As Mexico increases its tomato exports across the globe — including into the U.S. — prices continue to plummet for American growers. According to a new study, that practice could cost domestic producers as much as $252 million per year if imports from Mexico increase by 50% in coming years, based on historical trends.
That decline is due to competition from Mexico and other challenges, says Zhengfei Guan, a UF/IFAS Associate Professor and leader of the study. In 2020, American farmers produced 1.3 billion pounds of fresh tomatoes, which was less than one-third the harvest from 2000.
The market positions of Mexican and domestic tomato industries have completely reversed over the past 20 years. Mexico now dominates the U.S. market, with three times more market share than the domestic industry. That change sparked Guan’s interest in pursuing the new study.
“The two countries had a series of trade disputes over fruit and vegetables recently,” he says. “One reason is that surging imports from Mexico boosted by subsidies have depressed prices, and American growers are quickly losing market shares. The findings from our study will provide tomato producers and policy makers with important insights on the challenges and the sustainability of the U.S. tomato industry.”
In his study, Guan measured the potential losses the U.S. industry will sustain as a result of the increasing imports from Mexico, given the steep growth over the years. As a frame of reference, the volume of imported tomatoes from Mexico increased by about 60% over the years 2009-2019.
The imports are especially damaging to the Florida tomato industry, which has about $400 million in sales and has the same harvest seasons as Mexico.
The trade deficit complicates matters for growers in several specialty crop commodities – not just tomatoes. Specifically, specialty crops — such as tomatoes, strawberries, peppers, cucumbers, and melons – accounted for 50% of the total U.S. agricultural imports from Mexico in 2020, according to USDA stats.
Guan says all may not be lost if the U.S. fruit and vegetable industry can take advantage of modern production technology. “Mechanization or automation will be a game changer and is the future for this labor-intensive industry.”