Florida fruit and vegetable growers are acutely aware of the negative impacts that Mexico’s exports have had on their ability to remain competitive. In a recent virtual presentation on the subject, Florida Fruit and Vegetable Association President Mike Joyner shared some shocking statistics from a Florida Department of Agriculture and Consumer Services (FDACS) report. Published in July, the report looked at 24 specialty crop commodities in Florida and found that 83% suffered market share loss due to competition from Mexico.
Perhaps most alarming were the blueberry numbers. From 2000 to 2017, Mexican imports in the United States have increased from 150,000 pounds to 48 million pounds. The latest projections show 60 million pounds of blueberries coming to the United States from Mexico in 2020.
The report shows that from 2000 to 2019, the value of Mexican produce shipments to the United States surged by 551 percent. “Between 2017 and 2019, the value of produce from Mexico jumped from $12.92 billion to $15.04 billion,” said Joyner.
Joyner said Mexican government subsidies are a big reason for the country’s growth in produce market share. He added that Mexico is targeting eastern United States markets with lower prices than western markets, despite higher transportation costs to the eastern markets.
Joyner explained that for a country to bring a trade case before the International Trade Commission, it first must prove it makes up 25 percent of the total market share for a product during a 365-day period. With many of Florida’s specialty crops being highly seasonal with short market windows, U.S. growers are not able to meet this requirement.
Federal legislators and Florida agricultural associations are working closely together to draft legislation that would change the 365-day requirement to a shorter time period while considering regions instead of the whole country. Joyner said all 27 congressional members from Florida support changing the existing legislation. “Both senators have been extremely strong on this issue,” he said.
In addition, Joyner said U.S. Trade Representative Robert Lighthizer made a commitment to help growers within 60 days of the United States-Mexico-Canada Agreement (USMCA) going into effect. The USMCA, a successor to the North American Free Trade Agreement, became effective July 1.
Hear Joyner’s full presentation, which was part of the Citrus Expo/Vegetable & Specialty Crop Expo general session held virtually on Aug. 19–20.
Florida and Georgia seasonal produce farmers who testified in hearings regarding unfair trade practices the past two weeks should not have to wait long to see how the U.S. Trade Representative’s Office will respond to their concerns with Mexico.
Charles Hall, executive director of the Georgia Fruit and Vegetable Growers Association and who testified in the virtual hearing on Aug. 20, said Ambassador (Robert) Lighthizer has provided Sept. 1 as the date he would have a plan available to begin implementing.
“They are to announce a plan Sept. 1. I don’t know that we’ll have it on Sept. 1 or not but I think certainly within the next 2 to 4 weeks; we should have a plan based on what their recommendations are as far as how they plan to address the issues that were discussed during the hearings. We’ll wait to see what that plan is,” Hall said.
Action Needed
Florida farmers and Georgia farmers agree that action needs to be taken. The major concerns for seasonal producers are with the government-funded subsidies and cheaper labor that allow Mexican farmers to flood the U.S. market and drive down prices. U.S. growers can’t compete when Mexican farmers only have to pay less than a dollar per hour as a minimum wage.
Producers who testified also agreed that a Section 301 Investigation needs to happen. This provides the United States with the authority to enforce trade agreements, resolve trade disputes and open foreign markets to U.S. goods and services.
“That’s what we recommended although they may have other tools available through them through the USTR or Commerce or some other area. They may see some other areas which they could work in different than a 301 but would help us with a solution to the problem,” Hall said.
“I think based on the hearings, they clearly understand what the problem is and what we feel like is causing the problem. Hopefully, they will have some tools available where they can look into and give us some relief.”
Georgia and Florida vegetable and specialty crop farmers are calling for a Section 301 investigation into unfair trade practices regarding Mexican imports.
But Auburn University Assistant Professor and Extension economist Adam Rabinowitz is concerned about the potential ramifications that could loom as a result.
Section 301
According to the International Trade Administration, Section 301 of the Trade Act of 1974 provides the United States with the authority to enforce trade agreements, resolve trade disputes, and open foreign markets to U.S. goods and services.
Rabinowitz said an investigation could lead to the U.S. imposing trade sanctions such as tariffs which would increase prices of inexpensive Mexican imports, in particular the fruit and vegetable crops. These are difficult for Southeast producers to compete against and were reasons that virtual hearings were necessary for the past two weeks with the U.S. Trade Representative’s Office.
