While last year’s tariffs and trade tensions impacted the fresh produce industry around the globe, in Texas, which shares the largest U.S. border with Mexico, continuation of the U.S.-Mexico-Canada Agreement is top of mind with its first six-year review scheduled for July 1 this year.
The Texas A&M Center for North American Studies finds that during 2022 the U.S. exported $28.5 billion worth of agricultural products to Mexico, up from $4.67 billion since NAFTA took effect in 1994. That same study finds Texas agricultural exports to the country have contributed to the growth of total U.S. exports to Mexico. During 2022, Texas accounted for 19%, or $5.55 billion, of total U.S. exports to Mexico.
“In 2024, from Mexico through Texas by truck, we received 13.1 billion pounds of fresh produce,” says Dante Galeazzi, president and CEO of the Texas International Produce Association, which represents the business, economic and political interests of Texas-grown fruits and vegetables.
As the USMCA review approaches, TIPA is engaging with all three governments to shine a light on what’s at stake, he says.
“We want to be part of the conversation to remind folks in the administration — and not just in our administration — but in Canada and Mexico, of the importance of this agreement,” Galeazzi says. “Because it has really set the table for how fresh produce is exchanged in North America for over 30 years. And so, if we are going to look at changes, we have to be mindful of the impact, not just on future business but [also] on existing investments.”
Galeazzi points to multimillion-dollar produce facilities built in North America based on USMCA.
“If the agreement goes away, what happens to those investments? And furthermore, do you really want to put those investments in an even greater challenging position when the economy in all three of our countries is already in a challenging position?” he asks. “Don’t we want to be securing existing investments, with existing jobs, with existing profitability, rather than exposing all of those to potential damages during these trade agreements?”
While Galeazzi acknowledges USMCA isn’t perfect and aspects could use modernization, “we are pushing folks to remind all the administrations that the USMCA agreement has a lot of benefits,” he says.
There is also talk that the Trump administration may want to move to separate bilateral agreements with Mexico and Canada, he says.
“We are talking about a potential disruption to the supply chain, if the agreements are not handled correctly,” he says. “Now, I think there’s a way that we can move forward, both maintaining USMCA or going the direction of two bilaterals, but the point is we are trying to stress to all three countries that we have got to do as much as possible to not interrupt or disturb the flow of fresh produce.”
Investment and Opportunity in Age of Uncertainty
Despite these challenges, TIPA sees continued investment in Texas.
“We have people here that are still building warehouses in South Texas. We have people that are still planning on importing into the Port of Houston,” Galeazzi says. “We have growers who still want to expand their operations, but it’s hard to do that when so much of the business environment is outside of their control and covered by uncertainty.”
Gaining certainty with North American trading partners is key to unlocking opportunity, he notes.
“The sooner we get an agreement in place, the sooner everyone gets back to business,” Galeazzi says. “And the sooner we get the right agreement in place, the sooner those investments start flowing.
“There is a ton of opportunity and potential out there, but it’s bottled up right now,” he continues. “And the sooner we can get past that obstacle, the sooner those opportunities can be realized.”
Water, Labor and Tariffs Prove a Triple Threat
“Last year was an extremely challenging year, especially in terms of profitability, not just for our Texas growers but also for our importers,” Galeazzi says.
Weather and water shortages played a major role, says Galeazzi, who notes Texas water shortages led to decreased production of between 30% and 40% this season for growers in the state.
“A lot of the country is suffering from water shortages, and just like in Texas, we are seeing that result in production shortages or production limitations,” he says. “Now with limited supply, you would hope to see increased prices. Unfortunately, we didn’t see that. Instead, we saw increased cost of inputs. So, not only were you paying for tariffs, but you were also paying higher prices for just about everything it took to grow your crop: your ag inputs, your chemicals, your seed, your labor, your materials.
“Across the board prices went up, and a lot of that was driven by tariffs,” says Galeazzi, who adds the produce industry is still feeling the impact of tariffs.
“We get a lot of our ag equipment from Europe, where we still have some unfriendly tariff rates. We get a lot of our ag inputs, like fertilizers, from Canada, Eastern Europe and South America, all of which had tariffs at some point during the season last year,” he says. “So, you can see how this compounds the problem. Because if you’re already dealing with weak markets — and that’s tough on any given year — but now you add the increased price of inputs, and you add the impact of tariffs, and you add weak markets, come on, how many punches can our guys take?”
The perishability of fresh fruits and vegetables adds to the complexity and vulnerability of produce trade.
“Fresh produce is not like widgets. When it’s ready to go, it’s ready to go. That’s why last year in March, when there were three days of tariffs, guess who paid a lot of those tariffs? Fresh produce,” Galeazzi says. “We didn’t have a choice. We couldn’t sit around waiting to find out what was going to happen.”
While labor remains a universal challenge, Galeazzi sees some progress being made with H-2A reform.
“The government finally heard what we’ve been saying for the better part of a decade. ‘Your formula for AEWR [Adverse Effect Wage Rates] is not correct. The methodology is not correct. It can be better. Let us work with you and help you,” he says. “It only took 10 years of saying that and three court cases, but now they’re at the table ready to talk.”
Galeazzi says TIPA will join other organizations, led by Georgia, in Washington, D.C., in late February to have conversations with lawmakers about formulas, costs and other markers that can be used to determine an AEWR that “makes sense.”
“We’re not aiming for cheap labor; that’s not the goal,” Galeazzi says. “We want certainty, and we want a clear path forward. You can’t have a clear path when you are having to anticipate an X-percent increase on your labor year over year, without having any idea what that increase is going to be.
“Texas is growing its H-2A use, and what I’m hearing from our farmers is they really love the quality of worker they’re getting with H-2A. Where they’re challenged is a lot of the bureaucracy of applying for those workers,” he says.
Viva Fresh 2026 Returns to San Antonio
Opportunities for driving growth in fresh produce still abound, and it’s these opportunities that Galeazzi says the industry will have the chance to embrace at Viva Fresh Expo 2026.
Hosted by TIPA, this year’s Viva Fresh is set to take place at the JW Marriott San Antonio Hill Country Resort & Spa, April 16-18.
“I love Viva Fresh because it’s an industry event, but it really feels like a gathering of friends,” Galeazzi says. “You actually have this chance to sit down and visit with people and engage and network and build those relationships.”
This year’s Viva Fresh promises ample opportunity for connection, he says. From golf to pickleball to a wine experience to the expo floor, Viva Fresh combines networking, education and fun.
“Viva Fresh is really an opportunity for us to celebrate the region,” he says. “There are so many cool things that happen here in our region. Texas is the land of eternal summer, except for about three or four days where we get crazy winter storms. And we have so many people who are constantly pushing new ideas, that are building new enterprises, that are bringing new things to life, and Viva Fresh is the celebration of that.”
