High prices keep U.S.-Mexico tomato deal largely untested - The Packer

High prices keep U.S.-Mexico tomato deal largely untested

12/06/2013 11:48:00 AM
Doug Ohlemeier

HOMESTEAD, Fla. — As the legal wrangling in the U.S.-Mexican tomato suspension agreement works its way through the courts and regulatory agencies, grower-shippers are expressing their opinions on the agreement.

Last fall, the Maitland-based Florida Tomato Exchange filed documents with the Commerce Department and the U.S. International Trade Commission requesting withdrawal from a 1996 anti-dumping duty petition.

In March, Commerce Department officials and Mexican growers OK’d a new agreement.

In April, the exchange filed a lawsuit against the Commerce Department seeking to end the agreement, which sets different floor prices for Mexican fresh tomatoes during the summer and winter and also specifies prices for open field/adapted-environment and controlled-environment production.

 

No time to evaluate

The new agreement’s prices weren’t established until March, so there wasn’t enough time left in Florida’s season to evaluate its effectiveness, said Tony DiMare, vice president of the DiMare Co.

By then, Mexican growers’ crops were already in the ground, he said.

The agreement is meaningless until prices fall to the minimum price level, DiMare said.

“When you have high prices all the way through, it never comes into play, so there’s no worries,” he said. “But when it gets to that level, it’s the circumvention that has taken place when produce has been sold less than the reference price.

“From what I understand, there’s been an adjustment in acreage in Mexico, which is the way it should be,” DiMare said. “You can’t continue to grow all this acreage you’ve been growing and expect to maintain orderly marketing, and more importantly, the minimal reference price.”

 

Support not universal

Don’t count Pacific Tomato Growers Ltd., Palmetto, as one of the supporters of the agreement or the growers’ legal actions.

The grower-shipper last year resigned memberships in the Florida Tomato Exchange and the Florida Tomato Growers Exchange over the legal action.

“Pacific Tomato Growers does not support any of the activities by Florida against the producers in Mexico,” said Jon Esformes, operating partner.

“We have been very vocal about that. We don’t feel it’s good for our industry, for the consumer or for our customers. We as a company are absolutely opposed to any type of legal actions related to the dumping and will not support them in any shape or form.”

Esformes said any action that interferes with free and open competition in agriculture, particularly in perishables, is bad for growers.

Bob Spencer, vice president and sales manager of Palmetto-based West Coast Tomato Inc., said the agreement hasn’t been tested.

“Last year, we had a pretty good market,” he said. “Prices stayed well above the floor price. It didn’t test the agreement too rigorously. I would hope that would be the case again this year. We will really find out how well the agreement works is when we have a cheap tomato market.”

Chuck Weisinger, president and chief executive officer of Weis-Buy Farms Inc., Fort Myers, said time will tell how the dispute goes.

“Eventually, they (Mexican growers) will bump up against us in the suspension agreement,” he said. “What happens when they do have a problem with the minimums? I don’t know who’s suing who, but so far we haven’t been close to the minimums on anything.”



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