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US: Mexican tomatoes and strawberries worry Florida growers
Mexican imports will likely rise less steeply in the fourth quarter because farmers in both countries faced many of the same unfavorable growing conditions, said Ted Campbell, executive director of the Florida Strawberry Growers Association in Dover, the industry's trade group.
But that doesn't mean the Mexican market threat has subsided, Campbell tells The Ledger
"They're not going away. They're going to continue to grow," Campbell said. "You can't ignore what's going on."
Mexican tomato imports also have risen significantly, up 43.7 percent from 2008 through 2011 and another 5.6 percent in the first three quarters of 2012 compared with 2011, USDA figures show.
Those numbers reflect Mexican imports of round tomatoes grown in open fields and in "hothouses," or covered areas such as a greenhouse. Those varieties most directly compete with Florida round tomatoes, the dominant variety grown here.
Mexican hothouse tomatoes, which account for about 75 percent of total imports, pose the bigger threat, federal data shows. They've risen 74 percent from 2008 through 2011.
"In the last five to six years, Mexico has converted from a field culture to a hothouse culture," said John VanSickle, an agricultural economist at the University of Florida in Gainesville who specializes in international trade issues, including tomatoes and strawberries.
That trend will continue, he said. Among the factors fueling the transition are better prices and lower production costs, including pesticides, which appeals to U.S. consumers concerned about chemical residues on produce.
Even at the time of the 1994 North American Free Trade Agreement, Mexican tomatoes had a roughly 40 percent share of the U.S. market, said Reggie Brown, chief executive of the Maitland-based Florida Tomato Exchange, the industry trade group. Now, its share has grown to about 50 percent currently, and it continues to climb.
Florida currently has a 40 percent annual share of the U.S. market for fresh, field-grown, round tomatoes, Brown said, and it supplies virtually all of the domestic market in that category between December and May.
Mexican competition has sent Florida's tomato acreage down by more than 26 percent in the past decade, from 43,500 acres in the 2001-02 season to 32,000 acres in 2010-11, according to the USDA. Brown estimated the current total at about 30,000 acres.
"It's almost entirely due to Mexican imports," said Tony DiMare, vice president of DiMare Fresh Inc., one of the top three U.S. tomato growers and shippers. DiMare works at the company's Apollo Beach packinghouse.
Mexican imports had their biggest effect on the U.S. tomato and strawberry markets during the 2011-12 season, when a flood of both commodities sent prices plummeting, Florida growers said.
"We had such depressed prices last year, we couldn't recover our picking, packing and transportation costs," DiMare said.
Wholesale strawberry prices a year ago fell to $7 per flat, the break-even point, by Christmas, Campbell and other growers said. Prices recovered briefly in January but sank again the following month.
Because of lower volumes, wholesale strawberry prices returned to normal levels this season, USDA figures show. Prices averaged about $26 per flat in early December, when Florida is the exclusive domestic strawberry producer. Those prices were about $17.50 on Thursday.
Florida strawberry growers generally harvest until March, when California production ramps up, sending wholesale price below the break-even point.
The state's tomato and strawberry growers can compete with Mexico, but both will have to transition to newer technologies, including following their Mexican competitors by turning to "covered agriculture," said VanSickle, who consults for Florida tomato growers. That would include growing in traditional greenhouses or other closed environments, such as large plastic tunnels put up over an entire crop row.
DiMare and Brown, however, said the Florida climate makes covered agricultural production unworkable and cost-prohibitive.
The price to build a one-acre greenhouse, including temperature controls, would run about $1 million, Brown said.
An acre of plastic tunnels over strawberries would cost $30,000, Campbell said, and all could be blown away with a single hurricane or tropical storm.
VanSickle acknowledged a transition would come with big up-front costs, but he maintained growers, particularly tomato growers, could recover by supplying a better product that would fetch a higher market price.
"In this era, consumers are willing to pay more for a better-tasting tomato," VanSickle said. "If they want to compete, they've got to change the way they're doing business."
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