SCOTT SIMON, HOST:
You say tomato; I say tariff. Three decades ago, the U.S. and Mexico agreed to trade restrictions designed to stem the flow of Mexican tomatoes into the U.S. And yet imports rose from just over a billion to more than 4 billion pounds. Mexico now supplies about 70% of the tomatoes on American shelves. The U.S. Commerce Department most recently renegotiated the agreement in 2019, during President Trump's first term, and now it says no deal. Mexican tomatoes will face duties of more than 20%, beginning in July. The Commerce press release says this action will allow U.S. tomato growers to compete fairly in the marketplace.
Robert Guenther is executive vice president of the Florida Tomato Exchange, a trade group that represents about half the fresh market tomatoes grown in the United States. He joins us from Tampa. Thank you for being with us.
ROBERT GUENTHER: Scott, thank you for having me on.
SIMON: How did Mexico wind up taking over the tomato market in the U.S.?
GUENTHER: Since the agreement really began in 1996, Mexican tomato imports have surged, as you mentioned, nearly 400%. The agreement was really supposed to stop unfair trade practices. Instead, it really enabled them through different violations such as price manipulation and constant circumvention. That's why they are in the process of terminating the agreement, which will go in effect July 14.
SIMON: With respect, are there enough farmers who want to grow tomatoes in the United States to be able to meet demand?
GUENTHER: Yeah, absolutely. I think, you know, American growers, especially those in Florida, California and other Southern states, you know, really have the capacity and technology to grow tomatoes year-round. The issue really isn't about lack of supply. It's about lack of fair market access. I'll give you an example. Currently, the U.S. has about 2.1 million acres of fresh vegetables in production as we speak. Of that amount, about 400,000 would be suitable for growing fresh tomatoes. So we feel, if access to Mexican tomatoes slides back, we can certainly supply that with U.S.-grown tomatoes.
SIMON: Is there enough labor in the United States to pick an additional 4 billion pounds of tomatoes this season?
GUENTHER: You know, right now labor costs really aren't going to change because of this decision. U.S. growers, as you are probably aware, operate under the strict range in labor rules, including the H-2A guest worker program, which is primarily the program that brings workers into the United States to work on commodities such as tomatoes. What it does allow is the U.S. growers to stay in business, keep people there employed and avoid any more family farms shutting down.
SIMON: What do you anticipate'll happen to prices at the supermarket?
GUENTHER: We've looked at that. There's been a lot of speculation. There has been two instances where the agreement has been terminated. 2019, we have a four-month snapshot where prices did not change. In July, for instance, in 2019, they were lower than they were the year prior, in 2018. When you go back to 2002, when there was about an eight-month termination of the agreement, similar data when you look at retail tomato prices. So we do not expect any significant changes with retail prices for consumers with the termination of the agreement.
SIMON: What do you mean by, we don't anticipate any significant changes? That suggests you do expect some in.
GUENTHER: (Laughter) No, not really. You know, looking at the data that we've seen when there has been a termination, prices have not fluctuated in terms of increases of prices compared to what they were the year before, or even the year after.
SIMON: Yeah. I imagine your eye must be on the fact that many tariffs that have been proposed by this administration have been quickly rescinded or not even put into place, like the tax on avocados from Mexico. Are some of your membership making plans to grow more tomatoes, and then there suddenly might be another change?
GUENTHER: Oh, I think definitely, I would say that they are prepared if the market demands that. I think what they're more interested in is really ensuring that there's a fair market out there so the U.S. can compete more competitively with the Mexican tomato industry.
SIMON: Robert Guenther is executive vice president of the Florida Tomato Exchange. Thanks so much for being with us.
GUENTHER: Thank you, Scott, for having me.
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