Mexican produce suppliers and U.S. grocers tap dance around tariffs to keep aisles stocked and prices steady

Trade with Mexico keeps fresh produce on American
grocery store shelves. (Adobe Stock photo)

Supermarket produce aisles are suffering from a bad case of tariff whiplash, leaving suppliers juggling orders to avoid levies and grocers searching for ways to hold costs down. "Companies that import and distribute tomatoes, broccoli and other fruits and vegetables are canceling orders and sometimes replacing them within days," reports Patrick Thomas of The Wall Street Journal. "Supermarkets and retailers are monitoring consumers’ tolerance for higher prices. . . and considering bigger changes in their supply chains."

The Trump administration's see-saw approach to tariffs is "becoming a day-to-day factor for businesses that rely on cross-border commerce," Thomas writes. "American consumers expect to see fresh produce in stores year-round, and for avocados, broccoli, peppers and mangos, that means buying from Mexico and South American countries."

Despite the scale of Mexican produce sales to the United States -- worth roughly $20 billion annually -- suppliers operate with razor-thin profits, which leaves "little room for sellers to absorb higher costs without passing them along to customers," Thomas explains. "That leaves retailers and suppliers to determine whether consumers can stomach still-higher prices after inflation fatigue has eroded sales at supermarkets and restaurants over the past year."

To hold prices steady, grocers are reworking their supply chains. "Grocery giant Kroger said it is attempting to shift its purchasing of produce and other products to avoid the Trump administration’s tariffs, and ward off further price increases in its stores," Thomas reports. California grocer, Dynasty Farms is "considering moving its broccoli production to the U.S., where the company operates farms from California’s Salinas Valley to Scottsdale, Ariz."