Photo by Mitch Perry | Florida Phoenix
The U.S. Department of Commerce’s announcement that it will withdraw from an agreement with Mexico controlling tomato imports is being applauded by Florida lawmakers, who say it will allow Florida and other U.S. farmers to catch up to what the agency has labeled “unfairly produced Mexican imports.”
But the proposal is fiercely opposed by lawmakers in Arizona and Texas, who claim the tariff being placed on Mexican tomatoes will harm their own economies and provide consumers with less choice and higher prices.
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There’s no question that right now the winners in this situation are Florida tomato growers, who for years have been calling upon the Commerce Department to terminate the 2019 Tomato Suspension Agreement (TSA).
They contend that growers in Mexico have been selling their products at below U.S. market prices — a practice known as “dumping.” The Commerce Department’s decision, announced in April, means there will soon be a 17.09% tariff on Mexican tomatoes, which now dominate the U.S. market.
“The termination of the suspension agreement will allow U.S. tomato growers to compete fairly in the marketplace,” reads a letter penned by Sens. Rick Scott and Ashley Moody and a dozen Florida Republican U.S. House members upon the announcement that the TSA will be terminated.
“This has been a priority of ours for years in Florida,” added North Central Florida GOP U.S. Rep. Kat Cammack in a separate statement. “For half a decade now, our producers have been subject to an unfair marketplace. In the past five years alone, Mexican tomato producers have violated the suspension agreement over 100 times. The economic impact of these violations has been catastrophic on our domestic tomato producers.”
Dispute over Mexican tomato agreement threatens AZ with economic loss, ballooning prices
No one disputes that the industry isn’t what it once was in the Sunshine State. Industry officials observe that going back to when the first Tomato Suspension Agreement was reached in the mid-1990s, there were almost 300 tomato producers in Florida. Now they say, there’s just a few more than 30.
“There have been over 100 incidents documented of violations by the Mexicans by the Commerce Department, so this is just a reoccurring problem that has devastated our industry,” said Tony DiMare, president of DiMare Fresh, a produce repacking and distributing company that started business in Boston 97 years ago and has maintained shipping operations in both California and Florida for decades.
In 2023, Florida produced $494 million of fresh market tomatoes, according to the Department of Agriculture and Consumer Services. That’s second only to California in the U.S. However, the Golden State tomatoes are primarily used for processing into products like ketchup, tomato paste and other sauces, whereas most of Florida’s tomato crops are for fresh market consumption.
Although the Commerce Department’s decision to kill the TSA is a welcome boost for tomato growers in Florida, Georgia, and other states in the South that grow tomatoes, it’s been denounced elsewhere, specifically Arizona and Texas. U.S. importers there they say the tariffs will result in higher costs for them, leading to higher prices for consumers.
Last month, Texas Republican Gov. Greg Abbott signed a resolution encouraging the Department of Commerce to maintain the existing TSA rather than terminate it. In April, Arizona Democratic U.S. Sen. Ruben Gallego sent his own letter to Commerce Secretary Howard Lutnick, calling upon him to keep the suspension agreement in place.
“The result of terminating this agreement will be higher prices for American families, few options at the grocery store, and fewer American jobs. Indeed, studies show that families could see tomato prices rise by an average of 50% if your Department does not reverse course,” Gallego wrote.
Officials in those states also cite an economic analysis from Texas A&M University, published earlier this year, estimating the direct and indirect economic benefits associated with the import and sale of Mexican fresh tomatoes in the U.S. at $8.33 billion, with fresh tomato imports supporting more than 46,000 full- and part-time jobs across the United States.
Robert Guenther, executive vice president of the Florida Tomato Exchange (FTE), says that the termination of the TSA will allow U.S. growers to stay in business, keep people employed, and save family farms. And he insists that consumers won’t be hit with higher prices.
“We do not expect any significant changes with retail prices for consumers with the termination of the agreement,” he told NPR last month.
DiMare noted that when the TSA was terminated for four months in 2019, “prices actually went down at that period of time.” And he rejects terming the penalty on Mexican tomatoes a tariff. He insists it’s an anti-dumping penalty for violating U.S. trade law.
“When we negotiate all of these fair trade agreements, there are parameters,” he said. “There are guidelines with which trading countries have to comply, and if those guidelines are not adhered to and rules are broken, there are penalties. And the penalties in this case for numerous years of violations of adhering to the minimum reference price is the anti-dumping duties.”
