The tomato suspension agreement signed early this year that set higher floor prices for Mexican tomatoes is having little affect, industry sources say.So far, the tomato suspension agreement signed early this year by Mexican growers and the U.S. Department of Commerce that set higher floor prices for Mexican tomatoes doesn’t seem to be having much impact, industry sources say.
The suspension agreement revised prices higher, but market conditions have been above those price revisions, said John King, vice president of sales for Andrew & Williamson Fresh Produce, San Diego.
Farmers have not had to curtail production because of the new agreement, he said.
“Because of the (adverse) weather around the country and volumes being light everywhere and the market staying relatively strong, it has not been a factor at all,” said Brian Bernauer, sales director for Fresh Pac International, Oceanside, Calif.
He said there could be times when the agreement will affect tomato business, like there were with the previous agreement, but he does not expect that impact to be significant.
“(Mexican growers) have the right varieties of round tomatoes and roma tomatoes that the consumers want,” he said. “Because they want them, the demand will be there, and you will be able to move what you have.”
Supply and demand may vary, and growers might struggle a little bit from time to time, he said, “but overall, I think we’ll be OK.”
Tight supplies buoy prices
Royal Flavor LLC, San Diego, felt some effects of the agreement early in the season, said Steve Yasuda, sales manager. But in August, he said it no longer was a factor because of tight tomato supplies out of Baja California.
Yasuda said the agreement might have an impact later in the year, but how much it will be felt will depend on the volume of tomatoes available.
“(The suspension agreement) hasn’t had an effect on us this summer,” said Joe Bernardi, president of Bernardi & Associates Inc., Nogales, Ariz.
Even in the springtime, markets were higher than normal, he said.
“I don’t think we’ll know the effect of that until we go through a full year of the Mexican winter deal,” he said.
Early season affected
The suspension agreement affected the tomato deal early in the season, when prices were cheap, said Cameron Purcell, marketing director for United Greenhouse LLC, Santa Ana, Calif.
Some people got out of the deal, and because quality of tomatoes shipped to the U.S. now must be U.S. No. 1 Grade, he said, the market has tightened up and the effects of the suspension agreement are nil.
The higher quality requirement is good for the grower, the shipper and the consumer, he said.
“It’s good for everybody.”
King said there is widespread grower support for “a mechanism to make sense of the tomato market.”
Historically, there have been oversupplies of open-field, greenhouse and shade house tomatoes, and that has led to low prices.
“Low prices don’t benefit anyone,” he said.