Fewer Mexican tomatoes buoy Florida’s season

09/05/2013 12:29:00 PM
Vicky Boyd

Candace Anderson, Arlen Wood and Greg Styers of Bejo Seeds.Vicky BoydCandace Anderson (from left), Arlen Wood and Greg Styers, all of Oceana, Calif.-based Bejo Seeds, grab some coffee before the start of the 2013 Tomato Institute.NAPLES, Fla. — Although the 2012-13 tomato season proved much more profitable than the previous season for Florida growers, packers and shippers, the industry continues to move forward on its legal challenge of the latest suspension agreement.

“The 2012-13 season was a season of low yields with relatively high prices, which is very typical of this supply and demand scenario,” said Reggie Brown, executive vice president of the Maitland-based Florida Tomato Exchange.

He presented the industry wrap-up during the 2013 Tomato Institute, Sept. 4.

The 35.5 million 25-pound boxes of round tomatoes harvested this season is down about 7% from the previous year.

During the same period, the average value for a box was $10.64 throughout the season, compared to the price the previous season — which Brown described as a financial disaster — of $6.62 per box.

During the 2012-13 season, prices ranged from less than $5 per box to $15.06 per box.

One reason for the improved overall pricing was 24% fewer field-grown and 14% fewer greenhouse-grown tomato imports from Mexico.

“Part of that reduction came to some degree from the uncertainty from the trade initiative undertaken by the domestic tomato industry,” Brown said.

The initiative to which he referred involved the U.S. tomato industry’s June 2012 request to suspend an anti-dumping duty investigation on Mexican fresh-market tomato imports dating back 16 years. The request also sought to terminate an existing suspension agreement, which had set minimum prices for Mexican tomato imports.

On March 4, the U.S. Commerce Department, the Mexican tomato industry and the Mexican government entered into a new suspension agreement that “has changed the market structure for the near term at the border,” Brown said.

The agreement raised the reference, or floor, price to 31 cents per pound from the previous 21.86 cents per pound for field-grown tomatoes from Oct. 23 through June 30. The agreement also established even higher reference prices for other categories, including tomatoes grown in a controlled environment and packaged specialty tomatoes.

“Are these prices representative of the cost of production?” Brown asked. “I seriously doubt it. They’re higher than 21.86 cents per pound, but you can do the math as well as I can.”

The U.S. tomato industry filed a lawsuit with the U.S. Court of International Trade, New York, on May 1, challenging the Commerce Department’s decision and the figures it used in making that decision. He said he didn’t expect a quick resolution.

“In the meantime, we have prices that are significantly higher than they were,” Brown said. “Does it make a difference? We shall see.”

But for the first time, the U.S. Department of Agriculture will be enforcing the suspension agreement through the Perishable Agricultural Commodities Act process, he said.

“We hope they will ensure there’s strong compliance with the agreement as it is written,” he said.

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