AgNet DEMO

Category: Exports/Imports

  • Increased Imports: U.S. Too Reliant on Foreign Produce?

    It’s a disheartening scenario but one that farmers face every day due to rising imports from Mexico.

    Sam Watson

    “Every morning I start my day by spending hours on the phone with produce buyers across the country, trying to sell my product. I get the same answer, ‘No, we don’t need any,’ they would say,” said Georgia farmer Sam Watson. “At least they’re honest, they tell me they can get it cheaper in Mexico. Maybe try us next week.”

    For some growers, they’re running out of weeks.

    Few Choices

    Watson, along with other producers in Georgia and Florida, testified in a U.S. International Trade Commission hearing on Thursday about the impact that imports of cucumbers and squash are having on the domestic industry. One of Watson’s main points of emphasis is that the American consumers are not being offered any choices anymore. Grocery stores are becoming more and more reliant on supplying foreign produce.

    “What’s interesting is the American consumer is still paying the same price at the grocery store. I firmly believe that if American consumers were given a choice between U.S. grown and imported produce, they would choose to buy American. Problem is they have no choice anymore,” Watson said. “We cannot become a country that’s dependent on others for our food supply. Watch all the farmers go under and that is exactly what will happen.”

    Cheap labor, low input costs, subsidization by the Mexican government and less regulatory environment contribute to a rise in imports.

    “When you combine all of these advantages, I find it hard to believe that anyone can say that the American farmers participate in fair trade,” Watson said. “We’re not saying we want to stop the importation of fresh fruits and vegetables into this country. We just want protections and safeguards put into place to provide for fair trade.”

  • Fresh Produce Association of Americas: Mexico Cannot Be Blamed

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    Not everyone believes there is a problem with Mexican imports and their impact on the domestic industry. In fact, Lance Jungmeyer, president of the Fresh Produce Association of Americas, believes “Mexico cannot be blamed” for many of the issues Southeast farmers are trying to overcome.

    “In reality, many of the problems facing the Southeast growers – labor, hurricanes, real estate development, consumer demand – have nothing to do with Mexican imports but everything to do with the growers’ inability or unwillingness to supply that market as demanded,” Jungmeyer said.

    Labor

    Labor rates play a significant role in comparing the Florida vs. Mexico. It was established during Thursday’s ITC hearing regarding the impact imports have on the Southeast domestic market, that Mexico’s minimum wage is $10 per day. Florida just voted to increase its minimum wage that will increase to $15 per hour over the next few years.

    Jungmeyer was also critical of Florida and Georgia’s usage of the H-2A program and believes their lack of available workers has led to quality issues.

    “Mexico cannot be blamed for U.S. farmers not having labor, agricultural workers, to work in their fields. Perishable products such as cucumbers and squash are labor intensive crops, particularly for the harvesting and packing. Without adequate labor, Southeast growers are at a severe disadvantage in how they grow and pack. Their products result in a distinct quality disadvantage that U.S. retail customers clearly recognize,” Jungmeyer said.

    Industry leaders in Florida and Georgia insist, though, there is not a labor shortage.

    Weather Issues

    Jungmeyer’s defense of Mexican imports also centered on hurricanes that are an annual threat to Florida production.

    “Mexico cannot be blamed for the hurricanes and tropical storms that cause damage to crops. The threat of bad weather is reason alone why many retail customers seek Mexican suppliers to at least backstop the risk of Florida suppliers running into weather-related supply problems. This happens in Georgia as well. The risk of hurricanes is also a significant disincentive for southeast growers to pursue using protected agriculture to grow cucumbers and squash,” Jungmeyer said.

    He also mentioned real estate development for a reason that many Florida producers have sold land instead of continuing the family business.

    Consumer preference was his final point of defense. Jungmeyer claims consumers just prefer Mexican produce compared to American producers.

    “Consumer choices have evolved to favor premium produce items like fancy squashes and cucumbers. This is in a way similar to how consumers choose bell peppers that are grown in protected agriculture because of the variety and color of peppers available and even the perfect appearance of those green protected agriculture peppers. We also have a perfect appearance in Mexican squash and cucumbers,” Jungmeyer said. “The extreme high quality in imported Mexican produce (distributors) sell gives them a significant demand edge in the market.”

