May 15, 2008

Florida’s Tomato Growers Taking it on the Chin

Rising input costs. Shrinking profits. Expensive food-safety measures. Projected budget cuts to research and Extension programs. Labor and immigration controversies – even accusations of slavery.

It’s safe to say Florida’s tomato growers have seen better days.

Raising tomatoes in the Sunshine State has never been easy, of course. Growers are always dealing with something, whether it’s foreign competition, overproduction, hurricanes, droughts, development pressure or the rise of greenhouse tomatoes. But the challenges seem to have multiplied in the last few years, and negative publicity is taking its toll. Longtime growers and packers are pulling out of the industry and – according to Reggie Brown, executive vice president of Florida Tomato Growers Exchange and manager of the Florida Tomato Committee – the value of the state’s tomato crop has dropped by $200 million in the last three years.

That doesn’t bode well for the growers who remain, or for the U.S. tomato market. Florida provides about half the country’s domestically produced fresh tomatoes each year, according to the federal marketing order that regulates Florida tomato shipments.

Industry insiders aren’t quite ready to predict the demise of tomato growing in Florida, but they are worried. Even the Coalition of Immokalee Workers (CIW), perhaps the biggest thorn in the industry’s side right now, doesn’t want the state to lose its tomato heritage.

“Wrecking the industry is not our intent,” said Julia Perkins, a staff person with CIW. “We’re not trying to run buyers off, we’re trying to improve conditions for workers and provide a new way forward for the tomato industry.”

The future of Florida’s tomato industry isn’t wholly dependent on what happens within the state, either. National issues, such as immigration reform and disease outbreaks, could have their own impact – an impact felt not only in Florida but throughout the entire U.S. industry.

“We’re the largest fresh tomato production state in the country,” Brown said. “If tomatoes remain a viable crop in the United States, Florida will continue to play a role. If the economics of production no longer make it viable, the Florida industry will disappear with the rest.”

Higher costs, lower profits

Statistics from the Florida Tomato Committee’s Web site give an idea of the size of the state’s tomato industry: In 2006-07, Florida growers harvested about 39,000 acres of fresh-market tomatoes, hiring about 33,000 workers during peak periods. The total value of the crop exceeded $403 million, while harvest and production costs averaged more than $11,600 per acre.

It’s a big industry, and the key to its future is profitability, but profitability has been in short supply lately. Rising input costs are taking a toll. Growers are investing hundreds of millions of dollars in their crop every year, and if they don’t get a return on that investment, more of them will leave the industry. Then again, if they can take advantage of the buy-local movement and sell more fresh tomatoes within the state, there’s a good chance for survival, Brown said.

According to John Scott, a tomato breeder with the University of Florida, things started getting really tough for the tomato industry in the mid-1990s, when U.S. growers were hit with a “triple whammy” from Mexico. Mexican tomatoes had been a threat before, but they got a boost when the North American Free Trade Agreement went into effect in 1994, making it easier for Mexican growers to export their crop to the United States. The development of extended-shelf-life varieties also aided Mexican exports. And about the same time NAFTA was enacted, the value of the peso went down, making U.S. dollars even more attractive in Mexico.

The triple hit erased about a fifth of Florida’s tomato acreage, Scott said, but the industry adjusted and the number of acres has held steady since that time. A lot of people went out of business, but the remaining growers took up the slack and got bigger.

“The players are fewer and larger now,” he said.

Taylor & Fulton offers an instructive example. The former owners of the well-known grower and packer pulled out of the tomato business early this year and sold their packinghouses to other operations. Ed Angrisani, a longtime sales representative with the company, bought its Palmetto packinghouse with two other growers. They plan to stay in the tomato business and retain the Taylor & Fulton name, he said.

“When I got into this business 20 years ago there were a lot more packinghouses and a lot more growers, but the number gets smaller every year,” Angrisani said. “Some companies now are bigger than they once were.”

Tomato farmers, like others, are suffering from the skyrocketing price of oil and everything tied to it – nitrogen fertilizer, pesticides, insecticides, plastic mulch – not to mention the higher minimum wage. And it’s tough to make a profit in tomatoes anyway, because they’re perishable items that don’t have a lot of price flexibility, Angrisani said.

“We are price takers, not price makers,” he said. “If it costs us $8 to grow a box of tomatoes and demand dictates we have to sell it for $4, we have to do that.”

Gene McAvoy, a vegetable Extension agent in southwest Florida, is positive the industry will survive – if growers can adapt to the changing marketplace. Traditionally, Florida tomatoes have been shipped out of state, but more people are moving into the state, creating new markets.

Florida retains other natural advantages: It’s still the only place in the United States that can grow tomatoes in the winter, and its proximity to eastern U.S. markets gives it an advantage over Mexico. Fuel prices may hurt Florida growers, but they hurt Mexican growers more, he said.

Prices are stabilizing this year after a couple of bad years. That might entice some growers back into the business, McAvoy said.

