Tomatoes are having a moment. You might not like the reason
Tomato prices were up 15.3% in March alone and are up 22.6% compared to the same time last year
New York (CNN) — Mike Armata has been staring at lackluster tomatoes for a month now.
They’re fine to eat, they just don’t look as great as they normally do. His bigger problem is that they’re very expensive. But in this market, he has to take what he can get.
“There’s shortages everywhere. It’s a big expense for us to put up front on a gamble that people will in fact buy these products at these prices. It’s scary,” said Armata, who’s a produce buyer for his family-run company, E. Armata, which sells tomatoes to hundreds of businesses in the northeast.
Seasonal demand for tomatoes is starting to pick up in the United States, as warm weather calls for more burgers, salsa, salad and ketchup on hotdogs. But a deep freeze during Florida’s peak tomato season, combined with wet weather during Mexico’s tomato growing season, has shrunk the crop size this year. Armata said he is only getting an eighth of his normal supply from Mexico, California, Florida and the Dominican Republic.
Meanwhile, prices have notably increased. Tomato prices were up 15.3% in March alone and are up 22.6% compared to the same time last year, according to Consumer Price Index data. The 17% tariff on tomatoes from Mexico and higher diesel costs because of the war with Iran have created a recipe for wildly expensive tomatoes.
Armata said he paid $25 for a 25-pound box of tomatoes a month ago. Today, he’s paying triple that price.
He said that for E. Armata to make a small profit, customers would need to pay at least $80 for a 25-pound box of tomatoes.
The cost is trickling down to consumers as well. At the grocery store, tomatoes retail for around $2.25 a pound – the highest level in eight years. That’s up 18.6% from February when consumers spent closer to $1.90 a pound, according to David Branch, sector manager at Wells Fargo Agri-Food Institute.
“Tomatoes are among the most expensive vegetables Americans are seeing at the grocery store right now. Until more fields come back online, tomatoes will continue to be a major driver of produce inflation this spring,” Branch said this week.
(We know many of you, and botanists, consider a tomato to be a fruit, but farmers call them vegetables because that’s how they’re classified by US Customs and the Bureau of Labor Statistics).
Bad weather
Farms in Florida and Mexico, both key producers of tomatoes for the US, were hit hard by extraordinary weather during what should be their peak seasons.
Temperatures on Florida’s west coast dropped to as low as 27 degrees in mid-January. Just five hours of sub-freezing temperatures is enough to take out crops.
“For the first time in about 15 years, we had a hard freeze in Florida,” said Bob Spencer, president of West Coast Tomato in Manatee County, Florida. The family-run farm has about 2,000 acres of tomatoes, and Spencer estimated that the freeze took out about 70% of the farm’s entire produce output.
But Florida is only a small slice of the tomato pie. Seventy percent of tomatoes consumed in the United States come from Mexico, where the weather was also brutal, according to the American Farm Bureau Federation (AFBF).
“They had a lot of rain, a lot of fog, and tomato plants in particular do not do well with super high levels of moisture. It makes the plant more susceptible to disease, and it weakens it for pests,” said Steven Bradley, president of Cox Farms, which grows greens, vine crops and produce.
Cox Farms now grows most of its tomatoes in greenhouses in Canada to avoid weather issues, according to Bradley.
Lettuce farmers experienced a similar problem in February during California and Arizona’s peak growing season, when warmer weather and a plant-eating virus destroyed crops, according to the AFBF. That sent lettuce prices up 12.2% in February before they retreated in March, according to the Consumer Price Index.
Tomato farmers and consumers might see some relief soon. Spencer and other Florida farmers got a new crop of tomatoes in the ground just days after the deep freeze in January. Those tomatoes should be ready to ship in the next two weeks, which should ease some of the pressure from the shortage.
“You’re hoping to break even,” Spencer said, adding that despite high prices in grocery stores, “it’s not like the tomato producers are getting wealthy on this.”
The diesel and fertilizer problem
Even if supply starts to stabilize in the coming weeks, the price of diesel and fertilizer is on the rise. Spencer said West Coast Tomato anticipates a 10% to 15% increase in costs in the fall, driven by rising transportation, oil and fertilizer prices.
Diesel – used for both farm machinery and deliveries – has jumped by more than 50% since the war with Iran started in late February, according to AAA. The national average for diesel is $5.61 a gallon, according to AAA.
“The price of freight to get the product here alone is astronomical,” said Armata. “With the price of fuel being so high, not only do you have a high price item, but now I have to get it to you as well, and that’s going to cost a little bit more money.”
Oil, which has remained above $90 a barrel in recent weeks, is also used to make plastic packaging for tomatoes.
Fertilizer has skyrocketed in price by more than 50% since late February, according to FactSet. Key components of fertilizer like natural gas, ammonia and urea, all of which are produced in the Middle East, have been disrupted since the conflict erupted. Seventy percent of farmers told the AFBF in a new survey out Tuesday that they are unable to afford fertilizer.
“This is the life we have chosen. We know we are in an industry that no matter what you do right with growing your crops, there’s a tremendous amount of things that can go negative,” Spencer said.
“And a lot of those have to do with nature.”
CNN’s August Phillips contributed to this report.
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