  • Representative Response: Austin Scott, Darren Soto Pen Letter to ITC

    Austin Scott

    WASHINGTON, D.C. – Reps. Austin Scott (R-GA-08) and Darren Soto (D-FL-09) co-led a bipartisan letter to the International Trade Commission (ITC) on Tuesday expressing support for a Section 332 investigation for cucumbers and squash as American specialty crop producers struggle with unfair trade practices that negatively impact operations.

    “Seasonal cucumber and squash imports from Mexico continue to dramatically impact U.S. markets and threaten the future of domestic farm production of perishable produce,” wrote the Members. “This Section 332 investigation by the ITC for cucumbers and squash is needed to make a meaningful determination as to the impact of these seasonal imports on our markets. Market changes occur quickly and can devastate a grower’s season in a matter of days if imports increase and the resulting price decreases coincide with harvest. We appreciate your efforts on behalf of our growers and rural communities.”

    The letter is supported by Georgia Farm Bureau, Florida Farm Bureau, Michigan Farm Bureau, the Georgia Fruit and Vegetable Association, and the Florida Fruit and Vegetable Association.

    Darren Soto

    “Georgia Farm Bureau agrees with U.S. Representatives Austin Scott and Darren Soto that a Section 332 investigation for cucumbers and squash is necessary to determine the full impact that imported produce is having on domestic growers. In recent years, Georgia farmers — along with farmers in many other U.S. states — have struggled to compete with the growing surge of imported fresh fruits and vegetables, and as noted by the reports highlighted in the letter, the problem will only get worse unless U.S. officials step in. We are grateful for the leadership of Representatives Scott and Soto along with the other Members of Congress who joined this important effort,” said Tom McCall, President of Georgia Farm Bureau.

    “The several specialty crop states represented on this letter should signal a growing national concern for our agriculture sector,” said John L. Hoblick, President of Florida Farm Bureau. “Florida agriculture, and our rural communities as a result, is at a crossroads. This investigation on squash and cucumbers is a helpful start toward a fair solution for our domestic producers, and we applaud our federal policymakers for standing with us.”

    The letter was sent two days ahead of Thursday’s ITC fact-finding hearing that will focus on cucumber and squash imports and their impact on the Southeast sector.

    In November, Rep. Scott sent a similar letter to the United States Trade Representative (USTR) requesting ITC begin a Section 332 investigation into squash and cucumber imports. Click here to read more.

    You can read the text of the letter below or by clicking here.

  • Voice of Leadership: Congressman Scott Sounds Off on Mexican Imports

    Austin Scott

    How can you stay in business by selling a commodity for less than the inputs required to produce it? While it may sound like simple economics, it’s a financial game that’s just not adding up for many Southeast vegetable and specialty crop producers?

    What’s the ‘X’ factor? Imports from foreign countries like Mexico, Peru and Chile. If they continue to keep bringing in produce like strawberries, blueberries, tomatoes and squash at their current rate, Southeast farmers will continue to suffer.

    “The primary issue is if you can’t sell your crop for more than you’ve got in it, then obviously you’re backing up,” said Congressman Austin Scott (R-GA-08). “It doesn’t cost as much to farm in Mexico as it does in the United States. Our producers are losing significant portions of the market share. It is predominantly coming from the imports from Mexico. As Mexico has set aside more protected acres for agriculture, it makes it easier for their farmers to do business.

    “We as a country have been flooded by imports who have a lower cost of production than U.S. producers. It’s been moving in the wrong direction for a while. I think now it’s just moving further faster with COVID because your fresh fruits and vegetables; the restaurants that were serving them are at half capacity if they’re open at all.”

    Mexico Government Provides Support

    According to University of Florida Associate Professor Zhengfei Guan, approximately 95% of Mexico’s protected acreage (those in macro-tunnels, shade houses and greenhouses) is for fruits and vegetables. The Mexican government also subsidizes its fruit and vegetable industry. From 2006 to 2016, the average annual budget for subsidies was $4.5 billion.

    “Agriculture has significantly more support in Mexico than we have in the United States right now, unfortunately. When I say more support, I mean at the national level,” Scott said.

