Growers defend end to Mexico agreement - The Packer

Growers defend end to Mexico agreement

11/30/2012 01:50:00 PM
Doug Ohlemeier

PALMETTO, Fla. — As the Commerce Department considers continuing or ending the U.S.-Mexican tomato suspension agreement, Florida grower-shippers are voicing their opinions on how ending the agreement could help them.

Established in 1996, the agreement sets floor prices on Mexican tomatoes entering the U.S.

Reggie Brown, executive vice president of the Maitland-based Florida Tomato Exchange, said Hurricane Sandy caused slight delays in the Commerce Department’s decision process and pushed back some deadlines for a ruling on the change of circumstances review sought by the Florida tomato industry.

He said the agency in October made a preliminary ruling allowing for the domestic industry to withdraw from the dumping case and agreement that mandates floor prices.

“We are continuing to work to ensure that happens,” Brown said. “We are looking forward to having a free and fair trade environment in tomatoes to hopefully repair some profitability to the tomato business for growers in the U.S.

“The agreement is problematic. The current agreement is unenforceable. It’s flawed in terms of its reference price and not meeting the required Commerce Department standard of 85% of the dumping margin as the minimum price. We are committed to the withdrawal process and have made the decision that the cost of such efforts is a good investment.”

Tony DiMare, vice president of the DiMare Co., Homestead, said Florida’s tomato industry doesn’t want to renew the agreement because the agreement has never worked.

“It has never been satisfactory, and, unfortunately, I don’t believe the agreement is enforceable,” he said. “To waste time to continue to listen to proposals and negotiate a deal that has never worked from our standpoint is proof in the pudding. We look to see what has happened. It’s not been beneficial to us.”

DiMare said an Oct. 18 Mexican proposal to increase the floor price of imported Mexican tomatoes 18% to 25%, depending on tomato variety, doesn’t keep up with inflation.

 

‘Continual circumvention’

Many Mexican growers who weren’t signatories to the agreement aren’t covered by the floor price, DiMare said, and said he hears of much circumvention of that price and sees cartons labeled “not for export” finding their way into the U.S. marketplace.

“There has been a continual circumvention of the agreement,” he said. “Some of that finding its way into the marketplace only causes problems.”

Bob Spencer, vice president and sales manager of West Coast Tomato Inc., said lifting the agreement could be revealing.

In the short term, a lifting of the floor price could create some low pricing of Mexican tomatoes, which would affect Florida’s wintertime market, he said.

“It will be interesting to see how good the Mexican industry is at self-regulation,” Spencer said. “If they in fact send a flood of product in because there isn’t a suspension agreement, they will be making a case for us in a dumping lawsuit.

“We know their costs that used to be $5.28-5.30 a box are now up to more like $7-8 a box. It will be interesting to see if they ship product into the U.S. at prices lower than that. Costs don’t go up just in the U.S. A lot of the products they use come from the U.S.”

 

Hoping for peace

Chuck Weisinger, president and chief executive officer of Fort Myers-based Weis-Buy Farms Inc., said he hopes both sides work out a compromise.

“I want peace in my lifetime. I don’t want a war,” he said. “The Florida and Mexican growers need to get together and work out some kind of agreement where we’re not shooting bullets or throwing flamethrowers at another rather than going to war.

“Things have gotten to the point to where 80% of the product we have today January through March seems to come from Mexico and they have a place for what they do. The Florida farming industry has taken some bruising losses in the last five years. We need some kind of compromise where everyone can live might benefit us all.”

The Commerce Department has until May to reach a final decision on the request from the Florida growers.

Brown said he isn’t certain when the industry can expect a decision.



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