DiMare: Mexican imports imperil Florida tomato industry

01/19/2012 10:45:00 AM
Andy Nelson

The Florida winter tomato deal — and perhaps the Florida tomato industry, period — could be at risk because of rapidly increasing volumes from Mexico, according to an industry veteran.

A Mexican industry official, meanwhile, says the tomato industry loses if any grower goes out of business, north or south of the border.

Tony DiMare, vice president of the Homestead, Fla.-based DiMare Co., one of Florida’s largest shippers, said the U.S. government is not doing a good enough job cracking down on illegally low-priced Mexican tomatoes and on shipments that are not meant for export but come to the U.S. anyway.

Reggie Brown, executive vice president of the Maitland-based Florida Tomato Exchange, said there has been “some circumvention” in past years of a suspension agreement between the U.S. and Mexico that sets a price minimum, and he fears there could be more this season.

As a result, DiMare said, Florida tomato growers are struggling to weather an ever-increasing flood of Mexican product that is keeping prices below production costs for months at a time.

With rising production costs, the break-even price for Florida growers is $9 or $10 per box, DiMare said. Growers no longer enjoy the strong markets that make up for the weak ones, he said.

“It’s at risk, there’s no question about it,” DiMare said. “We cannot continue to sustain these kinds of losses. It will eventually knock us out of the winter deal, and maybe eventually out of the entire deal.”

That would hurt everyone, not just Florida, said Eric Viramontes, chief executive officer of the Mexican Association for Protected Horticulture, Culiacan.

“I can understand (DiMare’s) worries,” Viramontes said. “We don’t want the industry to disappear in any area. We’re all on the same ship.”

That said, Viramontes asserts that all of the growers under his organization’s umbrella are complying with the suspension agreement, though AMHPAC would welcome a greater role in the enforcement of it. That authority, he said, would have to come from the U.S. government.

“It’s in our best interest that tomatoes not be dumped,” Viramontes said.

AMHPAC does not, however, support changing the agreement to limit volumes, a change which DiMare said could be necessary to buoy markets.

“I see (DiMare’s) point of view, but that would be opening a very dangerous door,” Viramontes said. “You always have to think of the butterfly effect. You may regret it later.”

The growth of the Mexican greenhouse vegetable industry has been good not only for Mexico, but for the U.S., as well, Viramontes said. An AMHPAC study found that in 2009 alone, the industry accounted for 8,000 new jobs in the U.S.

In mid-January, Mexican tomatoes were already selling at the lowest price allowed under the suspension agreement, about 21 cents per pound, DiMare said.

That was before peak volumes from south of the border even started to hit, he said. When they do, product will come into the U.S. that is below the suspension agreement floor price.

In addition, product marked “not for export” also will make it across, DiMare said.

“The U.S. Department of Agriculture is supposed to be monitoring it, but it seems like every year that kind of product finds its way into the market,” he said.

Mexican field-grown tomato volumes have fallen off in recent years, but greenhouse volumes have skyrocketed, according to the U.S. Department of Agriculture.

In the 2005-06 season, about 343 million pounds of greenhouse tomatoes were shipped from Mexico to the U.S. By 2010-11, the total had risen to 771 million pounds.

Brown compared the suspension agreement to a dike. If the water keeps rising, there’s a point at which the dike can no longer do its job. And that point has been reached in the tomato industry.

“The marketplace is grossly oversupplied with capacity,” Brown said. “One answer is to find a mechanism at the border to avoid overwhelming the marketplace.”

Even if Mexican shippers don’t dip below the floor price established by the suspension agreement, Brown says the floor price isn’t high enough for anyone — definitely in the U.S., and probably in Mexico, too — to make a profit.

Lance Jungmeyer, president of the Nogales, Ariz.-based Fresh Produce Association of the Americas, which conducts workshops educating growers and importers about the suspension agreement, said it has succeeded in bringing order to the marketing of Mexican tomatoes.

“Everyone I talk to says it’s good,” Jungmeyer said.