The greenhouse revolution
The first Tomato Suspension Agreement between the United States and Mexico was enacted on Nov. 1, 1996, nearly three years after NAFTA (the North American Free Trade Agreement) began. The rules evolved following an antidumping investigation aimed at detecting whether fresh tomatoes from Mexico were being sold at less than fair market value.
Under the ’96 TSA, Mexican producers agreed to sell fresh tomatoes in the United States at set reference prices, with the U.S. suspending the anti-dumping investigation. Since then, revised suspension agreements were reached in 2002, 2008, 2013, and most recently on Sept. 19, 2019.
In 2023, FTE, the Florida exchange, asked the Department of Commerce to terminate the 2019 agreement, saying lingering loopholes remained a problem.
“It’s become clear that these agreements are simply not enforceable, at least when it comes to the tomato trade with Mexico,” said Michael Schadler, then-executive vice president of the FTE. “Suspension agreements might be an effective tool for products that can be kept in storage until market conditions improve but, for highly perishable items like fresh tomatoes, there is just too much incentive to evade the reference prices when markets are oversupplied.”
However, representatives from other parts of the country argue the tomato market has evolved since the mid 1990s, when the first suspension agreement went into effect. Mexican imports have superseded Florida’s home-grown tomatoes because of what they call the “greenhouse revolution” — a new way of farming embraced by Mexican, Canadian, and some U.S. tomato growers, but not in Florida.
By the early 2020s, greenhouse tomatoes represented 60% of the total fresh tomato import volume, according to the U.S. Department of Agriculture (USDA). By investing in greenhouse technology, Mexican growers have been able to grow specialty tomatoes versus the mainly round tomatoes produced in Florida, said Skip Hulett, chief legal officer of NatureSweet, a Texas company that grows and sells greenhouse tomatoes in Mexico and the United States.
“The market has evolved dramatically since 1995-1996, and so consumers now expect the greenhouse-grown vine-ripe varieties, like the grape and the cherry, many of which didn’t exist in the ’90s,” he said.
“The domestic growers who petitioned Commerce for duties have failed to innovate, growing what in the industry are called ‘gas green tomatoes’ or round tomatoes that are picked green and then induced to turn a pale red after being placed in gas rooms and exposed to ethylene gas,” the Fresh Produce Association of the Americas says in a press release. “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.”
DiMare objects to that claim.
“Yes, the Mexican industry has shifted their way of growing to a greenhouse product, but the actual production of the type of tomatoes is the same, whether it’s greenhouse produced or open field produced,” he said. “A round tomato is a round tomato. A Roma tomato is a Roma tomato. And we all share and compete at times in the marketplace with our products.”
A matter of taste
William Alexander is the author of 2022’s “Ten Tomatoes that Changed the World,” a history of the tomato. He argues the problem with Florida tomatoes is that they’re “not bred to taste good.”
“These are green and rock hard and they’re bred for all kinds of things — to look pretty, to look fresh after they’re sliced, to look exactly the right size to withstand all of the horrible weather that you can have in Florida, and they’re not able to do all of that and also to breed for flavor,” he told the Phoenix.
Alexander recently wrote an op-ed in The New York Times, contending that the “last thing that American consumers need is a revitalization of Florida’s withering tomato industry.”
Florida’s natural environment isn’t conducive to producing great tomatoes, Alexander says, referring to the fact that they’re grown in sandy soil. “That sand never freezes, unlike a New Jersey field, and so it never kills off things like nematodes” he said.
For his part, Robert Guenther of the Florida Tomato Exchange told NPR recently that “there are no differences between quality, freshness, taste of tomatoes.”
With the clock ticking before the TSA is officially terminated, the lobbying is expected to prove intense on both sides of the issue. Whether that will result in a higher price of tomatoes is unclear.
“We certainly anticipate that if the tariffs do go into effect,” said Tom Stenzel, executive director of the Controlled Environment Agriculture Alliance, a membership trade association representing greenhouse producers growing fruits and vegetables in a controlled indoor environment.
“That’s not going to happen,” DiMare insists. “I don’t see that prices are going to escalate because the agreement is going to terminate.”
The termination of the TSA is set for July 14.
Florida Phoenix is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Florida Phoenix maintains editorial independence. Contact Editor Michael Moline for questions: [email protected].
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