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 25, 2013 7:08PM
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Tomatoes are already expensive off-season, so don't pretend anybody is selling them for $1.25 a pound in January.   Also, Walmart's tomatoes are no tastier than anybody else's.  People need to start eating seasonally and locally, and supporting local farmers and growers.  There are foods that should be eaten in the summer and foods that should be eaten in the winter.  That's not to say that you never allow yourself an orange in the winter, but slow down on the foods that aren't local and quit eating foods that the U.S. is subsidizing some foreigner to grow.  Why would we be doing that when so many farmers in the U.S. are losing their land, and so many people in the U.S. are hungry?  Aren't we feeding enough Mexicans on this side of the border?  I am so tired of the United States throwing our tax dollars over our borders while the Americans who paid the taxes don't get anything.  We do not need cheap, mushy tomatoes that taste like nothing.  Walmart is not looking out for you and me.
Jan 25, 2013 6:35PM
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Guess I'll get some tomato plants started indoors, so they'll be ready to plant outside by spring.  I'm already sick of shocking high prices at the stupidmarket
Jan 25, 2013 7:41PM
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I grow my own and can'um for the winter
Jan 25, 2013 6:14PM
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Maybe Domestic Tomato farms can try sending their product to another country? How about some foreign trade here? I tell you what, I'm sick and tired of hearing the complaining that goes on becasue we can't compete. We can't compete, because we are spoiled brat babies with greed that is out of control!
Jan 25, 2013 7:01PM
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Going to our local farmers market, and living close to NJ, will give us plenty of tomatoes I am sure! Another way to support our local farmers!!  Thank God we still have them!!!
Jan 25, 2013 7:15PM
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No imports from Mexico of any type should be allowed in this country.  Politicians do not seem to understand that the United States cannot compete with third world counties.  We pay our citizens on welfare more than a highly paid Mexican worker can earn.  We don't live on a dirt floor or eat only beans and rice.  Get with it.  Ban Mexican products and then deport the Mexican criminals living in the US illegally.  When they leave they will take their illegal children who in error were given US citizenship.  These people thrive on America,  They get a minimum wage job and never even show an interest in becoming a citizen since their kids can collect welfare and Medicaid.  If an American is caught in Mexico and is in that country illegally he is sent to jail.  Come on Obama throw them out.  Put American to work.
Jan 25, 2013 6:52PM
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Tomato plants are easy to grow and have ridiculously high output. With two or three plants you'd have more tomatoes than you'll know what to do with. Share em with neighbors. Donate them to a local food pantry and help feed the poor.

Just don't plant in your front yard. Some cities have ordinances against planting in your front yard because.... nanny state. Also, planting in your front yard, you'll have people stealing them and kids destroying them for fun.
Jan 25, 2013 6:49PM
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Milk 5 bucks per gallon, food prices rising, wages stagnet....thanks Obama.
Jan 25, 2013 7:02PM
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Grow our own, they're easy, don't over water, they get black spots.
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 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 6:56PM
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What will happen is, most folks will not be able to afford them and they will rot in the stores...another act of stupidity being forced down our throats by this inept administration...
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 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 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 9:57PM
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I would be happy to pay more for truly USA products. 
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 6:59PM
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Would love to put in a garden, but our area is filled with deer, ground hogs,possums,etc, and even with a fence...they love the veggies, except for bell peppers and hot peppers!!

 

Jan 25, 2013 7:52PM
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Attack of the Killer Tomaaaatoooooes!!!
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