Opinion
Andy Nelson, Markets Editor In the first weeks of 2012, few people have been happy about the state of the U.S. tomato market.
Prices for Florida-grown tomatoes and imported fruit from Mexico have been at or near the basement price of 21 cents per pound set by a U.S./Mexico suspension agreement.
With ever-rising input costs, that’s not enough for growers to break even.
Meanwhile, shippers on both sides of the border are lobbing metaphorical tomatoes at each other, with the Floridians saying the Mexicans are saturating the market, and vice versa.
Some shippers of Mexican fruit, who acknowledge the undeniable increase in greenhouse production south of the border during the past several years, point out that not only a year ago, but a few weeks ago, tomato demand exceeded supplies.
Regardless of who’s rhetorical rotten tomato hits its target with the biggest splat, the fact remains: There really are no winners.
No winners, that is, as long as you don’t take into account those millions of folks who sit at the far end of the supply chain.
Usually they’ll answer to the name of “consumer.”
Fueling attraction
I was getting the retail take on The Great Tomato War of 2012 recently from Tommy Wilkins, director of produce procurement for Lubbock, Texas-based retailer United Supermarkets LLC.
I asked him if there was any silver lining to this, and he didn’t hesitate to answer.
“It’s a good time for consumers.”
Several growers I talked to praised the high level of retail support for ads during the current glut. United Supermarkets is one of them. In late January and early February the chain was running a two-fer on romas and field rounds — two pounds of fruit, one buck.
Consumers weren’t sacrificing quality for price. Just the opposite, actually. One of the ironies of the current oversupply situation is that only the best fruit is making it onto retail shelves.
And it is good, some of the best in years, shippers say.
So the U.S. fresh tomato consumer is in heaven, and the good news for growers, shippers and everyone else along the supply chain this side of the consumer is that eventually they’ll be warmed by some of those heavenly rays, too.
“As long as that retail push is on, maybe you can change the habits of some people,” Wilkins said.
In other words, there’s a decent chance the consumer who gets hooked on top-shelf tomatoes at two pounds for a buck will likely come back for more, even if she has to pay a bit more.
The iron rule of the fresh produce industry is that eventually she’ll have to pay more.
Then less again. Then more again. Mother Nature has a way of balancing out the highs and lows.
As for our new tomato-hooked consumer, she probably won’t care too much whether her fruit comes from Florida or Mexico.
What's your take? Leave a comment and tell us your opinion.
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Comments (1)
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Report AbuseAfter looking over the USDA report on national retail prices it appears as if some consumers are getting some benefit from rock bottom tomato prices...but certainly not all. Retail ad prices range from 1.47 to 1.56 per pound. Again, these are the "sale" prices. The stores that are not on ad in our region coninually hover around the 1.99/lb mark. How much are consumers really benefitting from this? More importantly, could the consumer benefit even more if retail pricing were more closely connected with their cost?