Labor controversies

The Florida tomato industry has been getting a lot of unwanted attention from the national media in the last couple of years. CIW, a farm worker activist group, is still fighting to force fast-food chains and Florida growers to pay higher wages to tomato pickers. The campaign has run into resistance from the Florida Tomato Growers Exchange, a cooperative that represents more than 90 percent of the state’s growers.

Perhaps even more damaging, CIW and others have accused Florida growers of harassment, abuse and intimidation of tomato pickers. During a U.S. Senate committee hearing April 15, a sheriff’s detective compared conditions in tomato fields to “modern-day slavery.”

Such accusations have been a “horrible thing” for the industry’s reputation, said Angrisani, co-owner of Taylor & Fulton. There might be some abuse here and there in the form of poor housing, but it’s the exception and not the rule, he said.

“I’m not saying we’re perfect, but most of the bad publicity we get is not based in fact.”

The publicity might not be based in fact, but the damage it does is real. Long-time buyers could get scared away by all the negative press, Angrisani said.

The hyperbole from activist groups, many of whom have little real knowledge of the tomato industry, has put a lot of pressure on growers, but a bigger concern regarding labor is immigration. If the federal government continues to crack down on illegal immigrants, growers are going to find themselves short of workers, said McAvoy, the Extension agent.

Food safety

Starting July 1, Florida tomato growers will have to comply with new state regulations regarding the handling and safety of their crop. The new rules, however, are something the industry asked for, not something that was imposed arbitrarily.

Most large growers have been adopting similar practices for years because of mandates from their buyers. Such practices add to the costs of growing tomatoes but don’t add to their value. It’s just one more of the challenges of being a tomato grower, McAvoy said.

“Tomatoes have been implicated in a number of food-borne illness outbreaks in the past 10 years or so,” said Marion Aller, director of the state agriculture department’s food safety division. “The industry was concerned consumers would look at tomatoes as an unsafe product, and wanted to make sure they were doing everything they could to ensure a safe product.”

Growers, state officials and safety experts crafted the rules together. The end result sets forth the practices growers and packinghouses will be required to follow in order to ensure as safe a product as possible, Aller said. The practices, some of which are reiterations of existing regulations, address safety measures for fertilizer application, pest control, sanitation, water quality, equipment, debris removal, microbial contamination and other issues.

One of the rules states a tomato field should not be located where it could receive drainage or drift from an animal contamination area – and if it is, there has to be some sort of mitigation step. If there’s a cattle operation uphill from your tomato field, for example, you’d have to erect a barrier to catch the runoff, Aller said.

Besides making tomatoes safer, universal practices will end the “audit game” – farmers being subjected to multiple audits from multiple companies – which will save growers money, said Brown, the tomato committee manager.

Third-party audits for West Coast Tomato, a grower and packer in Palmetto, cost $6,000 to $7,000 per audit. Buying safety equipment, such as a bin washer ($75,000 with installation) or hand-washing stations for field units ($30,000), is expensive, but buyers require it of commercial growers, said Fritz Stauffacher, West Coast’s compliance director.

“To defend themselves, they demand this of us,” he said. “To defend ourselves, we do it.”

Budget cuts

The University of Florida’s Institute of Food and Agricultural Sciences (IFAS) oversees the state’s Extension services. A few months ago, the university’s president was considering major cuts to the IFAS budget to make up for an anticipated state funding shortfall, but the agriculture industry rallied in support and any talk of singling out the university’s agricultural arm has largely been shelled, according to McAvoy.

But IFAS will still have to endure budget cuts this year, just like everybody else. The state budget was unresolved in April, but Jack Battenfield, director of external and media relations for IFAS, said the university would know the extent of the damage by mid-May.

Extension and research personnel have been feeling the effects of a tight budget since last year, when travel, training and other activities were reduced. No jobs were cut, but people didn’t get raises, either, McAvoy said.

“We’ll have to tighten our belts a little more, which could hurt our ability to help the industry.”

Fortunately for IFAS, the state agriculture industry has a tradition of supporting its programs and taking up budget slack. Hopefully, that will continue to be the case, McAvoy said.

Industry support helped the university gain a second tomato breeder last August. The new breeder cooperates with John Scott, who’s bred tomatoes for the university for 27 years. Scott didn’t have any official numbers in April, but he had a general idea of how large this year’s budget cuts would be for the tomato breeding program. It’ll be tough, he said, but not as tough as it will be in some other departments, where people will probably lose their jobs. No one in Scott’s department will have to be laid off – this year.

However, Scott won’t be hiring any graduate students until the budget loosens up, which means some tomato breeding research will be curtailed. The department will stay focused on its most critical research, such as developing varieties that are resistant to tomato yellow leaf curl virus.

“We’re going full-bore on that,” he said.

Despite the challenges, Scott was reasonably optimistic about the survival of Florida’s tomato growers.

“Hopefully, things will work out and we’ll have a healthy industry in the future,” he said. “But there’s no guarantee.”