Tomato agreement averts trade war but puts prices high

A pricing agreement recently reached could avert an all out trade war between the US and Mexico, but it does also mean that consumers are more likely to pay more for Mexican tomatoes.

The reference price in the draft agreement for Winter tomatoes is raised to $0.31 per pound from the current $0.216 per pound.

That approximately 10-cents-per-pound increase will raise the wholesale price for a box of field-grown Mexican tomatoes by several dollars, said Lance Jungmeyer of the Nogales, Ariz.-based Fresh Produce Association of the Americas.

“It's very mixed news,” Jungmeyer said. “This deal beats the alternative of having tariffs and being locked out of the market by an anti-dumping investigation. But the prices that they've come to are unacceptably high.

“For a U.S. company that's been an importer of Mexican tomatoes all along the Southwest border,” he said, “they're all of a sudden at a very severe market disadvantage from their competitors in Florida, California and Canada.”

Importers on the Texas border said the repercussions would be felt beyond the cash register, as Mexico retaliated by buying less American produce.

Agriculture Secretary Tom Vilsack said the agreement would allow domestic growers “to compete on a level playing field.”

“Ultimately, the Obama administration forged an agreement that will restore stability and confidence to the U.S. tomato market and ensure fair trade,” he said.

Source: mysanantonio.com