( File photo )

Consumer prices for some tomato varieties from Mexico could initially rise 40% in the U.S. when domestic supplies are low, according to an analysis on possible effect of duties on imported tomatoes when the Tomato Suspension Agreement is dropped in early May.

According to the Arizona State University analysis, commissioned by the Fresh Produce Association of the Americas, which represents imported Mexican produce, prices could initially rise 40% through the end of the year. The university used retail data from Neilsen.

“This makes no sense,” Lance Jungmeyer, president of the FPAA, Nogales, Ariz., said in a news release. “Most Americans crave certain kinds of vine-ripened tomatoes, and now they are going to have to pay more, significantly more.” 

Concerns from seasonal U.S. tomato growers in Florida and other states led the Department of Commerce to announce it would drop the suspension agreement on May 7, which would allow an anti-dumping investigation to restart.

Duties on imported Mexican tomatoes would reduce supplies in the U.S. and lead to higher consumer prices, according to the analysis, led by Timothy Richards, Morrison Chair of Agribusiness at Arizona State University. The analysis focused on several market scenarios involving tomatoes-on-the vine, field/beefsteak, roma and vine-ripened tomatoes, according to the release.

“In general, tariffs levied on imports of fresh produce from Mexico are borne disproportionately by U.S. consumers,” Richards said in the FPAA release. “In this analysis, we show that retail tomato prices in the U.S. may rise by an average of approximately 40% if tariffs remove a substantial proportion of the Mexican supply during the critical winter-tomato supply period.” 

If duties are imposed and an event causes U.S. tomato production to dip lower, such as weather or labor supply issues, some prices could rise up to 85%, according to the analysis.

“The unmistakable conclusion of the study is that withdrawing from the Tomato Suspension Agreement will cost American consumers substantially more for a product that has become a major part of their daily diets,” Jungmeyer said in the release. “Americans can’t afford this kind of sticker shock.” 

For a copy of the economic analysis, contact Erika Dominguez at Erika@freshfrommexico.com, or 520-287-2707. 

graphicScenario ASU

Letter to Commerce

Members of the Arizona Legislature’s House Committee on State and International Affairs recently sent a letter to Commerce Secretary Wilbur Ross on the issue at the request of the FPAA. The letter asks the Commerce Department to renegotiate the agreement.

FPAA Tomato Division Chairman Jimmy Munguia and Garrick Taylor from the Border Trade Alliance recently testified to Arizona lawmakers on the effects of the loss of the suspension agreement and implementation of duties.

Related articles:

Viva Fresh Expo features tomato agreement discussion

 
Comments
Submitted by QTomato on Wed, 04/24/2019 - 15:59

This is such an over-played story line. The sharp increases happen more in part because the Florida farmers are trying to catch up on the unnaturally suppressed markets caused by Mexico. They get their "throats stepped on all season" and when they get a chance to breathe, they take big gulps.

Bottom line is there enough viable farming in Florida to be the primary supplier of the country in the winter months (or there was!!!!). Due to NAFTA, Florida farmers as whole have been relegated to a supplementary supplier role.

Anyone... I mean anyone.... competing against Mexico in agriculture knows the facts.

Submitted by QTomato on Wed, 04/24/2019 - 15:59

This is such an over-played story line. The sharp increases happen more in part because the Florida farmers are trying to catch up on the unnaturally suppressed markets caused by Mexico. They get their "throats stepped on all season" and when they get a chance to breathe, they take big gulps.

Bottom line is there enough viable farming in Florida to be the primary supplier of the country in the winter months (or there was!!!!). Due to NAFTA, Florida farmers as whole have been relegated to a supplementary supplier role.

Anyone... I mean anyone.... competing against Mexico in agriculture knows the facts.

Submitted by Russell Costanza on Wed, 05/08/2019 - 11:02

This is a one sided report favoring of the Mexican grower. Reverse the situation and the American grower is made equal in the US marketplace. The markets the American growers developed long before NAFTA!

Submitted by Russell Costanza on Wed, 05/08/2019 - 11:02

This is a one sided report favoring of the Mexican grower. Reverse the situation and the American grower is made equal in the US marketplace. The markets the American growers developed long before NAFTA!