    It has created a concern that other farmers have voiced: Where will our children and grandchildren get their food one day? As more and more producers are forced to quit because of an inability to stay in business, who will produce food in America?

    “I don’t want to be dependent on any section of the world for our food and our nutrition. We do very little in this country to help our Ag producers. We’re competing with other countries that do a lot and have a lower cost of production. Every time the federal government passes a rule and regulation that increases the cost of production within the United States, it’s done at the expense of U.S. food security,” Scott said.

  • Smart Investment: Prosperous Season Leads Farmer to Save, not Expand

    What is it like to be an American farmer in 2021? In an era when success should spark expansion and growth, producers are content with saving money for the next rainy day that is bound to come along.

    That’s the impact imports are having on producers like Matt Parke. The Parkesdale Farms strawberry farmer in Plant City, Florida enjoyed a bumper crop this year. Prices remained steady, and he enjoyed a prosperous season.

    So how does he celebrate? By putting the profits into savings in preparation for those years that are not as prosperous.

    “Over here in Parksdale, we know what the bad looks like. This is awkward for us to have a good year. It’s not like, okay we’ve got some money now, lets go grow,” Parke said. “I plan next year not to have a good year, so I’m not going to go spend any money. I’m going to put it in the bank and wait for that bad one, so I don’t owe the bank any money.

    “But Mexico’s on the other end of that deal. Mexico’s going, ‘Oh we had a good year, lets put in another 5,000 acres.’”

    University of Florida Associate Professor Zhengfei Guan said the Mexican government subsidizes its fruit and vegetable industry. From 2006 to 2016, the average annual budget for subsidies was $4.5 billion. Approximately 95% of Mexico’s protected acreage (those in macro-tunnels, shade houses and greenhouses) is for fruits and vegetables.

    Mexico can expand its acreage, which it has done exponentially over the previous decade. Guan said strawberry imports from Mexico were one-third of the total production in Florida in 2000, while in 2019, Mexican imports were two times higher than the Florida production.

    American farmers don’t have that luxury of expanding, which is why they are advocating to consumers to buy local.

    “I would love to grow. I have dreams of growing, but I don’t want to grow because I know what happens. You get too big, and we have some bad years, and then the bank calls the chickens home. You know what happens after that,” Parke said.

  • FFVA President: (Food Security’s) a National Security Issue

    Feb. 11, 2021 could be a date that lives in infamy for Florida’s vegetable and specialty crop growers. At least that’s the way Mike Joyner views the U.S. International Trade Commission’s (USITC) unanimous verdict regarding blueberry imports.

    “As a result of that 5-0 ruling, I would completely agree with you, it was a gut punch for our growers,” said Joyner, president of the Florida Fruit and Vegetable Association (FFVA). The five USITC members voted on the Section 201 investigation into serious injury regarding blueberry imports. It deemed that imports of fresh, chilled or frozen blueberries are not a serious injury to the domestic industry.

    Joyner

    Joyner worries what the ramifications like that ruling can have on other commodities that Mexico exports.

    “One of the biggest concerns we had before the blueberry 201 vote was that if we lose, it’s a green light to unfair imports. We’re seeing that,” Joyner said.

    Imports from countries are overflowing markets with various commodities, including strawberries, blueberries, squash and cucumbers.

    “I worry that as a country, a decision is going to be made, whether it’s intentional or unintentional, that we’re okay to rely on foreign produce during certain times of the year. I personally think that’s a bad public policy. But if it keeps going like it’s going, that’s what’s going to happen,” Joyner said. “These winter months where Florida feeds the U.S., if it keeps going like it’s going, we’re going to be relying on foreign imports to feed the U.S. I just don’t think that’s good public policy.”

    New U.S. Trade Representative

    The fight continues for Florida farmers who are hoping Katherine Tai, the new U.S. Trade Representative, will become a much-needed ally.

    “We’re going to continue to work with Ambassador Tai. I can tell you that the Florida delegation which has just been so solid on this issue. Senators (Marco) Rubio and (Rick) Scott both interviewed her individually as she was being confirmed. She understands this issue, she knows it,” Joyner said. “She made no commitments but we’re hoping Ambassador Katherine Tai will take this issue on and make it a priority.”

