NAFTA as a teenager

The USDA's Economic Research has released a couple of reports we should note. One is the 39-page PDF Fruit and Tree Nuts Outlook, and can be found at this link. The outlook report extensively reveals freeze damage in California and a wealth of grower and retailer stats.

The other ERS report is even more interesting, and looks at NAFTA at 13.

The 49-page NAFTA report is found here.

Of particular note is a table that shows the relative market share of Mexican and Canadian fresh produce shipments to the U.S. For example, tomatoes from Mexico accounted for 16% of U.S. disappearance from 1991-1993, and 29% from 2003-05. The market share for squash jumped from 19% to 35% in the same time period, and bell peppers grew from 18% share of U.S. disappearance to 40%.


From the report:


A major result of the heightened integration of North America’s fruit and vegetable market is that imports from the NAFTA countries have become more important to U.S. food supply. In 2004, Mexico and Canada supplied about 8 percent of the fresh or frozen fruit available in the United States and 12 percent of the available fresh or frozen vegetables. In 1990, these shares equaled 5 percent and 6 percent, respectively. Changing diets and the development of off-season supplies of fresh produce outside the United States have fostered a shift in U.S. consumption away from processed fruits and vegetables and toward fresh produce. In 2004, fresh produce accounted for 48 percent of U.S. fruit and vegetable supply, up from 44 percent in 1990 (USDA, Economic Research Service, 2006a; USDA, Foreign Agricultural
Service, 2006).


Net imports (i.e., imports minus exports) provide another indicator of the increased reliance on imports to supply U.S. fruit and vegetable consumption (table 3). Prior to NAFTA, net imports from Mexico exceeded 15 percent of U.S. supply for a wide variety of produce—including fresh limes, fresh mangoes, fresh papayas, fresh asparagus, bell peppers, broccoli and cauliflower for processing, fresh cucumbers, squash, and fresh tomatoes. Since NAFTA’s implementation, a number of these commodities—fresh limes, fresh papayas, bell peppers, squash, and fresh tomatoes—have experienced an increase of at least 10 percentage points in this measure. Net imports from Canada now account for a larger portion of U.S. supply of bell peppers, fresh cucumbers, and fresh tomatoes than they did in the early 1990s. Indeed, Canada has become a net exporter to the United States of fresh cucumbers and fresh tomatoes. Again, U.S. tariffs toward Canadian product were small for these commodities prior to CUSTA.


TK: No surprises here, but confirmation that Mexico and Canada are more and more integrated into the U.S. food supply; note also the recent decision by Taylor Fresh Foods to locate a fresh-cut plant in Mexico that will ship product to the U.S.