Tomato plan unreasonable, FPAA says

02/02/2013 08:47:00 PM
Tom Karst

After being briefed on the deal by the Commerce Department officials, the Florida Tomato Exchange and Certified Greenhouse Farmers released a statement expressing "tentative support" for the revised suspension agreement.

"The agreement as it is currently structured is a step forward," said Reggie Brown, executive vice president of the Florida Tomato Exchange, Maitland, Fla. Brown said the agreement's higher prices validate the contention of U.S. growers that they have been dumped on for some period of time by Mexican tomato imports. "We still feel very strongly that the cost of  production is essential to determining what the correct reference price should be and we look forward in the future for Commerce to obtain that information and adjust the reference prices on that basis."

Martin Ley, vice president of Nogales, Ariz.-based Del Campo Supreme Inc. and spokesman for a consortium of Mexican tomato growers who negotiated the suspension agreement, said in a statement that those growers offered substantial concessions in negotiations over the past year to preserve the suspension agreement.
 
“Even though no dumping or injury to the U.S. industry was demonstrated by our competitors, over the last year our growers worked with our government to overhaul the whole Mexican industry, broaden the coverage and develop tough enforcement schemes," Ley said in the statement.

Ley said the new floor prices will impose hardships on the Mexican industry, but growers hope the agreement will bring long-term benefits.

"Our compromises are expressions of trust and good faith, the essential ingredients to any bilateral trade relationship, and we look forward to similar expressions of cooperation and good will as we head into the comment period," he said in the statement.

The effective date of any final agreement is projected to be March 4, according to a fact sheet provided by the Commerce Department. 

The new reference prices for open-field and adapted-environment tomatoes are 31 cents per pound in the winter and 24.58 cents per pound in the summer, according to the fact sheet. For controlled-environment  tomatoes, the price for winter tomatoes is 41 cents per pound, while the summer price for controlled-environment tomatoes is 32.51 cents per pound. 

Comments (29) Leave a comment 

This comment has been deleted.

Open-field; adapted-environment; controlled-environment (greenhouse); winter tomatoes; summer tomatoes; specialty loose tomatoes; specialty packed tomatoes; shade house; hothouse or vine ripe; good arrival; fails to minimum standards.

It's more than a reference price (since the minimum is a reference price, that in itself is a loophole.)

Suggestion - include customers (receivers) in writing the policies or, as J. Oliver stated "memory lane one more time."

Well, the Florida Dept. of AG should be auditing import (Mexican) dealers to make sure that they are "selling" above "floor" pricing!

How about we all( Mexican And US growers) stop growing so many tomatoes. Let a market be a real market and we wont have to worry minimums

At the end it seems to be a struggle between Cuban and Mexican immigrants into the US At the end the NAFTA, as well as the UNO, means nothing. The law is meaningless when it goes against one´s pocket.

Do not forget about the "phantom" sales to a Canadian Invoicing address and the tomatoes are delivered to Dallas-Los Angeles-Philadelphia or any where you want them delivered!

Is that the way you conduct business Daniel?

Sounds about right for all of you from Nogales!

Both sides seem a little/a lot disappointed in the deal. Reminds me of the proverb:

"Bad, bad," says the buyer, But when he goes his way, then he boasts."

Should be interesting to get some buying side reaction and see how this sorts out...

Tom K

In such a perfect world!

Juan, no such as a free lunch.

The Mexicans grow items cheaper and better than American farmers do. On the other hand we are talking about the supply of food to our country and I think a country should always protect its domestic food supply.

Now there's a concept! Let the market sort it out!

A floor price means nothing when they bill 500 @ 42.00 and then ship 1000 - now you're back to 21.00

Free markets should not be coerced into a direction by corporations-it does not make
them efficient. The issue with this agreement is that it involves too many private
interests. As with most political negotiations-there will always be private interests that
take focus away from the real issues (market equilibrium) for their own personal
gain. Raising the floor price does not provide market equilibrium, but an incentive for
market manipulation. Anti-dumping regulations/measures have been long been
argued to serve domestic firms and special interests. It provides incentive for
predatory pricing in which large production firms can injure its foreign competitors by
undercutting its prices, driving the competitor out of business, then later raising prices
to capitalize on market share.
Where is the regulation? Let’s not just make “plans” to make things better, but
enforce those plans that should make this a better marketplace for everyone in the
supply chain. The domestic industry that is arguing foul play should be part of the
investigation as much as the foreign industry. Monopolies are made by political
incentives and industry ignorance by those politicians implementing the policy. Until
examples are made on those who are trying to ‘fix’ the market in their favor-this
show will always be rigged for volatility and inefficiency.

This type of agreement is very disturbing. It reconfirms the arm twisting by a regional
commodity industry. Ultimately the consumer is held hostage on quality but also on
price. It is a shame that the Chamber of Commerce is playing contradictory policies
when it comes to free trade.
Why not focus on food safety, nutrition and health through the consumption of
tomatoes, regardless how we produce them. Soon we will need price special
protection for greenhouse tomatoes, and other specialty pack.
Florida will have to grow up and find ways to entice the food service and consumer to
buy products at a premium price.

Well articulated and should be embraced by all parties!

Thanks,

Robert

No one is talking about the consumer who will have to pay for this agreement. I am sure if this was left up to the consumer they would not ratify this. Though what do they know-right. It just comes out of their pocket.

Yes, TK, it WILL be interesting to get the sentiment of receivers in general. Fact is, most folks at destination WANT a better market, but legitimately. Higher prices (in theory) improve margins and frankly keep smaller wholesalers from becoming FOB buyers, which keeps the produce chain in line, so to speak. At the same time, I think they want the small and large growers alilke to be profitable so there is a wider palette of product to choose from.

Maybe, but their soil is contaminated and the produce is probably NOT Safe to EAT!

yeah, the guys who counted the hanging chads can audit the importers. Strange a dealer is sanctioned for selling below the reference price but there is no sanction on the buy side.

Fear-Mongering from Florida (Max's unsubstantiated claims)

Evolution; The end of an era.

You don't need so much labor, and you have better control of the environment.

The unpredictable freezes will still get the fish. You would still need to place a some
sort of plastic tarp on top of that sandy acid soil in Imokalee to keep drainage to a
minimum, although evaporation will be at a maximum during the summer.

That would be Aquaculture, as an option for Florida tomato farmers.

PS-
You would still need some sort of food safety guidelines tho.

We no longer have "free markets". Since Obama, now we have "fair markets".

Socialism one step at a time.

Hey Max, are you the one who chained your workers to the packing line a couple years ago? Then threw tomatoes at them when they weren't working fast enough? Reported in the press? Abusing immigrants? Shame on the FL hypocrites.

why was this comment deleted?

to much heat in the Nogales kitchen?

Lets wake up, the problem is not Florida/California vs Mexico but all of us verse the chains. Tomatoes are sold at the FOB level at 22cents/lb and the chains are selling them for $1.99 to $2.99 per pound. Food service will take their weekly amounts because they are on contracts and the new suspension levels will only increase the price of their contracts which will get passed on to consumers. We have taken tomatoes from a staple to a specialty item. Whats next lettuce?

Mexico is dumping right now, tomatoes in the stores in Mexico are sky high in price but the laundering of money has to continue what ever it cost.

Your right on the money Dale.

Elaborate on your argument please. Have you even been to México, have you tested soil samples for what you called contamination? Have you tested produce samples to determine it´s not safe to eat?

I am sure you are capable of building better arguments, make an effort.