With negotiations between Mexican tomato growers and the U.S. Commerce Department ongoing and apparently seeing some progress, the rhetoric about the consequences of dropping a regulated price floor on imported tomatoes shows no signs of letting up.
Consumers could face sharply higher prices and reduced supplies if the U.S. government terminates a price agreement with Mexican tomato growers and then imposes antidumping duties, according to a new pricing study funded by Mexican tomato interests.
In September, in response to requests from the Florida tomato industry, the Commerce Department announced a tentative plan to terminate a minimum price suspension agreement with Mexican tomato growers that has been in place since 1996.
Since then, a variety of U.S. business, retail and food-producing organizations, including Wal-Mart Stores, National Restaurant Association and Food Marketing Institute, expressed support for retaining the U.S.-Mexico tomato trade pact. The Commerce Department has yet to take final action on terminating the suspension agreement but could do so by spring.
Study shows threat
Adding to the threat of a trade war is a new economic analysis from the Nielsen Perishables Group, paid for by Nogales, Ariz.-based Fresh Produce Association of the Americas, which represents importers of Mexican produce.
The study — at http://savemytomato.com — presents a sobering scenario based on the total or partial withdrawal of Mexican tomatoes from the U.S. market.
The study also looks at the potential market effect if U.S. tomatoes were removed from the market by a weather event at the same time Mexico was excluded.
The study is based, in part, on what happened in a wake of a February 2011 freeze, which greatly reduced Mexican tomato production.
“We found that if Mexican imports are excluded from the U.S. market, retail prices during the December-May timeframe can be expected to rise by 97.9% for hothouse round, 96.9% for hothouse vine, 61.3% for grape tomatoes, 217.2% for roma, and 52.1% for field tomatoes,” Tim Richards, Morrison Chair professor of Agribusiness at Arizona State University, wrote in the report.
A teleconference about the new research Jan. 24 featured several speakers supporting the current tomato agreement, including Lance Jungmeyer, president of the FPAA; Rick Van Schoick, director of the North American Center for Transborder Studies at Arizona State University; Patrick Kilbride, senior director of the Americas for the U.S. Chamber of Commerce; and Jaime Chamberlain, president of JC-Distributing, Nogales.