U.S. Trade Policy Shift Raises Concerns for Tomato Processors
The U.S. Department of Commerce’s recent decision to withdraw from the 2019 Tomato Suspension Agreement with Mexico is sending ripples through the tomato processing sector. Although Los Gatos Tomato Products, based in Huron, California, primarily serves the domestic market, company executive Dan Green says the policy shift will have indirect but significant effects on their operations.
Report by Lorrie Boyer for AgNet West:
Indirect Impacts of Trade Tensions
While Los Gatos does not heavily rely on exports, Green explains that the broader market environment will be affected. “As there’s more competition for exports related to tariffs or currency changes,” he said, “those kinds of things ultimately impact the business.” Increased export competition could disrupt pricing, availability, and market access across the sector—even for companies not directly engaged in international trade.
Post-COVID Market Volatility
Green also provided insight into the current state of the tomato processing market. He pointed to a marked shift in demand and pricing following the COVID-19 pandemic.
“Post-COVID, that has changed,” Green said. “Ultimately, we had the highest price on record for the cost of tomatoes in 2023.”
But the industry’s record-high pricing didn’t hold. A bumper crop led to an oversupplied market, putting significant downward pressure on prices and creating new challenges for processors.
Outlook for Processors Remains Cautious
These combined factors—volatile market conditions, international trade uncertainty, and shifting demand—have producers like Los Gatos Tomato Products navigating a complex and evolving landscape. With margins under pressure and policy changes adding unpredictability, the industry remains cautious about the months ahead.