Adam Rabinowitz
“We’ve seen the U.S. use this method against other countries for other industries. Representative (Robert) Lighthizer seems to be listening to the concerns. The one potential challenge may come from how Mexico may retaliate against any tariffs in that form,” Rabinowitz said. “There are concerns of other vegetable growers out west, there could be retaliation against some of their products that are flowing down into Mexico.
“I think there will be further investigation in this. I think things will be heard. It’s just a question or not 301 will be used to actually apply some tariffs or if there could be some other type of resolution through a side agreement with the Mexican government that may address some of those concerns.”
Virtual Hearings
Georgia farmers and industry leaders voiced their concerns on Thursday, Aug. 20 and Florida producers testified on Aug. 13. The hearings were established to provide the U.S. Department of Commerce (DOC) and United States Department of Agriculture an opportunity to hear from growers in both states about the urgent need for federal action regarding unfair trade, specifically with Mexican imports.
All who testified were consistent in their concerns about two main issues that are in Mexico’s advantage: government subsidies to Mexican producers and inexpensive labor.
“If those could be addressed outside of tariffs, that could be a potential solution. Otherwise, you start getting into some of the trade disputes that raise some other issues,” Rabinowitz said.
Georgia producers and industry leaders had their turn to testify on Thursday during a virtual hearing with the U.S. Trade Representative’s Office about unfair trade practices with Mexico. The hearings provided the U.S. Department of Commerce and Trump Administration an opportunity to hear from growers in Georgia about the urgent need for federal action regarding unfair trade.
This was the second virtual hearing following the one on Aug. 13 involving Florida farmers.
Georgia Agriculture Commissioner Gary Black believes a fair, healthy trade agreement is what is needed.
Gary Black
What is Needed?
Farmers discussed trade practices about various produce such as blueberries, pecans, blackberries and cucumbers and how the future of the American farmer is at stake. Most farmers called for a 301 investigation into Mexico.
Adam Rabinowitz, Auburn University Assistant Professor and Extension Economist, explained that a 301 Investigation is part of the Trade Act of 1974 and allows the U.S. to engage in trade activity, whether it be trade agreements but also resolving trade disputes. The idea was that the U.S. could access foreign markets but also that domestic markets were not impacted.
An investigation could lead to the U.S. imposing trade sanctions such as tariffs which would increase prices of inexpensive Mexican imports, in particular the fruit and vegetable crops, that are difficult for Southeast producers to compete against and were reasons that hearings were necessary in the first place.
The list of speakers included Congressmen Austin Scott (GA-08) and Buddy Carter (GA-01); Georgia Ag Commissioner Gary Black; Gerald Long, Georgia Farm Bureau Federation; Charles Hall, executive director of the Georgia Fruit and Vegetable Growers Association; as well as various farmers, including Russ Goodman (Cogdell Berry Farm), Sam Watson (Chill C Farms) and Bill Brim (Lewis Taylor Farms, Inc.).
Raises concern over Mexico’s unfair trade practices and its effect on Georgia farmers
ATLANTA, Ga. – Rep. Doug Collins (R-Ga.) testified today on Mexico’s unfair trade practices that are severely and negatively impacting Georgia’s seasonal and perishable produce farmers during a virtual hearing hosted by the Office of the U.S. Trade Representative (USTR), the U.S. Department of Agriculture (USDA), and the U.S. Department of Commerce (DOC). The virtual hearing was held to allow stakeholders – including growers, producers, and farmers – an opportunity to continue conversations with USTR about how best to address unfair foreign trade practices.
Last month, Collins and Rep. Austin Scott (R-Ga.) sent a letter to U.S. Trade Representative Robert Lighthizer urging the Administration to protect Georgia farmers from Mexico’s unfair trade practices as it works to implement the United States-Mexico-Canada Agreement (USMCA).
To watch Collins’ testimony, click here or on the image below.
Remarks as prepared:
Good afternoon and thank you for the opportunity to speak today about the important issues facing the seasonal and perishable produce industry in Georgia and throughout our country. Ambassador Lighthizer, Secretary Perdue, and Secretary Ross, thank you for having me today to share my views and concerns on behalf of Georgia’s agricultural industry.
