Any nutritionist will tell you fresh fruits and vegetables are essential to a healthy diet, but trying to eat healthy could get more expensive as a result of the Trump administration’s proposed tariffs.
The Wall Street Journal reported produce importers have canceled contracts for such items as tomatoes and broccoli as a result of the threatened tariffs and grocers worry how consumers will deal with the inevitable higher prices.
Trump has threatened both Mexico and Canada with a blanket 25% tariff. In 2023, the U.S. imported $10.86 billion of fruit and nuts, and $9.52 billion of vegetables from Mexico. That same year, the U.S. imported $762 million of wheat and $446 million of oats from Canada.
The USDA estimates 60% of the fresh fruit and 38% of the vegetables eaten in the U.S. are imported.
Craig Slate, CEO of SunFed, called in a guest column for Produce Blue Book for fresh produce to be removed from the proposed tariffs.
“[U]sing produce as a bargaining chip will have an immediate and severe impact on U.S. consumers’ health, food access, and grocery bills,” Slate wrote.
Trump already has postponed the blanket 25% tariffs on Mexico and Canada twice. April 2, he has said, is when reciprocal tariffs will kick in.
Wils Johnson of Dynasty Farms told the Journal the ping-pong effect already has cost him thousands of dollars. He said the uncertainty has prompted him to think about moving broccoli production from the Salinas Valley in California to Scottsdale, Arizona.
“It’s going to shift our business plan,” he said. “It’s an expensive thing.”
John Vena, an East Coast produce distributor, told the Journal he’s rethinking how much to buy in case his customers balk at the higher prices and he gets stuck with rotting produce.
Because profit margins are slim, especially for commodities like tomatoes and bananas, “we have to be sure about the volumes we bring in, because we have to be sure we can sell it,” Vena said.
Kroger and Fresh Del Monte Produce already are looking for alternative supply chains to cope.
“The tariffs are very fluid right now,” Costco CEO Roland Vachris told the Journal. “So, it’s hard to really give any predictions on what we can do, but we are prepared.”
Slate said there simply isn’t enough land, water or labor in the U.S. to expand produce production, the bulk of which is grown in California (70%).
“Farming is already challenging due to unpredictable weather; produce must be grown where conditions are suitable, which changes throughout the year,” Slate noted.
“You can’t grow watermelons in the U.S. during the winter, and you can’t grow them in the same place in the U.S. during the spring, summer, and fall. Production is constantly moving to where the weather makes sense.”
Consistently among these recent and announced partnerships are end-products that emphasize incremental changes to the core menu with changes that can be integrated and scaled into existing platforms.
The Food Institute Podcast
How are macro-economic factors and changing consumer preferences impacting the natural grocery sector? City National Bank’s Justin D’Affronte steps in as guest host as he speaks with Mother’s Market CEO Dorothy Carlow about inflation, tariffs, consumer preferences, and more.