    Joyner and Florida farmers will have another chance to voice their concerns during a virtual hearing with the USITC on Thursday, April 8. It will focus on imports of cucumbers and squash on seasonal markets.

    “Our growers like Paul Allen have said so many times, it’s a national security issue. They’ll argue every day it’s a national security issue,” Joyner said. “It is a national security issue; food security, national security.”

  • Overwhelming: Challenges Mounting for Producers to Stay Afloat

    Challenges continue to mount for Southeast produce farmers. There is a fear among producers in Florida and Georgia that one day obstacles like Mexican imports and rising costs will be too much for growers to overcome. It will lead to producers going out of business and this country becoming reliant on foreign countries for food.

    “An older guy told me this, whether you’re the biggest produce outfit on the block or the smallest, because of the way this industry goes, the big guys aren’t but about two seasons behind the little guys as far as going out,” said Georgia vegetable farmer Jason Tyrone. “The amount of money you could lose at one time, one season or one year is very serious.”

    While last year was profitable for Tyrone and Tycor Farms in Lake Park, Georgia – even then he is still not sure how that happened amid the coronavirus pandemic – domestic producers are always going to be vulnerable to going out of business when compared to rising imports from Mexico.

    “If something doesn’t change, it could happen sooner rather than later,” Tyrone said. “I know it can happen and I try to prepare for it, financially and mentally, of what would I do?”

    Lack of Support

    What is really frustrating for farmers like Tyrone is the lack of support being shown their way. Back in February, the U.S. International Trade Commission voted 5-0 against farmers claiming that imports were having serious injury to the domestic market.

    And, according to Tyrone, local grocery store chains are not backing their local producers, either.

    “I’ve seen in my own grocery store in Lake Park in Winn-Dixie, a big old bin full of, I don’t even remember what commodity it was; they have to put the country of origin up there on the bin; it says, grown in the U.S. Then you look at the actual stickers on the fruit, like on the pepper, and it’s from Mexico,” Tyrone said. “They’re just dumping boxes of Mexican pepper in there in the bin that says, grown in the U.S. The grocery stores are definitely not doing their part.”

    The lack of support is reflective in the financial margins of today’s vegetable and specialty crop producer.

    “My in-laws started the operation we’re in now in the late 80s. They’ve got books with numbers all the way back. Most of our input costs, labor, seed are up anywhere from 200% to 500% over that timeframe. If you look across the board at the average box price, it’s the same,” Tyrone said. “They had great margins back then. That’s how they built what they built. There was only two packing houses in Lake Park, now there’s six. And they weren’t battling Mexico.”

  • Vegetable Farmer: We’re Going to Start Dropping Like Flies Eventually

    What would it look and feel like for the United States to be totally dependent on foreign countries for food? While it’s a scenario that might seem unfathomable for some, it’s a proposition that keeps inching closer to reality.

    “If things don’t change and they keep going the course they’re going, people are going to look up one day and say, ‘Why can’t I find anything from the U.S.?’ Because of the costs that we’re paying and what we’re battling, we’re going to start dropping like flies eventually,” said Georgia farmer Jason Tyrone.

    More and more farmers are calling it quits because it is unsustainable to compete against imports from other countries. Cheap labor costs and the subsidization of Mexican farmers allow produce like blueberries, strawberries, squash, tomatoes and cucumbers to be imported into the U.S. at staggeringly low prices. Markets react, and the American farmers suffer.

    How can they compete? They can’t.

    “You just think we got into trouble when were waiting on medications and stuff from China for a pandemic. You just wait and see what happens when we have to ask Mexico for food to eat,” Georgia farmer Ricky Powe said. “To break even on a box of pepper is probably $10 or $11. That’s just to break even, no profit, just to get your money back. When they’re allowing this pepper in at $6, we’re losing $5 or $6 a box on pepper, there’s nobody that’s going to stay in business.

    Future Generations

    Vegetable farmers like Powe and Tyrone cringe at the thought of future generations being totally dependent on other countries for food.

    “The American consumer says we want to buy our food as cheap as we can get it. If Mexico sends it over here at $4, we can buy it cheaper. I say, you’re exactly right. But you don’t know what you’re buying. If you put everybody out of business in the United States, then you’re going to be totally dependent upon a foreign country for your food,” Powe said.

