A new tomato anti-dumping suspension agreement between Mexican tomato growers and the U.S. Commerce Department, that went into effect last year mid-season, raised the minimum price on tomatoes from Mexico coming in to U.S. markets, with the increases being significantly higher for some tomato categories than for others. The current tomato season is the first full season for which the new agreement, superseding a previous agreement that had been in place for 16 years.
“I guess the newest thing for us this year is just dealing with the new suspension agreement and how that affects the tomato deal over an entire Mexican tomato growing season,” said Joe Bernardi, president of Bernardi & Associates Inc. in Nogales, AZ, in an interview with The Produce News Feb. 6.
Otherwise, “it is more of the same for us,” he said. “We are continuing to broker product out of Nogales. Still our biggest item that we do is all the tomato items, but along with a lot of vegetables — cukes and bells and squash and melons and chilis and such.”
As to the suspension agreement, “it is still to be seen how it is going to work,” Bernardi said.
For a company like ourselves that moves a large volume of product,” when supply and demand brings prices down to the minimum price under the suspension agreement, those higher minimum prices “affect us when the person buying one pallet is always paying the same price as we are, buying multiple loads,” he said. “We will continue to see how that works out and what it means in the long run.”
Currently, “with more products starting to come on in Mexico and volume picking up, along with product still being available out of Florida,” movement “is a little bit slower than usual” due to cold, stormy weather across much of the United States, Bernardi continued.
Crops were looking “very good, both on tomatoes and vegetables,” he said. Since the heavy rains brought by a hurricane back in October, “growing conditions have been near ideal, so I anticipate as we go through the balance of February, March and April, that we will continue to see good supplies of really good quality product. I think there will be a lot of opportunities for promoting both tomatoes and vegetables.”
In another couple of weeks, “when the weather starts getting better around the country,” he said, “people will definitely want to be out and about.” Foodservice business will go back up, “and backyard barbecues will take off and help out retail. We are suffering through it now, but better times are not too far off.”
Tomato production early in the season was little slower to get moving than usual, “but now that we are into the month of February, I would say things are pretty much back to normal,” he said.
Tomato plantings do seem to have been affected by the new suspension agreement, Bernardi said. “The best that I can tell, it seems that Roma plantings may be about the same as last year or increased a small amount, but it seems that round tomato plantings may be down some. I would say that is directly attributable to the new suspension agreement. I would say that is directly attributable to the new suspension agreement. I think that the Mexican growers understand that Florida is not as big a factor in the Roma deal, so they figure they will get the majority of the market share on Romas even with the higher minimums, but on rounds they have to be careful, because if we have a glut around, and Florida has them as well, there is only so low that we can go [on price] to compete.”
Florida growers, on the other hand, are not bound by the minimum price.
There were “definitely” fewer acres of cherry tomatoes planted in Mexico this year, he added. “With the cherry minimum being what it is now, which is awfully high, I can see the market share for cherries continue to dwindle and dwindle. They are generally being replaced by the grape tomato” which has a lower minimum price than the cherry tomatoes.
At Bernardi & Associates, “the group of customers that we continue to serve,” mainly wholesalers, re-packers and foodservice operators around the country, “continues to grow,” Bernardi said. “As always, we provide a value” to customers “by our buying power, by our quality control people on-site and our five offices around the country that give us year-round supply of all of the tomato categories. That adds a lot of value to what we do.
For customers who “require so many loads of tomatoes a week 52 weeks a year,” he said, “we have the ability to have that year-round program. No matter what happens weather-wise in any individual area, we can provide for their needs year-round.”