Before I begin my testimony, I want to commend the efforts of this Administration in coming together to achieve a momentous trade deal in the United States-Mexico-Canada Agreement (USMCA). There is no denying that that this historic trade deal will increase our global competitiveness, strengthen our economy, and support our farmers. I am grateful for these efforts and the outcome – I know that Georgians will appreciate the effects of this agreement on our economy and I appreciate the President and his Administration’s hard work to get America a better deal.
Over the last several months, we have seen our nation’s farmers, growers, and producers struggle through the economic downturn wrought by the coronavirus pandemic. At the Federal level, it has been a priority of mine to safeguard the livelihoods of Georgia’s hardworking farmers who have never stopped working to put food on the tables of families across the country. This includes my work with this Administration to ensure the H-2A workforce many of Georgia’s growers depend on was not unnecessarily reduced. Unfortunately, the pandemic is unforgiving, but I will continue working with my colleagues in the Georgia delegation to make sure our farmers, growers, and producers are taken care of.
Unfortunately, Georgia’s growers and producers of seasonal and perishable goods continue to face a threat outside of the coronavirus, and that threat must be highlighted and addressed at the Federal level. Over the past several years, the agricultural market for seasonal and perishable goods has seen a growing saturation of Mexican products as a result of that country’s unfair trade practices. It is my hope that this hearing is the Administration’s first step in addressing this unfair trade dynamic.
As you may know, Mexico’s increased market share of produce and perishable goods at record-low prices in the United States has severely and negatively impacted the Southeast’s seasonal and perishable produce farmers. To provide an example of one commodity that has been disastrously struck by Mexico’s practices – Mexico’s share of the U.S. blueberry market has gone up by 2,111% over the last ten years. Such an increase obviously shuts out growers of one of Georgia’s top commodities, blueberries, and deprives Georgia and the country of the benefits a thriving, American-majority blueberry market could have on my state’s economy and the national economy as a whole.
Why has Mexico obtained such a massive stake in our produce market? Because the government of Mexico began to subsidize the development of Mexico’s produce industry. These subsidies have operated to distort trade and, coupled with Mexico’s unfair pricing practices, have resulted in Mexico obtaining an undeniable advantage in the U.S. market. This has continued to happen over the last decade at the expense of our growers.
While the USMCA will make great advancements in trade for many industries across the country, recent studies indicate that – even with the full implementation of USMCA – Georgia stands to lose nearly $1 billion in annual economic output in the grower industry. The same study shows that industry could lose over 8,000 jobs. It goes without saying what this could mean for many of the families that I represent who depend on the paychecks they receive from growing and producing. The outlook is grim and these consequences would be devastating.
For many growers, the consequences of continuing to allow Mexico to get away with its trade-distorting practices will be Earth-shattering. In Georgia, we are lucky to have a growing economy made of many smaller growers that produce a diverse portfolio of commodities. For these small growers, it is up to us – Federal officials in the legislative and Executive branches – to work together to make sure their voices are heard, and their needs met.
I am committed to finding a solution to this issue and I hope that the USTR, USDA, and Department of Commerce will work with my office to ensure Georgia’s farmers, growers, and producers are no longer negatively impacted by Mexico’s unfair trade practices and that we can regain control of the U.S. seasonal and perishable goods market.
I’d like to echo the testimony of Georgia’s stakeholders in requesting that a Section 301 investigation be undertaken so that the Executive Branch can wield its full power in addressing Mexico’s trade practices – including its use of subsidy programs. I stand ready to support such an investigation in any way that I can.
With the country in the early months of USMCA’s implementation, I am glad to see that USTR is continuing its conversations with Georgia farmers and I am hopeful that we can come together and find a solution before Georgia’s growers face more needless economic damage.
Thank you again for having me today and I look forward to working with each of you on this important issue.
Georgia farmers and industry leaders testified on Thursday in virtual hearings with the U.S. Trade Representative’s Office regarding unfair trade practices with Mexico. Each producer shared similar thoughts that some action must be taken, such as a 301 Investigation, because the future of the American farmer is at stake.
The hearings provided the U.S. Department of Commerce and Trump Administration an opportunity to hear from growers in Georgia about the urgent need for federal action regarding unfair trade.
Steve McMillan, with Southern Grace Farms in Berrien County, Georgia, talked about the impact Mexican imports have had on the blackberry industry.
Steve McMillan
Richard Minor with Minor Brothers Farm in Americus, Georgia, talked about the impact Mexico has had on the cucumber industry.