    The problem is not slowing down, either. Imports are increasing at a rate that producers from Georgia and Florida can’t keep pace.

    “The scary part of this, say we do get to where the U.S. farmer can’t afford to do produce because of the labor costs differences, input costs differences, that’s kind of scary from a national security standpoint. Do you want to depend on stuff from other countries to totally feed our country? It’s scary if you think about it,” Tyrone said.

  • Letter Highlights ‘Deteriorating Trade Relationship’ with Mexico

    The vegetable and specialty crop sector was highlighted this week in a letter sent by several organizations, including American Farm Bureau Federation, to Agriculture Secretary Tom Vilsack and U.S. Trade Representative Katherine Tai.

    The organizations spoke of a “trade relationship with Mexico that has declined markedly, a trend USMCA’s implementation has not reversed.”

    Among the concerns brought forth include organic export certification requirement. The letter states that the Organic Trade Association was informed by a U.S. accredited organic certifying agency that Mexico’s Health, Food Safety and Quality Agency (SENASICA) would require all U.S. organic exports to Mexico be certified to Mexico’s organic standards.

    The U.S. was granted an extension until June 26. But if the policy enforced, there is concern that trade disruptions will occur. It can take more than a year for organic companies to become certified to these new standards. This will increase export costs to Mexico and bring losses for organic exporters.

    The potato import ban is another issue. Despite an agreement almost two decades ago that the U.S. would expand market access to Mexican avocados and Mexico would open its market to U.S. fresh potatoes, the potato market remains almost closed. This despite the U.S. importing $2 billion worth of avocados.

    Then of course there’s the situation regarding Mexico imports and their impact on the domestic market, pertaining to strawberries, bell peppers, squash and cucumbers and blueberries.

    “Renewal of a healthy bilateral trade relationship requires prudent actions by both parties. Until the U.S. International Trade Commission (USITC) voted on Feb. 11 to find there is not serious injury to U.S. blueberry producers from imports, 44% of Mexico’s fresh produce exports to the U.S. were investigation,” the letter read. “Monitoring investigations continue regarding imports of strawberries, bell peppers, squash and cucumbers, respectively, and blueberry producers are seeking protection through political intervention. As you address the struggles of U.S. seasonal produce farmers, we respectfully urge you to explore a variety of other means of enhancing their competitiveness.”

  • Blueberry Decline: Imports, USITC Contribute to Florida’s Dwindling Industry

    What was once a booming industry in Florida is now running on fumes. Mexican imports and the U.S. International Trade Commission (USITC) have made it almost impossible for Florida blueberry producers to compete like they used to.

    “Florida went through an increase from 2000 to 2015 or so. Now, I don’t know of anybody that’s putting blueberry acreage in because they see the writing on the wall,” said David Hill, owner of Southern Hill Farms in Clermont, Florida and vice chairman of the Florida Fruit and Vegetable Association. “What’s happening now is the smaller guys, they can’t hang. The margins aren’t there. They’re selling out. They’re either selling to developers trying to find somebody to buy their farm for cheap. Now you can get a blueberry farm cheaper than you can put one in. But I don’t see a lot of people wanting to get in the blueberry business.”

    Why would any farmer want to try their hand in blueberries? Especially when the USITC decided in early February that blueberry imports were not a serious injury to the domestic market. The USITC voted 5-0. It was a devastating blow to Florida blueberry producers longing for relief.   

    Statistically Speaking

    According to University of Florida Associate Professor Zhengfei Guan, Mexican imports of blueberries were non-existent before 2009. But in 2019 they totaled a little more than 90 million pounds, compared to Florida’s approximate 24 million pounds of production.

    Hill compares the state of the blueberry industry to Florida’s tomato industry which was also decimated in recent years.

    “It’s the same kind of thing. You’ve got to be big, and there’s only so many people that can be big, but the smaller guys, you just can’t afford to keep losing money. Things are looking worse,” Hill said. “Mexico is ramping up. The government is subsidizing the industry. The obvious is look at the labor costs. It makes it very difficult to compete.

    “You’ve got all of this infrastructure you put in and you can’t get the returns. If you sell it as a blueberry farm, you’re selling it at a huge discount. That’s the only way you’re going to entice somebody to buy it as a blueberry farm.”