Food prices have been climbing fast for years now, and now there is a staple that could see the prices shoot quickly: tomatoes.
Mexican tomatoes are immediately beaten with a rate of 17%, the American trade department said on July 14announcement that it withdrew from an agreement from 2019 that suspended the rates at tomatoes from Mexico.
That can influence a lot of tomatoes from supermarkets. Although the fruit-or vegetableDepending on who you ask – is also grown in Florida, about 70% of the fresh tomatoes consumed in the US come from Mexico, says David Ortega, a food economist at Michigan State University.
Although the price of a bunch of tomatoes can only rise by a few tens of cents, the increase comes at a time when consumers are already sick of inflation, and when rates are threatened by the Trump government, the prices can increase further, he says.
“This is one of the most consumed vegetables or fruit in the US, and it is important to place it in the context of consumer’s experience in recent years with food prices,” says Ortega. “They are thinly stretched and even a few cents, especially for households with a low income.”
Why the tomato prices are rising
The spit between Mexican and American farmers has a long history. In 1996, American farmers complained that Mexican farmers ‘dump tomatoes’ tomatoes, which means that they sold tomatoes to the US at an artificial low price.
In response to the complaint, Mexican farmers agreed to put a floor price for tomatoes in an attempt to ensure that American farmers were not undermined. In exchange, the US paused an investigation into whether Mexican farmers dumped tomatoes on the American market unfairly.
The US and Mexico have since reached new agreements about the floor price for tomatoes, but farmers have complained that Mexico is still involved in unfair commercial practices. The market share of American tomatoes has fallen to 30% of 80% since 1996, according to the Florida Farm deskWhile the import of the Mexican tomatoes has increased by 400%.
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The Commerce department Announced for the first time in April That it withdrew from the ceasefire, which was called the tomato revenue agreement, but at the time said that the rates for the import of tomatoes of Mexico would be 20.9%. That rate was somewhat reduced in the announcement of trade secretary Howard Lutnick van de Handard Howard Lutnick and formalized the plans to withdraw. “Our farmers are crushed for far too long by unfair commercial practices that undermine prices for products such as tomatoes,” he said. “That ends today.”
American consumers may not see the effect of the new rates to the fall, says Ortega, because tomatoes are currently in the US in the US, we rely on imported tomatoes heavier in the winter.
Why other food prices also rise
The levying of tomato rates came a day before new government inflation data demonstrated that food prices continued to rise. The Consumer price indexOr CPI showed that the prices of beef and veal in June had increased by 10.6% compared to a year ago, that egg prices rose by 27.3% and that coffee prices increased by 13.4%. In general, inflation rose by 2.7% compared to a year ago.
The rising prices of beef, eggs and coffee are not directly related to rates, says Ortega. The price of beef rises because a drought from 2022 made it too expensive for farmers to keep cattle, and now animal husbandry in the US is extremely low. However, Americans still demand beef, so a low supply and the high demand cause prices.
Egg prices rose from a year ago due to bird flu, although their prize actually fell from a month ago. And the coffee prices climb because climate change has influenced in places such as Brazil and Vietnam, says Ortega.
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Yet rates do not help: American producers depend on certain types of lean beef from Brazil to make minced beef, ortega, and the rate of 10% on almost all food input makes that more expensive.
These rates of 10% also influence other foods.
“This marks the first inflation report in which rates material start to appear in important categories – from devices and furniture to clothing and groceries,” said Daniel Hornung, Senior Fellow at MIT, about the CPI report.
It is unlikely that it will be the last one, he says, because companies go through their pre-Tariff inventory and are probably forced to pass on the price increases to the consumer soon.
Not to mention the gigantic rates that the Trump government has promised to raise in some places where we get a lot of our food, says Ortega. Trump recently threatened Brazil with 50% rates. If they enter into force on 1 August, as planned at the moment, they will increase the price of beef, oranges, orange juice and more.
Much of those imports from Brazil cannot easily be replaced by American goods. Florida Orange Crops, for example, are heavily struck by citrus green, which is a tree disease and by devastating hurricanes.
“If these rates remain in place,” says Ortega, “they have a remarkable impact on food prices.”
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