With Mexican imports of fresh fruits and vegetables growing rapidly in the United States, many U.S. farmers are feeling the pinch. Photo by Pixabay
EVANSVILLE, Ind., Oct. 18 (UPI) -- The amount of U.S.-grown fruits and vegetables on the domestic market is shrinking because of a surge of cheap Mexican produce, farm experts say.
Because of less costly labor and increasing government subsidies, Mexico's fruits and vegetables -- aided by free trade between the two nations -- are flooding the U.S. market and driving down prices.
U.S. consumers now have year-round access to low-cost produce at their grocery stores. Without Mexico's supply, economists say, availability would decrease and prices would rise.
American farmers say they cannot compete.
Across the United States, farms are ceasing production or reducing output. The country lost more than 500,000 acres of fruit, vegetable and nut farms between 2007 and 2017, dropping from to 7.8 million to 7.3 million, according to U.S. Department of Agriculture statistics.
"Anything that requires any degree of hand labor, we will soon see disappear from our country," said John Bakker, executive director of the Michigan Asparagus Advisory Board.
This trend started in the early 1990s, when then-President Bill Clinton signed the North American Free Trade Agreement.
NAFTA received wide support from the U.S. agricultural sector. When NAFTA was proposed and put into effect, commodity crop and livestock producers believed they would benefit from open access to Mexican and Canadian markets -- and that has largely proved true.
Nationwide, agricultural exports to Mexico jumped from under $5 billion in 1993, the year NAFTA was signed, to $19 billion in 2018, making that country America's second-largest export market, according to USDA. Much of that increase occurred in meat, dairy, grains, corn and soybeans.
But also during that time, Mexican agricultural exports to the United States ballooned. And most of Mexico's gains have been in fresh fruits and vegetables.
"Back in 1993, when we were first negotiating NAFTA, the leadership here was opposed to it," said John Walt Boatright, the director of national affairs at the Florida Farm Bureau Federation.
"They opposed it, while the rest of the nation's agricultural groups were for it," Boatwright said. "They knew it would give Mexico the opportunity to bring cheap food in with no recourse for our farmers. And, unfortunately, they were right."
This trend is likely to persist. The new U.S. Mexico Canada trade deal that President Donald Trump negotiated to replace NAFTA maintains the same unrestricted trade in fruits and vegetables, Boatright said.
The USMCA was signed by the three countries last November, but it has yet to be ratified by the U.S. and Canadian legislatures. In the United States, the deal must be approved first by the House of Representatives and then the Senate. House Democrats have yet to vote on it, citing concerns that it does not adequately protect American workers or the environment.
Mexico increases production
While the United States dominates the world in commodity crop production, which can be performed mostly with tractors or other machinery, it lags far behind in fruits and vegetables. This is because fresh produce requires human workers to pick and process.
With the high cost of labor relative to Mexico, U.S. producers were at an immediate disadvantage once free trade began.
Mexico has taken full advantage. After signing NAFTA, the Mexican government invested heavily in its produce farms, giving out billions of U.S. dollars in subsidies. Farmers have used this money to dramatically improve and increase production of numerous crops.
"The extensive, strategic agricultural support programs have changed the landscape of the Mexican fruit and vegetable industry and have increased Mexico's international market shares in major fruit and vegetable crops," according to a report published in 2018 in the Agricultural and Applied Economics Association's scholarly magazine Choices.
With these improvements, Mexico has eclipsed American production of various produce, like tomatoes, bell peppers, blueberries, strawberries and asparagus.
Tomato growers were some of the first to feel the incursion, Boatright said.
The tomato fight
Across the nation, the number of acres of harvested tomatoes fell by nearly 25 percent between 2007 and 2017, according to USDA statistics. A lot of this loss happened in Florida.
In 2000, the U.S. market had 20 percent more Florida-grown tomatoes than Mexican-grown, according to researchers at the University of Florida's Institute of Food and Agricultural Sciences. By 2016, Mexico's tomatoes outnumbered Florida's by five to one.
The rapid market shift devastated the U.S. tomato industry. Between 2010 and 2018, the production value of Florida tomatoes decreased by nearly 60 percent.
"I've seen family farms, third-generation farms, just stopping and going out of business," Jim Alderman, the owner of Alderman Farms in Boynton Beach, Fla., told UPI in 2018. "Some of these guys have even taken the step of sourcing the product from Mexico and repacking it here."
The U.S. tomato industry hasn't gone quietly. Growers have fought hard over the last two decades to level the playing field. In August, they scored what they consider a big win. The United States and Mexico reached an agreement to set price floors for imported tomatoes. The deal also allows the United States to increase tomato inspections.
"Tomato producers across America, including those in Florida, Texas and Arizona, will benefit from this agreement," the U.S. Department of Commerce said in a news release.
While economists warned the deal would increase tomato prices for consumers, farm groups celebrated, showering the U.S. government with statements of support and thanks.
At the same time, they warned that tomatoes are just one of the crops being replaced by Mexican imports. None of those others have similar protections, and there is no sign that protections are coming.
"The tomato industry kind of became a poster child for the issue," Boatright said. "But that's just one commodity and one potential solution. What about all the other specialty crops?"
'Hard to compete'
The domestic bell pepper, cucumber, blueberry and strawberry industries say they are dying as Mexico replaces them in the U.S. market.
Mexican bell pepper imports rose by 56 percent between 2010 and 2018, according to a University of Florida Economic Impact Analysis Report. Strawberry imports increased 79 percent, and blueberry imports jumped by 340 percent.
This is "a clear and present danger to the sustainability of the Florida industry," Kenneth Parker, executive director of the Florida Strawberry Growers Association, said at a U.S. International Trade Commission hearing in 2018.
Even crops like asparagus are feeling the pinch.
"It's really, really hard to compete," the Michigan Asparagus Advisory Board's Bakker said. "We've seen this before in other industries. It tends to push smaller growers out first."
Larger growers may hold out longer. But they are starting to scale back production. Eventually, they, too, will leave the industry, he said.
"We're almost not covering the cost of production now," said Gary Larson, an asparagus grower in Washington state. "I'm very worried. I have a 24-year-old son who is just starting to take over our farm. His future as an asparagus grower is really bleak."
A legislative solution
U.S. lawmakers from Florida are trying to give these other industries tools to limit Mexico's ability to overwhelm the American market.
"This issue is crippling Florida's agriculture industry," U.S. Rep. Al Lawson, D-Fla., said in a statement.
Bills were introduced in the House and the Senate in January that would allow regional producers to more easily sue Mexican importers for "dumping" produce on the American market.
"Dumping" in international trade terms is defined as a country selling a product in another country at prices below what it would sell for a home. Successful lawsuits against those who commit dumping can result in tariffs or other import penalties that would raise the price of the produce.
"Our beleaguered growers continue to be harmed by Mexico's unfair subsidies and illegal seasonal dumping," U.S. Rep. Vern Buchanan, R-Fla., said in a statement. "This legislation will level the playing field for a vital industry to Florida's economy."
The House bill was referred to the subcommittee on trade, while the Senate bill was referred to the committee on finance.
Economists warn that if the legislation is enacted, it could mean less produce in U.S. stores and higher prices.
"If successful, [the legislation] will seriously disrupt the food supply chains fostered by the North American Free Trade Agreement over three decades," the Peterson Institute for International Economics said in a statement. "American consumers will pay the price."