• Topics: Food and Resource Economics  |   |  VanSickle, John J  |  Tomato Economics  | Vegetable Industry 

U.S. Production Trends and the Impact of the Florida Fresh Market Tomato Industry to the Economy of Florida¹

Introduction

Tomatoes have long been an important produce item demanded by consumers. Advances in production and transportation technology and improvements in quality have helped to grow the demand for fresh market tomatoes. U.S. consumption of fresh tomatoes grew 71 percent from 15.4 pounds per person in 1991 to 20.7 pounds per person in 2006 (Table 1). U.S. total domestic utilization increased over this period from 3.87 billion pounds in 1991 to 5.79 billion pounds in 2006, an increase of 1.91 billion pounds. Imports claimed 56 percent of that growth in domestic utilization by increasing 1.08 billion pounds. Exports from the United States have been fairly flat, ranging from a low of 286 million pounds in 1998 to a high of 410 million pounds in 2000.

U.S. production of fresh market tomatoes declined from 1992 to 1996, but increased after 1996 when U.S. growers successfully petitioned the U.S. International Trade Commission for relief from imported tomatoes that were unfairly dumped on U.S. markets. That agreement led to greater discipline of imports from Mexico and it appears to have benefited both U.S. and foreign growers (VanSickle 1997). U.S. producers of fresh market tomatoes have been fortunate to be part of a growing market for their commodity over the last 16 years, but much of that growth is greenhouse-grown tomatoes. Greenhouse tomatoes overtook field-grown tomatoes in 2005 as the largest segment of imported fresh market tomatoes. This is indicative of the changing market for fresh market tomatoes where consumers are demanding more vine ripe and specialty type tomatoes at the retail market. Mature green tomatoes, primarily supplied by U.S. growers, still command a larger share of the food service trade.

U.S. Production, Imports, Exports, and Domestic Utilization of Fresh Market Tomatoes

U.S. production of fresh market tomatoes increased 25 percent from 1991 to 2007 (Table 1). Net trade in tomatoes (imports less exports) shows that international trade in tomatoes added an additional two billion pounds to the U.S. market in 2007, increasing by 306 percent since 1991. Producers have been fortunate to see a growing market for their product, with domestic utilization increasing from 3.89 billion pounds in 1991 to 6.12 billion pounds in 2007, a 57 percent increase. Imports claimed roughly half the increase in domestic utilization.

U.S. production of fresh market tomatoes is concentrated in the southeastern United States and California (Table 2). Alabama, Florida, Georgia, North Carolina, South Carolina, Tennessee, and Virginia produced 2.11 million pounds of fresh market tomatoes in 2006, or roughly 57 percent of all fresh market tomatoes produced in the United States. California produced 1.23 million pounds, or roughly 33 percent of the U.S. total production. The rest of the nation produced less than 10 percent of all fresh market tomatoes grown in 2006. These data highlight the concentration of production of fresh market tomatoes in the southeastern United States and California. The Southeast concentrates its production in the fall, winter, and spring months while California concentrates its production in the spring, summer, and fall months.

While Florida is the single largest producer of fresh market tomatoes, with 1.45 billion pounds produced in 2007, the state has lost market share to other U.S. producers, who have increased their production by 305.6 million pounds since 1991 (Table 3). Imports, however, have taken a far greater share of the market from Florida producers, increasing by 1.565 billion pounds since 1991.

The Economic Impact of the Florida Tomato Industry

The Florida tomato industry produces more fresh market tomatoes than any other state in the United States. The Florida tomato industry produced 1.455 billion pounds of fresh tomatoes in 2007 on 38,200 acres, with a total value of $464.24 million. An estimated 90 percent of Florida tomatoes are shipped out of state.

Total regional economic impacts for the Florida tomato industry were estimated using regional input-output multipliers developed from IMPLAN.³ Multipliers capture the indirect and induced effects of sales outside Florida (exports), which bring new money into the region and generate further economic activity as these dollars circulate through the economy (Miller and Blair 1985). Indirect effects represent the economic activity generated by businesses that furnish inputs to the industry being evaluated, while induced effects represent the impacts of industry employee household spending. The total economic impacts are the sum of direct, indirect, and induced effects.

Total industry output or sales of fresh market tomatoes in Florida in 2007 were about $464 million. As a result of the indirect and induced multiplier effects from these sales, the total output impacts were estimated at $997 million (Table 4). Direct employment in the industry was estimated at 2,987 full-time and part-time jobs, and total employment impacts were estimated at 8,231 jobs. The direct value-added contribution of the Florida tomato industry was $298 million, and total value-added impacts from multiplier effects were $619 million. Value added is a broad measure of economic contribution that is comparable to the Gross Domestic Product (GDP) at the national level, and represents the net income created by an industry, or the difference between industry revenues and input purchases from other sectors; it includes personal and business net income, and capital consumption. The labor (earned) income impact of employee wages and benefits and business proprietor income was estimated to be $299 million. Indirect business tax impacts to local, state, and federal governments were $30 million.

Conclusions

The tomato industry is an important commodity in the U.S. agricultural sector. U.S. producers supply more than 4.1 billion pounds of fresh market tomatoes in the domestic market. Florida is the largest producer of fresh market tomatoes in the United States, producing 1.45 billion pounds in 2007. The Florida tomato industry is important to the state economy, contributing total value of $997 million, and total employment of 8,231 jobs, worth $299 million in labor income.

References

Miller, R.E. and P. Blair. 1985. Input-Output Analysis: Foundations and Extensions. Upper Saddle River, NJ: Prentice Hall, Inc.

VanSickle, J.J. 1997. A compromise in the fresh tomato trade dispute. Florida Journal of International Law XI(2): 399-408.

Tables

The Institute of Food and Agricultural Sciences (IFAS) is an Equal Opportunity Institution authorized to provide research, educational information and other services only to individuals and institutions that function with non-discrimination with respect to race, creed, color, religion, age, disability, sex, sexual orientation, marital status, national origin, political opinions or affiliations. For more information on obtaining other extension publications, contact your county Cooperative Extension service.

U.S. Department of Agriculture, Cooperative Extension Service, University of Florida, IFAS, Florida A. & M. University Cooperative Extension Program, and Boards of County Commissioners Cooperating. Millie Ferrer-Chancy, Interim Dean.

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