ as this article has correctly indicated.As other INTELLIGENT people on this board.I raise my OWN every Year along with other truly fresh veggies.ALL in a 20ft X 10ft plot.Lots can fit into such a small space IF planted correctly.Also.To those that plan to "grow their own" try fruit trees and berries.You will love raising them especially the harvest.There are miniture fruit trees of all varities.Lastly.Try some grapes.They are easy to grow and maintain.

Jan 25, 2013 10:06PM
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Oh, why not! Everyone else is getting a bite out of the working class, (thanks to obuma,) we might as well pay higher food prices and keep the grower's happy............even though they employ illegal's to work their crops...........(for pennies!)

So, I say, "bring it on!"

P-S- China's "eating our lunch!"

Jan 25, 2013 10:03PM
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Simple enough. If they raise tomatoes to 4 something per pound I won't buy tomatoes;I'm not paying as much or more per pound for a tomato as I pay for some meat.This happened a few years ago, onions almost tripled in price and damned if I wasn't able to live without onions until the price went back down. The average paycheck (if you are lucky enough to have one) has stagnated or decreased but produce, meat, fuel, etc. , increases. You want prices on an item to drop, don't buy it,when there's a glut its amazing how quickly the price will go back down.
Jan 25, 2013 9:57PM
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I would be happy to pay more for truly USA products. 
Jan 25, 2013 9:30PM
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FYI-- the  products at the dollar  stores  have larger  sizes of products.

exmaple  --AJAX -- Krogers $2.49   ---> 20 oz

                                  Dollar TREE   $1.00  ----> 32 oz

 

just watch the product sizes when shopping

 

a pound cake  are  no longer a pound  they are 10 oz. .

                            

Jan 25, 2013 9:08PM
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I didn't read the story but they don't need reasons to raise prices. They raise everything. Taxes, gas, food....just keep squeezing until we're broke.
Jan 25, 2013 9:08PM
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Most grocery store tomatoes suck. If they would grow a tomato that tasted good and was actually ripe, I would be glad to pay $3 a pound. Don't blame Mexico, blame the sorry product you deliver to the US customers.
Jan 25, 2013 8:56PM
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Tomatoes can be  grown at your home, apartment or town house Balcony, or small back yard. Grow 6 plants if you have the space and can any extra's, Cost for six plants $ 3.25. Cost for seeds $1.75. Plant 10 to 20 days apart for outside. Nobody should have to pay  $3.96 a pound. Three tomatoes is about a pound. Six healthy plants will produce about 65 pounds of tomatoes during a 6 months season at a minimum of cost.  Can the tomatoes you do not use so you even have them after the season. Are you all crazy? Then don't complain. I live in a townhouse and can easy grow about 12 plants some hanging down. Grow some Bell Peppers, Rosemary, Basil, and some other herbs. Take your old tires. put a bag of topsoil in it, plant 5 potatoes. When they come above ground, lay another tire on top put topsoil in it and plant 5 tomatoes, When they come up do the same thing again. Up to 5 tires. Total space needed less then one square yard. Harvest bout 100 pounds. If you are fortunate to have a back yard of about 1200 sq ft. You as a housewife or houseman can quit your job. Give up your second car and you can grow enough you will survive each season. Enyoy your live. Bingo

 

Jan 25, 2013 8:55PM
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Politicians have no reason to worry. It is not their money and they are just great at spending other peoples money. The only other things it will effect will be Pizza and Ketchup and who uses any of that
Jan 25, 2013 8:22PM
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In a effort to leave a legacy as a world leader, Scrotus will cave in on Mexico.  His agenda is to make us all equal.  All poor but equal.
Jan 25, 2013 8:21PM
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Doubling the price of tomatoes that taste like cardboard shouldn't be a problem. Don't buy the damn things, grow your own in a four foot square plot when they are in season. I don't buy the fraudulent tomatoes of the off season.
Jan 25, 2013 8:13PM
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Way to go Obummer,twisting the dials and jerking the handles on machinery you don't know how to operate.Maybe you should save the motorboat sound to use on that hogger you're married to.
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