Jacob Kremple

We have lower labor costs.

We're getting better yields.

So this isn't actually something that like we're economically selling lower in our home country versus you or not.

I think there's truth on both sides to that for sure.

But we had these suspension agreements in place that had floors on tomato pricing that was allowed to be charged in the US from Mexico growers.

That changed last year in July when the US government reopened the case and put the anti-dumping tariff on Mexico.

And that change created more uncertainty than maybe the floor would have under the old suspension agreements that were in place.

So between those two things, I think it was a little bit of a perfect storm of you decimated the Florida crop.

Mexico didn't have a ton of extra production left available.

And you see this crazy spike where a case of tomatoes on average went from in April, much closer to the five-year average to May was 65 bucks a case on average for the whole month and very high.

So in June, we're back to the five-year average already.

Yeah.

Towards the end of May, end of June, it started to drop again.

But this is where you get into the retail component.

Everybody says retailers, they take their prices up like a rocket and down like a feather.

And so retailers will use this as an opportunity to see, is there a new price floor that they're happy with where...

Maybe I'm going to charge the consumer a little bit more than I traditionally used to when these markets are this cheap because the customer is still going to pay.

It might not be $2.69 a tomato, but maybe $1.99 a tomato when I used to have to go to $1.49, right?

If you think of grocery retail economics, it's changed significantly over the last 15 years.

So if you think of like how much home delivery or click and collect, like pickup at the store, they're much more advertising and marketing companies now where they're selling customer data to their suppliers about what are customers actually purchasing or not.