What are the key takeaways from this Odd Lots episode?

Key insights include: **Weather-driven supply shocks:** Two Florida freezes destroyed 80% of the state's winter tomato crop, eliminating roughly 26 of every 100 tomatoes available to the US market. Since produce demand is inelastic short-term, this imbalance drove wholesale case prices from near the five-year average to $65 per case in May before retreating by late June.; **Mexico's market dominance and tariff risk:** Mexico now supplies 70% of US winter tomatoes, a complete reversal from pre-NAFTA levels when domestic production held 80% share. A 17% anti-dumping tariff implemented in July 2024 created uncertainty that reduced Mexican acreage by 3–4%, which, combined with Florida losses, produced the perfect supply storm.; **Retail price stickiness vs. food service transparency:** Retailers raise prices like a rocket and lower them like a feather because consumers lack real-time market data. Restaurant buyers, by contrast, monitor USDA wholesale prices daily and negotiate accordingly. The retail-to-wholesale markup on beef has widened from roughly 30% to 45% over two decades, illustrating this asymmetry.

What did Jacob Krempel discuss on Odd Lots?

Tomato prices hit a 40-year high of $2.69 per pound in 2025, driven by two Florida freezes wiping out 80% of the state's crop, a 17% anti-dumping tariff on Mexican imports, and reduced Mexican production. Jacob Krempel of Baldor Specialty explains the full supply chain behind the spike. Key topics include: **Weather-driven supply shocks:** Two Florida freezes destroyed 80% of the state's winter tomato crop, eliminating roughly 26 of every 100 tomatoes available to the US market. Since produce demand is inelastic short-term, this imbalance drove wholesale case prices from near the five-year average to $65 per case in May before retreating by late June.; **Mexico's market dominance and tariff risk:** Mexico now supplies 70% of US winter tomatoes, a complete reversal from pre-NAFTA levels when domestic production held 80% share. A 17% anti-dumping tariff implemented in July 2024 created uncertainty that reduced Mexican acreage by 3–4%, which, combined with Florida losses, produced the perfect supply storm..

How long is this episode of Odd Lots?

This episode is 54 minutes long. SignalCast provides an AI-generated summary so you can get the key insights in about 3 minutes.

Odd Lots

Why Tomatoes Are the Most Expensive They've Been in Four Decades

June 11, 2026

54 min episode · 2 min read

Jacob Krempel

Episode

54 min

Read time

2 min

Topics

Product & Tech Trends, Science & Discovery, Economics & Policy

AI-Generated Summary

Published Jun 11, 2026

Key Takeaways

✓Weather-driven supply shocks: Two Florida freezes destroyed 80% of the state's winter tomato crop, eliminating roughly 26 of every 100 tomatoes available to the US market. Since produce demand is inelastic short-term, this imbalance drove wholesale case prices from near the five-year average to $65 per case in May before retreating by late June.
✓Mexico's market dominance and tariff risk: Mexico now supplies 70% of US winter tomatoes, a complete reversal from pre-NAFTA levels when domestic production held 80% share. A 17% anti-dumping tariff implemented in July 2024 created uncertainty that reduced Mexican acreage by 3–4%, which, combined with Florida losses, produced the perfect supply storm.
✓Retail price stickiness vs. food service transparency: Retailers raise prices like a rocket and lower them like a feather because consumers lack real-time market data. Restaurant buyers, by contrast, monitor USDA wholesale prices daily and negotiate accordingly. The retail-to-wholesale markup on beef has widened from roughly 30% to 45% over two decades, illustrating this asymmetry.
✓Trucking cost explosion: A team-drive truck from Salinas, California to the East Coast cost $10,000–$11,000 eight months prior to recording; that price surged to $16,000–$17,000 recently. Immigration enforcement reducing cross-border drivers combined with rising diesel costs drove this increase, adding meaningful pressure to all fresh produce pricing nationwide.
✓Fertilizer costs entering contracts: Growers currently have fertilizer costs locked in from prior purchasing cycles, but those contracts expire within six months. Baldor's late-summer contracting season will force renegotiation at higher input prices, meaning fertilizer inflation has not yet fully passed through to restaurant or retail tomato prices but will appear in 2026 pricing.

What It Covers

Tomato prices hit a 40-year high of $2.69 per pound in 2025, driven by two Florida freezes wiping out 80% of the state's crop, a 17% anti-dumping tariff on Mexican imports, and reduced Mexican production. Jacob Krempel of Baldor Specialty explains the full supply chain behind the spike.

Key Questions Answered

•Weather-driven supply shocks: Two Florida freezes destroyed 80% of the state's winter tomato crop, eliminating roughly 26 of every 100 tomatoes available to the US market. Since produce demand is inelastic short-term, this imbalance drove wholesale case prices from near the five-year average to $65 per case in May before retreating by late June.
•Mexico's market dominance and tariff risk: Mexico now supplies 70% of US winter tomatoes, a complete reversal from pre-NAFTA levels when domestic production held 80% share. A 17% anti-dumping tariff implemented in July 2024 created uncertainty that reduced Mexican acreage by 3–4%, which, combined with Florida losses, produced the perfect supply storm.
•Retail price stickiness vs. food service transparency: Retailers raise prices like a rocket and lower them like a feather because consumers lack real-time market data. Restaurant buyers, by contrast, monitor USDA wholesale prices daily and negotiate accordingly. The retail-to-wholesale markup on beef has widened from roughly 30% to 45% over two decades, illustrating this asymmetry.
•Trucking cost explosion: A team-drive truck from Salinas, California to the East Coast cost $10,000–$11,000 eight months prior to recording; that price surged to $16,000–$17,000 recently. Immigration enforcement reducing cross-border drivers combined with rising diesel costs drove this increase, adding meaningful pressure to all fresh produce pricing nationwide.
•Fertilizer costs entering contracts: Growers currently have fertilizer costs locked in from prior purchasing cycles, but those contracts expire within six months. Baldor's late-summer contracting season will force renegotiation at higher input prices, meaning fertilizer inflation has not yet fully passed through to restaurant or retail tomato prices but will appear in 2026 pricing.

Notable Moment

Krempel revealed that growers like Girl and Doug deliberately remove at least one-third of all flowers during production to concentrate nutrients into fewer tomatoes, sacrificing yield entirely to maximize flavor — a counterintuitive practice that directly explains why specialty varieties taste dramatically different from commodity tomatoes.

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Episode Transcript

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