Tomato Suspension Agreement is an ‘Economic Engine,’ says FPAA President Lance Jungmeyer

Industry opinions differ on the best path forward for the Tomato Suspension Agreement, with the Florida Tomato Exchange, Texas tomato growers, greenhouse growers and industry organizations all weighing in as the agreement nears the end of its 90-day implementation period.

Lance Jungmeyer, president of the Fresh Produce Association of the Americas, recently shared his take on the Tomato Suspension Agreement with The Packer via email.

(Photo courtesy of Lance Jungmeyer)

You’ve said the Tomato Suspension Agreement is an economic engine that contributes more than $8 billion annually to the U.S. economy and supports nearly 50,000 jobs across multiple industries. What do you say to those who argue the Department of Commerce has found Mexican exporters have dumped tomatoes into the U.S. market below their cost of production and by margins as high as 273%?

Jungmeyer: Since the 2019 agreement took effect, the Department of Commerce has not found a single violation of that agreement, including the requirement to eliminate dumping. The 273% margin refers to data from 1995. Obviously, the market has changed considerably over the past 30 years.

Do you see this as a Florida tomato grower versus Mexico tomato grower issue?

This is not a Florida versus Mexico issue. Rather, it reflects a deeper divide between Florida and states like Texas and Arizona. It’s also a debate between traditional open-field cultivation of mature green tomatoes and the innovative greenhouse production of vine-ripe tomatoes.

Over 30 members of Congress from both parties and both chambers and from several states have urged the Department of Commerce to maintain the agreement. Nearly 500 U.S. industry associations and companies have likewise asked the Department of Commerce to maintain the agreement.

In the fall of 2023, the Arizona Legislature passed a resolution in support of the 2019 Tomato Suspension Agreement, and just last week, Governor Abbott of Texas signed a resolution into law in the state that underscores the importance of the agreement to the economy of Texas. The truth is that U.S. businesses and U.S. consumers will be the losers if the agreement is terminated and not renegotiated and modernized.

What is your response to Florida tomato growers who say Mexican tomato imports have used unfair trade practices to increase volume to over 70% of the U.S. market?

The 2019 agreement and its predecessor never guaranteed anyone a specific share of the market. Instead, it leveled the playing field through higher prices.

Tomato imports from Mexico are not the cause of the loss in market share by Florida tomato growers. Adverse weather events, labor shortages, soil salinity and urbanization in Florida have all caused a loss of market share. In recent years, Florida growers have invested tens of millions of dollars in tomato growing operations in Mexico, which have contributed to the shifts in market share and increase in imports.

Are you confident the U.S. can enforce fair trade laws for tomatoes imported from Mexico?

Again, the Department of Commerce has not found a single violation of the 2019 agreement after conducting numerous and rigorous monitoring and enforcement actions since the agreement took effect. Growers in Mexico and their U.S. selling agents have answered over 300 questionnaires since 2019, submitted over 5,000 quarterly certifications, and participated in five intensive annual reviews. In fact, the 2019 agreement has more enforcement and monitoring mechanisms than any other suspension agreement that the Department of Commerce administers, including an agreement covering uranium imports from Russia.

How would the termination of the Tomato Suspension Agreement impact Mexico-U.S. tomato trade?

A cash deposit of 17% will apply to most tomato imports from Mexico if the Department of Commerce terminates the agreement, and some form of a deposit would be in effect for at least two and a half years. While the Department of Commerce might ultimately refund some of those deposits, imports would still need to have the capital to pay those deposits for two and a half years. The truth is that most growers and importers in this industry do not have those financial resources at their disposal.

Moreover, the deposit rate could increase after two and a half years, requiring all importers to then also pay the difference for the two-and-a-half-year look back period, putting further financial strain on importers. This makes the surety requirement far more risky, costly and burdensome. In view of these costs, and the uncertainty regarding total duties owed, many growers will simply get out of the business of growing tomatoes, causing a dramatic decline in the supply of tomatoes from Mexico.

Having imports from Mexico is a good thing, particularly because Florida is prone to adverse weather events, soil issues, labor shortages and rapid urbanization.

And in a market that increasingly prefers vine-ripened and specialty tomatoes, termination of the Tomato Suspension Agreement, which is anticipated to reduce the supply of such tomatoes, would send prices skyrocketing as demand remains constant or increases. Tens of thousands of jobs could be lost in the U.S., and over $8 billion in economic activity for the U.S. economy could be lost.

Job losses in Mexico stemming from the termination of the agreement could also be detrimental to the U.S.-Mexico relationship. The government of Mexico has already raised the possibility of retaliatory measures on U.S. pork and poultry exports to Mexico if the Department of Commerce terminates the agreement. Moreover, growers in Mexico employ hundreds of thousands of migrant workers on their farms and provide them with housing, health care, child care and schooling for their children, along with fair wages and other benefits. If growers in Mexico are forced to cut jobs for those workers due to the termination of the agreement, those workers could look for employment in the U.S., which has the potential to undermine the border security gains obtained by the administration since January 2025.

The bottom line is that the 2019 agreement provides certainty for the market, which would disappear if the agreement goes away. In 2019 there was only a preliminary determination, and the agreement was actively being renegotiated. Moreover, deposits were imposed in 2019 during the summer, when the volume of tomato imports from Mexico are historically low. The circumstances were temporary and much different.

In a recent interview with The Packer, Robert Guenther, executive vice president of the Florida Tomato Exchange, said “the evidence of dumping and injury is overwhelming.” What do you say to that?

The Department of Commerce’s valid dumping findings are based on 30-year-old data. The truth is that the department has found zero violations, and the anti-dumping duties are based on an investigation performed on a few companies — most of which no longer exist — back in 1995, when less than 10% of the U.S. population had email.

The 2019 Tomato Suspension Agreement and its predecessors have leveled the playing field. In response to that level playing field, the Mexican industry invested in itself, building state-of-the-art growing and packing facilities and developing supply chains that met changing consumer preferences in the U.S. for specialty and vine-ripened tomatoes. U.S. importers working with Mexican growers have simply outcompeted Florida. Florida does not have a price problem; they have a failure to innovate problem.

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