While the food prices are soaring because of the inflation, the price of tomatoes has stayed relatively steady. Since the start of the year, tomato prices in the US have dropped 2% from $1.93 per pound to $1.89 per pound in August. Meanwhile, the food prices index rose 7% in that same timeframe (though tomato prices have been inching up since April). Why have tomato prices been fairly stable? They were already at a premium compared to other vegetables, said Brad Rubin, an analyst of fresh and processed fruits and vegetables at Wells Fargo. In other words, customers were already paying higher prices for tomatoes, and other fruits and vegetables are just catching up.
One reason for steady prices is due to the US Department of Commerce suspending an antidumping investigation involving fresh-market tomatoes by a negotiated agreement in 1996. Dumping refers to manufacturers exporting below the normal price in order to increase market share in a foreign market and then drive out competition. The Tomato Suspension Agreement prevents “dumping” from Mexico because it forces a minimum price for imported product coming into the US from Mexico.
US tomato production is fairly stable
In the major commercial growing regions of California, Florida, and Mexico, the production of tomatoes in the US has also been fairly stable, as tomatoes don’t require a ton of inputs other than water and fertilizer, said Rubin. Tomatoes are grown year-round, leading to more even margins than for seasonally-grown produce, he said. “When you look at all the cost structures of cultivators and growing, it really hasn’t changed,” said Rubin. “Inputs have risen a little bit, but demand-supply sort of remained stagnant,” he said. As a result, tomato prices have stayed relatively stable at the supermarket.
Like all crops, tomatoes face the risk of weather. Hurricane Ian could affect the tomato crops in Florida, and severe water restriction in California could affect tomato growers in California’s Central Valley. “We may actually see some things occur as a result of that,” he said.