Any violations of the agreement are an anomaly, he said. Shippers don’t stand to gain from dumping fruit, and under the agreement they face stiff fines if they do.

“Anyone who’s in it for the long haul has no interest in subverting this,” he said.

As for changing the agreement to limit volumes, Jungmeyer doubts if such a change would stand up to North American Free Trade Agreement and World Trade Organization scrutiny.



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John Oliver/Nogales Fruit and Recycling    
Nogales AZ  |  January, 19, 2012 at 10:57 AM

8000 new jobs? Really-how about some details More BS from Mexico

Eric    
Nogales, Az.  |  January, 19, 2012 at 04:38 PM

the new jobs are in transportation, custom brokers, distribution, cold room personal, suppliers for packing materials, and others materials sold for growing operations in Mexico. Remember growers from Mexico purchase many materials, and other supplies from the USA.

Gary    
Cincinnati  |  January, 19, 2012 at 12:21 PM

Florida needs to develop and promote a true vine ripened tomato program to compete with Mexico's and pseudo vine ripe (esl). Florida has no presence in major chains which are dominated by imports, including tovs (clusters). Florida only wants to market mature greens.

Rick    
Goshen,In.  |  January, 20, 2012 at 09:15 AM

I agree with Gary.I do purchase some vine ripened tomatoes from Fl.(field packs) but they are not easy to find.I would rather buy from fl. freight is less,i get them at least a day earlier & a lot less hassle.

Max    
Immokalee, Florida  |  January, 20, 2012 at 09:05 AM

The market price should be established by the local grower coop, any imports should be required to be SOLD at that price level or higher (if a better grade), NO under cutting the local guy. If the USDA doesn't understand how that works or how to impliment that I can show them.

Gary    
Cincinnati  |  January, 20, 2012 at 10:49 AM

Max - Co-op by any other name is the Florida Tomato Committee. They've tried to control the pricing and that hasn't worked. Remember the "floor price" of a few years ago. Did that work? No!!! That's why they have $3.00 tomatoes today. Have they tried to improve flavor? No!!! That's why many chain stores in Florida don't promote the "local" deal. Co-op smo-op.

Produce Guy    
Texas  |  January, 21, 2012 at 10:08 AM

Several things: 1) I love how these “job creating” figures are nowadays thrown around everywhere to justify all sorts of things. What people that quote these useless statics fail to mention is that these “jobs” (If they exist at all) are usually low paying and lead nowhere. If you want to argue something, argue your point based on LOGIC and stop throwing around unproven statistics people! 8.8 million instead of 80,000??? I rest my case! 2) I wish that the problem with the cheap tomatoes was contained to tomatoes only, but low prices area sad part of every category in produce today. To make matters worse, this year’s unusually warm weather is not helping the situation either. This may very well be another though year for the Produce industry in general. Finally, I hate to be the bearer of bad news, but the problem of low prices is indicative of major current trends in our society and its here to stay unless a) we change our system radically (won’t happen) or b)we get crazy weather fluctuations that affect supply. Cheaper is NOT always BETTER and as long as ALL of us contribute to the problem we will continue going down this path of loosing companies and industries to cheaper imports. I wonder if the guy that came up with the brilliant idea of globalization ever thought about competing with countries that do not have our same environmental, sanitation, or quality of life standards… Humm??

Rodrigo    
Guadalajara, mexico  |  January, 22, 2012 at 07:08 PM

You can never establish a fixed market price and a fixed production. As an example you can take the milk problem in the european union. There is oversupply in both the USA and Mexico. At todays prices everybody is losing money. Tomatoes are selling at prices of 40 pesos a box ($2.90) in our local market.

Fernando de Saracho    
Culiacan mexico  |  January, 24, 2012 at 12:05 AM

'Deja-Moo' : ((The feeling that We've heard this Bull before)) get out while you still can;)

Robert    
USA  |  January, 27, 2012 at 04:41 PM

Does anyone believe that there is any merit to the concept that retail prices can have a major effect on consumption/movement/profitability for the grower? Does the fact that retail prices remain so incredibly high, and generally have no correlation to the retailers cost, play into the equation at all?

