Perfect Storm of Maladies Sends Tomato Prices Soaring

It is going to be more expensive to enjoy that BLT sandwich or to make a homemade marinara sauce. The cost of tomatoes has risen sharply this year. What is behind the skyrocketing prices? Read on for more information about the tomato shortage and the resulting higher costs.

Surging Wholesale Prices on Tomatoes Trickling Down to Consumers

Warmer temperatures naturally drive people to markets to pick up tomatoes for their burgers from the grill or to make that fresh spring salad. Seasonal demand for tomatoes across the U.S. is increasing just as the price of this vegetable is jumping exponentially.

According to data from the Consumer Price Index (CPI), the cost of tomatoes was up 15.3% in March. Prices are up 22.6% when going back to the same time last year.

Produce buyers have been the first to feel the impacts of the higher prices. These companies have then had to pass the increase on to consumers, resulting in higher prices at the grocery stores. David Branch, sector manager at Wells Fargo Agri-Food Institute, said that "tomatoes are among the most expensive vegetables Americans are seeing at the grocery store right now."

Branch noted that tomatoes will "continue to be a major driver of produce inflation this spring." According to Branch, tomatoes are now retailing for approximately $2.25 per pound. This is the highest level in eight years, as well as up 18.6% from February, when shoppers were spending about $1.90 per pound.

What is to Blame for the Higher Tomato Prices?

There are a number of factors driving the increase in tomato prices. As is typically the case with cost jumps in produce, weather always plays a significant role.

Unusual weather patterns in Florida and Mexico during the peak tomato growing season are largely to blame. The U.S. gets most of its tomatoes from Mexico, California, and Florida.

A rare cold snap in Florida this past winter destroyed a large number of crops in the Sunshine State. Temperatures fell to as low as 27 degrees on the western coast of the peninsula. All it takes is five hours of temperatures below the freezing threshold to destroy these sensitive tomato plants.

Bob Spencer, president of West Coast Tomato in Manatee County, Florida, said that the region has its first hard freeze in about 15 years. His family-run farm lost about 70% of its produce output, significantly impacting its 2,000 acres of tomato plants. Spencer's farm is just one example of what agricultural interests across Florida are grappling with as a result of the chilly winter.

The weather was also harsh on the crop in Mexico. According to the American Farm Bureau Federation (AFBF), about 70% of America's tomato supply comes from Mexico. The persistent rain and fog did a number on the tomato crops growing in America's neighbor to the south. This is because higher levels of moisture in the air make the tomato plants more vulnerable to disease and pest invasions.

The inclement weather also negatively impacted lettuce farmers. Warmer-than-usual temperatures in California and Arizona paired with an invasive plant-eating virus to destroy lettuce crops in both states. Lettuce prices inched up 12.2% in February before falling back to normal levels in March.

The silver lining is that relief could be on the way for tomato lovers. Florida farmers were able to plant a new crop of the plants right after the January deep freeze lifted. These tomatoes are expected to be ready to ship in the weeks ahead, helping to alleviate the shortage and bring prices back down.

Mother Nature is not the only factor at play in the soaring cost of tomatoes. The price of diesel fuel and fertilizer is also on the rise. The combination of increasing transportation costs, oil, and fertilizer prices is making it more expensive to produce, harvest, and ship the crops.

According to AAA, diesel prices have skyrocketed more than 50% since the start of the war with Iran. The national average price for a gallon of diesel is now well over $5. In addition, the price of oil has also risen sharply since the end of February. Oil is also used in plastic packaging for vegetables.

Compounding the cost problem is that fertilizer prices have increased by over 50% since late February, when the war began. Many of the key components of fertilizer, including ammonia, natural gas, and urea, are made in the Middle East. The war has disrupted these supply chains, resulting in higher prices of fertilizer in the U.S.

Lastly, the 17% tariff on tomatoes coming from Mexico under President Donald Trump has also inevitably brought up costs.

All of these increases have to be baked into the price that consumers see at the grocery store. Until prices come down across the board, experts recommend shopping the sales, hitting up farmers markets near closing time, and buying in bulk from warehouse stores.

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