Getting the ducks in a row

02/12/2013 02:47:00 PM
Jay Martini

Guest blog post by Jay Martini

 

Well...don't blink, but the comment period has ended.

Any tomato man worth his sea salt had nine whole days to read the 31-page draft text of the 'Suspension of Antidumping Investigation: Fresh Tomatoes From Mexico', absorb and understand it, then formulate and submit a response by 5:00 PM Monday to the U.S. Department of Commerce - International Trade Administration through a reportedly frustrating and bureaucratic online mechanism.

That's a tall order, folks. Doesn't leave much time for much else, like sleeping or running a business. Almost makes you think this was slated to be fast-tracked and they didn't want too many comments. But I'd have to be paranoid to think that.

It will be interesting to see if: 1) the comments are ever displayed publicly, with attribution, and 2) from the comments there will be an actual amending of the draft for the final agreement. But more critical, of course, are the endgame ramifications of the price increases to the floor, or 'reference' prices.

When it sunk in that minimums were being jacked up by a minimum of 48% on a per pound basis for round tomatoes in the winter, and there wasn't word one in the draft text about regulating supply at shipping point, it was apparent that this was the kind of scenario that would have master economist Alan Greenspan repeating the phrase 'irrational exuberance' like he did in 1996, well ahead of the dot.com crash.

Interestingly, though, many veteran salespeople at both ends of the tomato chain who ordinarily would welcome dictated higher prices with open arms, are at best apprehensive about monkeying with the delicate supply/demand balance that currently exists in the tomato industry. They care about movement, period. And they can only hope that potential violators of the new agreement down the line will be dissuaded from doing so unless they want to feel the wrath of PACA (and maybe civil) sanctions.

In the meantime, however, look for the tomato market to be a bit jumpy, shall we say, in the days leading up to March 4, as shippers and buyers alike begin jockeying for position with their respective inventories before they go through the looking glass, together.

Later,

Jay


Chicago-based Jay Martini is a contributor of the Fresh Talk blog and has been a tomato broker since 1980.



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