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Tomato tariff drama having little effect on the market

tomato crop 6-4-19

It’s been an eventful spring for the tomato market as Florida and Mexico have been sparring in both the media and the courts.

The tomatoes are seeing normal conditions heading into summer, with prices generally just over $10 a box, from both Mexico and Florida, as the deal transitions into the north part of the state and up the East Coast.

“We’re just getting going this week in North Florida and South Georgia, and we’ll be going hard by Friday and the weekend,” said Graves Williams, president of both Gadsden Tomato Company BB #:119688 and Quincy Tomato Corp, Quincy, FL, on June 4.

He said his companies operate on 700 acres, growing round and Roma/plum tomatoes.

“We’re not seeing the Mexican duty have much affect on prices,” he said.

USDA’s Agricultural Marketing Service reports June 3 prices of $12 for size 5×6; $14 for 6×6 and $14 6×7 for 25-pound cartons of mature greens from Florida and South Carolina.
Vine-ripes from Mexico ranged from $8-13 per carton on all sizes.

Williams said he’s seeing prices more in the $10-12 range, which is close to Florida growers’ break-even price.

From the Mexican import perspective, Jimmy Munguia, general manager for Del Campo Supreme Inc. {{BB #163269}} Nogales, AZ, said the market has been sluggish as the volume transitions from Sinaloa and Sonora to Central Mexico.

“We will probably see an increase in prices as Sinaloa slows down,” he said on June 3. “There’s not much Roma tomatoes yet in the U.S.,” as growers in California, the East Coast and Midwest are still several weeks away from strong volume.

Munguia said the 17.5 percent tariff imposed on Mexican tomato imports since the end of the suspension agreement has caused imports to drop slightly because importers must make sure they have enough cash for the deposit for the duty.

“Your ability to ship is based on having the liquidity to go forward,” he said.

Williams said another aspect to the end of the agreement is there’s no longer a floor price on Mexican tomato imports.

“I think it’s good because they’ll have to pay the tariff, and (the Department of Commerce) will be able to track the shipments better,” he said.

For the long-term look, Aaron Aliotti wrote in Pro-Act’s market report BB #:141746 May 29, “Supply will remain diminished until Mid-July when eastern regional programs begin production. Grape and cherry tomato volumes and quality have been up and down due to weather as most growers approach the end of their crops in the central portion of Florida.

“South Carolina is forecasted to begin harvesting a new crop as soon as next week and should alleviate some of the softness and splits currently in (packouts) this week. The Quincy districts in North Florida and South Carolina that are beginning next week are forecasted to run through the July 4th holiday. Tennessee is forecasted to begin operations near July 10th, shortly followed by Virginia and smaller eastern seaboard deals.”


Greg Johnson is Director of Media Development for Blue Book Services