Richard Minor
Bill Brim, co-owner of Lewis Taylor Farms in Tifton, Georgia, talked about how government subsidies have aided Mexican farmers.
Bill Brim
Adam Rabinowitz, Auburn University as Assistant Professor and Extension Economist, explained that a 301 Investigation is part of the Trade Act of 1974 and allows the U.S. to engage in trade activity, whether it be trade agreements but also resolving trade disputes.
Russ Goodman Talks About Impact of Unfair Trade Ahead of Thursday’s Virtual Hearing
United States of America and Mexico waving flag
A prominent blueberry producer in Southeast Georgia believes the future of the American family farm could hinge on any action taken as a result of the virtual hearing scheduled for Thursday.
Russ Goodman is one of several farmers and industry leaders in Georgia who will testify in a virtual hearing on Thursday with the U.S. Trade Representative’s Office. The hearings will provide the U.S. Department of Commerce and Trump Administration an opportunity to hear from growers in Georgia about the urgent need for federal action regarding unfair trade.
“We started growing blueberries in 2000. In 2010, we hear rumblings about (Mexico) and people saying, ‘Mexico’s going to put you guys out of business.’ I heard that kind of stuff. I normally don’t pay a lot of attention to things like that because you hear a lot of generic statements,” said Goodman, a farmer in Cogdell, Georgia. “In 2010, they sent 1.8 million pounds. Last year they shipped in 63 million pounds. I’m fearful that if something isn’t addressed what it means.
“It’s not only with Mexico, which is what these hearings are about, USMCA and Mexico and specifically how that affects us, but my friends in the north in Michigan have been farming blueberries for three and four generations. They’re being affected the same thing with Peru right now.”
Labor Disadvantage
The biggest concern with farmers in Georgia and Florida – where hearings were held last week – in competing with Mexican imports is the cost of labor. What American farmers have to pay per hour, Mexican farmers can charge per day. How can American growers compete?
“A third of your costs is going to be labor. They’re down there paying one-tenth of what we’re paying in labor. You take any business on God’s green earth where your competition has a 90% advantage over something that’s a third of your overhead, they’ll eventually put all their competition out of business. The scary thing is, that competition comes in the form of the American family farm,” Goodman said.
He estimates Mexican farmers only have to pay 81 cents per hour as a minimum wage.
“You don’t have to have a Ph.D. in economics to see what’s happening and what it’s going to mean long term. We’ve got a blueprint of what’s happened in the past, the tomato industry in Florida. That’s just going to keep going into other things,” Goodman said. “They’re planting 20,000 acres of pecans a year in Mexico from my understanding. I just think we’ve got to, especially in light of this pandemic, we’ve got to re-evaluate where we’re at as far as food security. What keeps us food secure is the American family farm,” Goodman said.
According to many farmers, fair trade is more of a fantasy than reality.
Charles Hall, executive director of the Georgia Fruit and Vegetable Growers Association, understands changes to the unfair trade practices that are being experienced by seasonal growers in Georgia and Florida with regards to Mexican imports are not going to happen overnight.
But he is hopeful the virtual hearings on Thursday, Aug. 13 and the one next week on Thursday, Aug. 20, will make a difference.
Hearing Next Week
Hall is one of numerous farmers and industry leaders in Georgia who will testify in a virtual hearing on Thursday with the U.S. Trade Representative’s Office. The hearings provide the U.S. Department of Commerce and Trump Administration an opportunity to hear from growers in both states about the urgent need for federal action regarding unfair trade.
“I think it is big that we have this opportunity to talk with some of the decision makers in Washington. I know that our Congressmen and Congressional delegations have been fighting for us. I think it could very well be of some remedy, but I say that cautiously because there’s an awful lot that has to happen for this to be any remedy for us,” Hall said. “I don’t think after these hearings, they’re going to say we believe you and we’re going to do what we need to. I think the hearings are one step in the process. Hopefully, we can continue to keep the administration on our side and continue to work towards some remedy to this.”
Trade Distorting Policies
Hall hopes the discussion over the two days of hearing will center on trade distorting policies and how to address the competitive disadvantage American farmers are facing.