Paul DiMare    
Homestead, Fl.  |  January, 27, 2012 at 07:01 PM

This continues to be a serious problem I have encountered this problem with Mexico since the mid 60's. The Florida industry sued Mexico for dumping and actually won but U.S. Commerce forced us into a Suspension areement into Suspension Agreement at a set price, that does not help us in Florida, it is way too low. Our cost in Florida have doubled in the last 6 years and theirs probability have also. Hothouse and round tomatoes in Mexico are up 80% over last year while Florida is down 17%. Mexican Plums are up 26% while Florida is down 25% for the same time. This is not fair trade more like predatory pricing to knock out their competition. Pepper is having the same problems with Mexican over supply, and very low prices. These Farmers in Mexico must realize there are only so much product U.S. can handle.Florida farmers don't expect any guarantees but this is totally out of control. My suggestion is to impose Tariffs, Duties and Quotas or The Florida Vegetable Grower will become extinct like all these other industries that have left this this country, like TVs, steel ,televisions,Cell phones, shoes, textiles, Autos, furniture and so many more.e we can't even count them.We can't even count the number of jobs we have lost in Florida since NAFTA. the trade deficit with Mexico is now around 60 billion and before NAFTA we han a 6 Billion trade surplus. Every billion in trae wll create 17,000 jobs which translates into over 10 Million jobs back to the U.S. Wake up America before we have nothing left Paul DiMare .

TOM OBRIEN    
florida  |  January, 28, 2012 at 06:59 AM

I was never for tarrifs but I have to agree 100% with Paul Dimare,something has to be done,and its not just tomatoes and peppers lets throw berries into the mix now. And if anyone out there doesn't think the drug cartels have their dirty fingers into Mexican ag you are dreaming. Our government is alsleep at the switch when it comes to Mexico and China and I will repeat,WAKE UP AMERICA

Produce Guy    
Texas  |  January, 30, 2012 at 06:36 AM

We need to start a publicity campaign to educate the general public on the benefits of buying American. This campaign must emphasize the fact that our jobs and the welfare of our country are directly tied to us supporting and buying anything made or grown in America. The general consumer needs to understand that it’s not some “magical fairy in the sky” or someone else’s responsibility to fix problems, but theirs. Every time someone buys a cheaper import over something slightly more expensive made in this country they are voting to send our jobs overseas and to decrease our (and their) standard of living to that of the country where that import comes from. We would also hope that retailers “get it” and back this effort by putting their money where their mouth is. Otherwise we will end up with stores filled with cheap imports that no one can afford.

gen4frmby    
FLA  |  January, 31, 2012 at 01:23 PM

I agree with the trade issues and NAFTA killing agriculture in Florida is pure fact but how can the industry get together and make changes when comity members that would vote on a mode of action here in Florida would be voting to act against themselves in Mexico.`It seems to me that these companies are using domestic crops for a shipping convenience and making up for domestic losses by growing as much as they can as cheap as they can in Mexico. So to me the real question is how do you get a few millionaires and/ billionaires to lower profit percentages to help their competition survive? and my statement is Good Luck!

Ceasar    
Utah  |  February, 11, 2012 at 08:19 AM

Its nonsense and incredible that the solution you are asking for is limit competition and protect growers with anticommercial government impositions..... You are the ones causing the dumping to yourselves!!!.... 3 usd per box when dimare says in the article its 9-10usd the break even point!!!!! I buy and sell produce in Provo and have traveled several times to Mexico and Florida and have wittnessed the amount of investment done in both sides and its not even close!!!!.....This guys in Mexico have done their homework in 30 years, vine ripened hybrids, hothouses, packing sheds, housing for their workers.... what has florida tomato growers done since the first time i went to disney in Orlando (1993)?.... to my eyes nothing or very little..... how do you expect to remain competitive with zero investment when you had to? I buy gassed tommys when there's no Vine ripes available, wich buy the way i agree, now days they are practically 365 available Blame It on Mexico or other suppliers out of the staes? Your Honor......I rest my case

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