Tomato prices to rise if U.S-Mexico trade agreement ends, study says
Retail prices for tomatoes may double if a trade agreement between the U.S. and Mexico ends, according to a study released Thursday by a tomato importing group.
The possible price hike is the result of a brewing trade war between Florida tomato growers who accuse their Mexican counterparts of “dumping,” or selling their tomatoes below fair market value.
U.S. growers, represented by the Florida Tomato Exchange, have been lobbying to end a 17-year-old trade agreement between the U.S. and Mexico, which sets a minimum price for tomatoes.
According to the study, released by the Fresh Produce Assn. of the Americas, prices for various tomato varieties will rise between December and May if Mexican imports are excluded from the U.S. market.
Grocery shoppers will be hit with sticker shock when picking out various tomatoes, the study reports.
The price of hothouse round tomatoes, for instance, is projected to rise from $2.02 per pound to almost $4 a pound. Roma tomatoes would increase from $1.25 per pound to $3.96 per pound.
The price study was compiled by Chicago-based consulting firm Nielsen Perishables Group.
The Fresh Produce Assn. of the Americas opposes the ending of the trade agreement.
In the last decade, Mexican growers have ramped up fresh tomato production. In 2000, fresh tomato exports totaled $412 million; in 2011, that figure jumped to $1.81 billion.
U.S. importers of the Mexican varieties say they are tastier, cheaper and more plentiful year-round. The Florida growers contend Mexico low-balls its prices and makes fair competition impossible, and they asked the U.S. Commerce Department to intervene.
In September, the U.S. Commerce Department filed notice of intent to grant the Florida growers’ petition, a move that will allow them to formally accuse Mexican producers of illegal dumping. The decision, though preliminary, infuriated Mexico and a host of U.S. companies supporting the Mexican tomato, including major grocery and restaurant chains and California importers.
The department is expected to issue a final ruling later this year.
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