Retail prices for tomatoes could rise significantly if supply from Mexico drops Photo by Thinkstock

Retail prices for tomatoes could rise significantly if supply from Mexico drops. Photo by Thinkstock

Trade Group Warns of ‘Tomato Cliff’

WASHINGTON — A trade group argues that tomato prices would skyrocket if the Department of Commerce goes forward with terminating a trade agreement with Mexican tomato growers.

“A ‘tomato cliff’ is fast approaching,” said Lance Jungmeyer, president of the Fresh Produce Association of the Americas trade group, in a press statement. “For all practical purposes, time is running out for the U.S. Department of Commerce to reach an agreement with Mexican growers on the floor price for imported fresh tomatoes.”

After domestic tomato growers filed a petition last summer, the Department of Commerce made a preliminary decision to terminate its current antidumping investigation and 16-year suspension agreement that established a floor price for Mexican tomatoes.

Domestic tomato growers contend that the agreement is outdated and the Mexican tomatoes are being sold at unfair prices, harming U.S. growers.

The Florida Tomato Exchange told Reuters that it wants to terminate the current agreement in order to file a new antidumping investigation.

According to the Fresh Produce Association of the Americas, a new antidumping investigation could result in Mexican growers paying significant duties at the border, which, they argue, would put a big burden on suppliers and cause many to stop exporting their product to the U.S.

“In the end, if there is a punitive duties or prohibitive trade action against Mexican tomatoes, the U.S. consumer is the one that’s going to lose,” Jungmeyer said during a press call.

“Retailers will have to pay more for tomatoes and they’ll either have to pass on those prices or choose not to sell as many tomatoes.”

If the Mexican tomato supply in the United States decreased by 50% in the winter months, then the retail price of tomatoes would jump up by 51%, according to a study by the Nielsen Perishables group commissioned by the Fresh Produce Association of the  Americas.

Mexico provides about 40% of tomatoes sold in supermarkets during the winter months.

The study also found that a 50% decrease of Mexican tomatoes from June to November months would result in a 26% increase in retail prices.

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