Wholesale merchants: US tariff talk may force Mexican growers to sell elsewhere

Steve Tawa
June 05, 2019 - 3:50 pm
Jimmy Iovine

Steve Tawa/KYW Newsradio

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PHILADELPHIA (KYW Newsradio) — As President Donald Trump's threatened tariffs on Mexico are about to kick in, merchants at the Philadelphia Wholesale Produce Market along Essington Avenue in Southwest Philadelphia are just about ready to throw tomatoes at Washington politicians. 

Jimmy Iovine, the primary produce buyer at the family-run Iovine Brothers Produce in Reading Terminal Market, frequents the produce market — which is bigger than 14 football fields — three to four times a week. For now, he's trying not to think about tariffs.

"I come to shop with the intention of selling and making sure that my customers have what they want," he said.

Customer satisfaction, he said, is his first priority. "Then, we work on price."

But supply and demand dictate what consumers pay.

"Tariffs may eventually raise the price of things," Iovine said. "But I truly believe that supply and demand will determine more prices than tariffs, unless it continues on for a long time."

If supply tightens because of tariffs, Iovine will definitely feel the squeeze.

"I won't sell something over a certain price, so I try to find a balance. But still, I might have to pass it on," he added.

Dan Vena
Steve Tawa/KYW Newsradio
Dan Vena, of John Vena, Inc., is a fourth-generation produce business owner — now celebrating its 100th year in business. 

Vena has an enormous avocado ripening room to cater to his clients, converting green, hard avocados — almost all of which are from Mexico — into whatever level of ripeness a customer or restaurant prefers to be guacamole-ready.

"Fifty-two weeks of the year, we're selling Mexican products. We do think eventually the American people will be paying those tariffs," he noted.

He added that produce in general are commodities, and the prices are set by the markets.

"If the Mexican growers can't afford to send products here, because of higher tariffs — meaning higher prices to the American people — then they may chose to send it to Europe or Asia, in which case your supply would go down here, and prices would go up," he explained.

Tom Kovacevich's T.M. Kovacevich is one of the larger fruit merchants in the U.S.

"Honestly to us, it's tariff schmariff," he rebuffed. "It has no bearing on us."

His Mexican grapes are bottlenecked at the Nogales, Arizona entry border, where he says the Trump administration's policy has created too much red tape.

Tom Kovacevich
Steve Tawa/KYW Newsradio
"We have one grower that had 175,000 cases (of grapes) grown and shipped to the U.S. last night, but the border only let 65,000 cases through. So, only 30 truckloads out of 80 truckloads actually got across the border last night, from one grower," he said.

Kovacevich blames the shipping issue on a shortage of USDA inspectors and border patrol agents.

"Just recently, they closed four toll booths," he alluded to the border security booths. "A year ago, there were 10 opened."

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Kovacevich expects tariffs will be eaten by the growers.

"If they do kick in, say a $20 item has a 5% tariff — that's an extra dollar. That dollar will not be borne by the American consumer, anyway."

He said the bottom line is "buyers will pay what the buyers can pay," and "growers will be battling for the sale." In time, Kovacevich said enough fruit will get across, and "that dollar will come out of the growers' pocket."