NOGALES, AZ — The Mexican tomato industry is into its second full shipping season of working under the United States’ price floor for Mexican tomatoes.

Voicing concern against this agreement is one of the largest shippers of Mexican tomatoes, Alejandro Canelos, director of Apache Produce Imports LLC, which ships the “Plain Jane” brand.

“I was one of many people here in Nogales that were arguing two years ago for a continuation of the suspension agreement, but that was only because we were basically threatened with a worse alternative — punitive duties on tomatoes from Mexico,” Canelos noted on Feb. 8. “In retrospect, I think the extension of the deal with the significantly higher minimum pricing was a very poor outcome.”

“What we see now is that limiting tomatoes from Mexico through a floor price effectively just moves inventory from one place to another — in this case, from the border back to the growing areas,” he continued. “Regardless of whether excess tomatoes are crossed into the U.S. or not, they’re still a part of the supply in the marketplace, and everybody knows it. Even if today’s product is dumped due to an inability to sell it, there will be plenty more behind it tomorrow. And the next day. And as long as an artificial floor price keeps the market from clearing all available supply, prices will be continually suppressed whether Mexican tomatoes are crossed into the U.S. or not.”

The best-case scenario for the Florida industry, besides innovation and improvement, he suggested, “is that over the long term, Mexico devotes significantly less acreage to tomato production. This, however, will be terrible for consumers and the industry in general, as shortages will be much more severe when they inevitably occur.”

“I think it’s also important to look at this issue with a larger perspective, that of a complex, ever-evolving trade relationship between the United States and Mexico,” Canelos said. “Both governments have political realities they need to contend with at home, and both countries pursue protectionist measures in order to defer to these realities,” he continued. “While tomatoes are the be-all end-all to those of us that depend on them for our livelihood, in reality they are just a cog in the wheel of horse trading between two powerful — and mostly cooperative — sovereign neighbors.”

As of now, Canelos believes “the reference price is way too high. It is economically inefficient for all involved. It is not helping the people it is designed to help.”

After 2013 negotiations, “What the majority of the industry agreed to they have got to live with now,” he added. “It’s not good for U.S. consumers and it’s not good for the industry.”

Canelos said he is concerned with the new reference price on tomatoes and how that will affect the market, noting that the minimum price was put significantly higher to limit production from Mexico. He also mentioned that in January and early February, the market collapsed and it’s at the minimum for most tomato items in Nogales.

“If the market is at $6.50 and we have to sell at $8.50, we never get rid of our inventory,” he commented.

This, he said, is called a “sticky bottom” because the market price is stuck at the minimum price. “We had 14 straight weeks at the minimum some years ago. And that was at a significantly lower floor price.” If there is no minimum, he added, the market will naturally clear itself.

However, “It’s good old protectionism, and that’s why they do it,” Canelos said. “They protect the U.S. industry at the expense of the consumer.” And consumers are forced to pay unnaturally high tomato prices. “It raises the prices for everybody to profit a few growers in Florida.”

The saving grace, Canelos added, is that “Mexico is so innovative and creative and good at growing tomatoes that we will figure it out somehow. U.S. consumers still need us.”