“All of the testimony that was presented on Thursday (13th) or next week on the 20th is to show the U.S. Trade Representative’s Office what we consider to be trade distorting policies. Over the last 15 years, since NAFTA was created, particularly over the last five years you can look at the increase of Mexican imports into the U.S. and how much the Mexico imports have taken over the U.S. domestic market for produce. You can really see what those imports are doing,” Hall said.
Blueberries are one commodity at stake with competition with Mexico.
Gene McAvoy, associate director for stakeholder relations at the University of Florida/IFAS, is speaking up about unfair trade practices.
He’s one of numerous farmers and industry leaders in Florida who will testify in a virtual hearing today with the U.S. Trade Representative’s Office. The hearings, scheduled for today and next Thursday, Aug. 20, will provide the U.S. Department of Commerce and Trump Administration an opportunity to hear from seasonal produce growers in Georgia and Florida about the urgent need for federal action regarding unfair trade.
Today’s hearing is scheduled for 9 a.m. To view the live recording of the hearing, visit USTR’s website here. The livestream will be made available on August 13.
Fair Trade More Fantasy Than Reality
McAvoy has substantial statistical data to support his belief that the idea of fair trade is more fantasy than reality.
“When I first came to Immokalee (Fla.) 25 years ago, we had 300 mostly medium-sized vegetable growers. I don’t think we have 80 (now). Some of them have gotten bigger, but the majority have had to get out because they just couldn’t compete,” McAvoy said.
McAvoy echoes what other farmers have been complaining about as they try to compete against Mexican imports.
“They’re paying their labor less per day than we’re paying per hour. We see produce coming in a $5 a box on tomatoes, and it’s impossible to fathom how that can be done when you think about the cost of production,” McAvoy said. “A tractor in Mexico’s going to cost just as much and more than it does here. Chemicals cost just as much and more than here. The cardboard box itself costs $1.50. When they’re putting stuff on the market at $4 or $5, I don’t care if labor is cheaper, there’s something else going on there.”
Multiple Commodities Impacted
Multiple commodity groups are vulnerable to unfair trade practices with Mexico.
“It started with tomato and then it progressed over the years. Tomatoes in 2000, we were about equal in Mexico, above Mexico in terms of total production of tomato on an annual basis. Now, they’re sending in three times what Florida produces into the United States on an annual basis. It moved to peppers. It moved to blueberries, strawberries; I’m hearing from growers now that have switched to organic production to carve out a niche and they’re starting to encroach on that market now,” McAvoy said.
Click here to view the hearing schedule and list of participants on August 13. Additional information regarding the August 20 hearing will be released closer to the date. The Federal Register notice regarding the hearings can be viewed here.
NOTE: Full transcripts of the hearings will be posted online after the hearings.
Tifton, Georgia farmer Bill Brim is ready to voice his concerns about unfair trade practices during one of the two virtual hearings scheduled for Aug. 13 and Aug. 20 with the U.S. Trade Representative’s Office.
The hearings will provide the U.S. Department of Commerce and Trump Administration an opportunity to hear from seasonal produce growers in Georgia and Florida on the urgent need for federal action regarding unfair trade.
“I feel like if we don’t do it, we’re not going to get anywhere, so we might as well do what we can do even if we make them mad,” said Brim, co-owner of Lewis Taylor Farms. “They’re either going to do what they feel like they’re going to do or they’re going to do what’s right. What’s right is to help support us and our farming operations to allow us to be able to compete with the rest of the world.”
Competition Against Mexico
Competition against Mexican imports is tough, though, if not impossible, for specialty crop growers in the Southeast.
“We can’t grow this product cheaper than they can grow it. Their wages are so much cheaper than ours. They’re making $8 or $9 a day, maybe, if they’re lucky. We’re paying $11.77 an hour for ours, plus all of our input costs are a lot more than theirs too,” Brim said. “They don’t have food safety to deal with like we do. They don’t have all the other items to have to deal with like we do, from FDA and EPA and everybody else.”
He estimated that costs increase to $15 per hour per worker since Lewis Taylor Farms houses the workers as well. The high costs that specialty crop farmers already deal with was amplified this year because of the health and safety protocols needed for workers during the coronavirus pandemic.
“This COVID-19 has cost us a fortune to keep them where they can work; spraying houses every day. We’re spraying buses every day, we’re spraying the kitchen every day, we’re spraying tractors every day, the trucks every day,” Brim said.
Additional information on USTR field hearing dates, deadlines, and submission instructions can be found in the Federal Register notice.
