A new report written by Luis A. Ribera, Landyn Young and Dan Hanselka of the Texas A&M AgriLife Extension Service outlines the damage imported grapefruit is having on the U.S. grapefruit industry. The report is titled “Economic Impacts of the Suspension of Juice Content Requirement on Imported Grapefruits from Mexico.”
“The U.S. Standards for Grades of Florida Grapefruit and Marketing Order 905.306 sets standards for grade, size, quality and maturity for grapefruit imported to the U.S.,” states the report. However, in PATCH #65 on April 26, the U.S. Department of Agriculture ordered the suspension of the juice content requirement that pertains to maturity determination for imported grapefruits under Section 8e.
“The relaxation in standards of maturity for imported grapefruits gives an unfair advantage to Mexican grapefruit producers and exporters over Texas and U.S. producers overall,” states the report. “Mexican grapefruit imports from January to November have increased by 99.7% year-over-year.”
The Texas Cooperative Inspection Program (TCIP) reported 51 loads of grapefruit crossing from Mexico to Texas from Sept. 1 to Oct 28 in 2021. “Based on TCIP inspection reports, if the juice content requirement for maturity determination had not been suspended, 149 out of 174 lots out of those 51 loads would have failed quality standards and been rejected,” the authors say in their report. “In other words, 85.6% of the tested lots would have previously been rejected for sale to American consumers.”
The economic impacts of PATCH #65 were estimated using IMPLAN, an economic input/output model. Economic multipliers for each sector of the economy were used to estimate how increased imports from Mexico and a reduction in Texas grapefruit sales will affect business activity, income and employment in other sectors of the economy that supply inputs and services to the grapefruit industry.
Given the current Texas grapefruit production shortage due to winter storm Uri, it is assumed that Mexico will cover that shortage with at least their historical U.S. market share of 46.8%. The report warns that, “assuming $30/carton and that 85.6% of the fresh grapefruit imports from Mexico would have been rejected due to failed quality standards, the Texas grapefruit industry could permanently lose $43.3 million from customers that have a bad experience consuming fresh grapefruit.”
The report estimates that the suspension of juice content requirement for grapefruit imported to the United States is estimated to result in a $70.5 million annual loss to the Texas fresh grapefruit industry from an increase of Mexican grapefruit imports.
“Losses in fresh grapefruit sales are estimated to reach $43.3 million. These sales losses would be accompanied by an additional loss of $27.2 million in associated economic activity required to produce and market the crop. A total of 1,008 jobs would no longer be required to support the Texas fresh grapefruit industry. Of these, 778 would be in citrus production and 230 in agriculture services, finance, business, health care, transportation, wholesale/retail trade and food/beverage,” states the report.
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