Other good developing news is that Farmer’s Best plans to open a new “full-blown” warehouse and shipping facility in Pharr, TX. The facility was scheduled to be completed this September but complications caused by the COVID-19 pandemic have postponed completion until November 2020.
Shipping through Texas is nothing new for the company, but the facility will be helpful to streamlining the business.
In recent years, it has been normal for Farmer’s Best to ship 60 or 65 percent of its west Mexico vegetable volume through Texas, with the remainder passing through the firm’s Rio Rico, AZ, facility. However, the 2020 season “was a little different” because of adjustments due to the pandemic and because of strict new rules on tomato exports, due to the Tomato Suspension Agreement.
When a high level of tomato inspections was imposed in early April, there were two weeks of slight delays but since “it’s gone pretty smoothly.”
In Arizona, Farmer’s Best hosted USDA tomato inspectors at a leased facility in order to leave operational room in its home base. This spring in Texas, all USDA tomato inspections were at Farmer’s Best’s current facility.
“In 2020, the Tomato Suspension Agreement in terms of the amount of tomatoes or price-per-box was not a bad hit. But we can’t bring the volume to the border that we are used to, because of the rules that are in place. Distribution was curtailed quite a bit, as certain customers had fears” related to the handling of rejections at the receiving end.
Rejected tomatoes either had to endure the cost of disposal or the shipper had to absorb the high cost of transportation back to the crossing point. As a result, Farmer’s Best joined its customers in being more cautious in shipping. That said, the moderation “I believe has improved the overall quality of what ends up in the U.S.,” Lewton said. This was one of the factors in increasing prices this spring.
A big issue was weather-related production problems that hit Mexican fields in November and December. Then again in January. Disrupted production “impacted us until springtime,” Lewton said. “Without question, I’m glad to have this year under my belt. All here would agree. Going forward, we’ve learned about the new Tomato Suspension Agreement.