Importers opposed to a draft suspension agreement with Mexico that sets higher floor prices on tomatoes say its consequences will go beyond problems growers may face moving their crops during peak production times.
The U.S. Commerce Department took comments on the plan through Feb. 11; a final agreement is due March 4.
Among the changes, greenhouse tomato reference prices would rise from 21.6 to 41 cents per pound in winter, and from 17.2 to 32.5 cents a pound in summer. Increases for open field product would be smaller.
Criticism of plan
“This decision is short-sighted,” said Marty Mazzanti, board chairman for The Produce Exchange, a Livermore, Calif.-based distributor and shipper with facilities in Nogales, Ariz.
“If the market on romas is $8 to $10 for much of the season and the minimum we can go to is $8 or $8.30, our ability to inspire a retailer to promote in peak will be difficult,” he said. “And if promotions are 10 to 30 cents higher at retail, then movement and overall consumption are going to be less. It adds fuel to the fire.”
But the real fire, as Mazzanti sees it, lies beyond the current season. He fears gaps — not just between deals or planting cycles — but between years.
Higher minimums won’t boost growers’ average price per box, he says, because profitability also depends on total boxes sold. That average and total determine next year’s plantings.
“Low production during the first and last few weeks of a production cycle, or in weather gaps in the middle, will be lower still the next year,” Mazzanti said. “If there’s a freeze or hurricane, in past years there would have been more supply from less affected growers.
“It kept the nation supplied with expensive tomatoes, but still, we had them. That will be impacted. A retailer doesn’t want to put something on promotion and not be able to cover it, or have to cover it at twice the price.”
Input from Florida, Mexico
By contrast, the Florida Tomato Exchange and Certified Greenhouse Farmers offered “tentative support” for the draft agreement in a joint statement. The Florida industry has been pursuing regulatory action on Mexican tomatoes.
“I wish I shared their optimism, but I’m on the other end,” said Lance Jungmeyer, president of Nogales, Ariz.-based Fresh Produce Association of the Americas. “Their members are getting protected and mine are going to be restricted.”