Following Tuesday's decision by the U.S. Department of Commerce (Commerce) to terminate the 2019 U.S.-Mexico Tomato Suspension Agreement and implement a 20.91 percent duty on imported tomatoes, while organizations such as the Florida Tomato Exchange applauded the move, there are reservations. "It's a moot point right now as Mexican production winds down and domestic production starts, so it's not going to do a lot of harm to the Mexican grower this season," says Neil Mazal of East Coast Farms & Vegetables. "However, if they remain in place next season, the impact will be felt at retail and foodservice."
It is generally concluded that the impact from the agreement, which goes into place on July 14th, will be higher costs of the product. This is due to a variety of reasons, starting with the fact that in key tomato growing regions in the U.S., such as Florida, production has been decreasing. That's largely due to acreage being sold off for housing and/or tourism development. "The ground in Florida is disappearing. Homestead used to be a huge tomato, squash, and corn growing area, and all those farms are disappearing," says Mazal. "On the Immokalee side, there's still a fair bit of acreage, but a lot of that ground is cold and not conducive to growing crops, and a lot of those areas are subject to flooding and weather events, as we saw from the hurricanes."
U.S. winter production snapshot
In all, that has just made for less winter tomato production in the U.S. (Right now, reports indicate that Mexican tomato growers supply an estimated 70 percent of the winter crop and domestic tomatoes account for about 30 percent.) "The production is limited in the winter months to Florida, maybe a little bit Louisiana, Texas and then you get to California growers. The winter veg deal for almost all crops is really in the hands of importers, whether it be. Guatemala, Mexico, Peru, Honduras," says Mazal. "So, how do you ramp up the shortfall on supply? You don't. These growers will continue to grow and import, and consumers will pay more money for the same item. "
© FPAAPhoto: FPAA
Add to that the issue of labor costs, which have continued to increase and made it prohibitive to get domestic labor on farms. "They say domestic production will increase because this decision will stop the competition, and it won't because we don't have the labor. Using H2-A labor means the inputs are too expensive. It'll raise the market even for domestic product," says Mazal.
There is also a difference in the type of tomatoes grown in the winter, particularly–that's when it's largely gas-green tomato production takes place in the U.S., which will leave a lack of vine-ripened tomatoes. Those are the kinds generally grown more seasonally in the U.S. and only for limited periods.
Looking closer at gas-green tomatoes
In fact, the Fresh Produce Association of the Americas (FPAA) doesn't mince words when it comes to gas-green tomatoes. "This kind of tomato has lost market share as consumers and restaurants have shifted to tomato varieties that naturally ripen on the plant, just like in nature, with a natural deep red color and superior flavor, such as those provided by FPAA members. In a twist of irony, several of the largest Florida tomato farmers also have significant tomato farms in Mexico to meet vine-ripe tomato demand, which decides to impose duties all the more unfathomable," reads a recent statement on the subject.
The FPAA also reiterates the concern that U.S. consumers will continue to pay more for vine-ripened, specialty, and roma tomatoes if the duties of 20.91 percent go into place July 14.
© Florida Tomato CommitteePhoto: Florida Tomato Committee
"Tomatoes sold in the U.S. from Mexico are governed by Commerce through the Tomato Suspension Agreement, which sets minimum pricing, puts in place requirements for sales between importers and buyers, requires exhaustive inspections for quality, and has stringent enforcement and compliance monitoring measures in place," reads the statement. "This includes regular quarterly audits, administrative reviews, on-site audits from the Commerce, and enforcement measures in place in Mexico.
Compliance with the agreement
FPAA says the Department of Commerce has consistently found Mexican tomatoes in compliance with the Tomato Suspension Agreement, contrary to claims and says that since the implementation of mandatory quality inspections that Florida growers demanded under the 2019 Tomato Suspension Agreement, 99.992 percent of all tomatoes that must be inspected from Mexico have met or exceeded all quality requirements.
"In a time of severe food inflation, the members of the FPAA urge the Administration to negotiate a new tomato agreement that supports the innovations of U.S. importers, continues to fill the demands of U.S. consumers, and that helps domestic growers improve their ability to compete, via research, innovation, and improved varieties rather than through duties on their U.S. competitors in Arizona, California, Texas, and elsewhere," notes the statement.
For more information:
Neil Mazal
East Coast Farms & Vegetables
https://www.eastcoastfarms.us/
Lance Jungmeyer
Fresh Produce Association of the Americas
www.freshfrommexico.com