Tell it to The Packer | Letter to the Editor
Lance Jungmeyer, president
Fresh Produce Association of the Americas
In the Nov. 5 edition, Reggie Brown of the Florida Tomato Committee uses misleading information and faulty mathematics in his criticism of the tomato trade agreement between the United States and Mexico (“Time to take a fair look at the tomato trade”).
Mr. Brown asserts that the current reference price under the tomato agreement is only 21% of the cost of production in Mexico.
To arrive at this number, he references a 2007 Mexican government study that looked at marginal producers of 0.1 hectares to 5 hectares, which cannot be considered representative of the Mexican commercial tomato exporting industry.
This study was produced to determine the feasibility and credit-worthiness of new projects of this size. In the end, the study deemed that projects of this size were not feasible or creditworthy.
It is misleading to assert that small projects such as this have the same cost structure as larger commercial operations.
In Sinaloa, for instance, there are numerous greenhouse operations of 100 hectares or larger.
But it is the faulty math that is most misleading, and embarrassingly so.
In a filing with the Department of Commerce, Mr. Brown’s group references this same study, but instead inflates the size of the operations to 20 hectares to 50 hectares.
Furthermore, Mr. Brown’s group overstated the company sizes of these farms by 1000%, by incorrectly converting square meters to hectares.
In reality, 10,000 square meters equals 1 hectare.
Yet Mr. Brown’s group relied on a conversion factor wherein 1,000 square meters equals 1 hectare.
Faulty mathematics aside, the notion that an entire industry of thousands of Mexican tomato producers could collude to sell at only 21% of their costs for a long period of time stretches the imagination.
The fact is, Mexican tomato producers have evolved and become more productive.
The seed varieties typically grown in Mexican greenhouses produce fruit sets that allow the plant to be harvested vine-ripe about every other day for up a period of 15-20 weeks. This results in astounding levels of production.
By contrast, because a typical pole-grown Florida tomato must be picked green, it is picked only two to three times.
Mr. Brown is right that his growers’ situation is unsustainable. Under conditions like this, they clearly cannot compete.
And Mr. Brown has said repeatedly that his eventual plan is to seek relief under U.S. trade law.
The real question is: Why should the federal government reward an uncompetitive industry by limiting its competition? In the end, this will only raise prices for consumers.