U.S.-Mexico fruit trade - U.S. Dept. of Agriculture, Economic Research Service report

Situation and Outlook Report: Fruit and Tree Nuts, Nov, 1991 by Dennis A. Shields, Joani Dong

Abstract: Fruit trade between the United States and Mexico increased from $146 million in 1986

to $334 million in 1990. The United States exported $48 million of fruit, mostly deciduous fruit,

to Mexico and imported $286 million from Mexico, primarily orange juice, mangoes, strawberries,

and grapes.

Keywords: Fruit, exports, imports, Mexico, United States. Negotiations for the North American Free Trade Agreement (NAFTA) may reduce or eliminate trade restrictions between Canada, Mexico, and the United States. Trade ministers from the three countries met in June 1991 to begin the talks, and later met in October. The Agricultural Negotiating Group has held working meetings throughout the fall to discuss the exchange of tariff offers and requests on nontariff measures. Higher level talks are scheduled to resume early next year. Trade flows of many agricultural commodities, including fruit, would be affected by such an agreement. The U.S. fruit industry is particularly concerned about trade between the United States and Mexico. For some fruits, Mexico may gain market share in the United States, but for others, the United States may be able to increase exports to Mexico. This paper examines fruit trade between Mexico and the United States during the last 5 years.

U.S.-Mexico Trade Increases

Agricultural trade between Mexico and the United States increased from $2.3 billion in 1982 to $5.3 billion in 1990. About 10 percent of all U.S. agricultural imports come from Mexico, while about 7 percent of all U.S. exports go to Mexico. Mexico is the fifth largest market for U.S. agricultural exports, and the United States is by far the largest export market for Mexico. The balance of agricultural trade has switched between the two countries, but U.S. exports have led imports in the last 3 years. In 1990, the United States had a $760-million agricultural trade surplus with Mexico.

Mexico Dominates Fruit Trade, but U.S. Gains Ground

Although trade of fresh and processed fruit between Mexico and the United States has been only about 5 percent of total agricultural trade between the two countries, it increased from $146 million in 1986 to $334 million in 1990 (calendar year). In 1990 Mexico's fruit exports of $286 million to the United States consisted primarily of orange juice, mangoes, strawberries (fresh and frozen), grapes, and limes. U.S. fruit exports to Mexico in 1990 were $48 million, only 2 percent of total U.S. fruit exports, but were up from only $5.7 million in 1986. Fresh apples, pears, prunes (fresh and dried), raisins, and peaches make up the bulk of U.S. exports to Mexico.

Mexico's Orange Exports Top the List

Oranges and orange products represent the largest commodity group of Mexican fruit exports to the United States at over $90 million in 1990, up from $21 million in 1986. Frozen concentrated orange juice (FCOJ) imports from Mexico represent less than 15 percent of total U.S. imports, but they are the second largest, behind FCOJ imports from Brazil. Like Mexican FCOJ exports to the United States, Mexican fresh orange exports have been quite variable and depend upon supply conditions in both countries. In 1990 the United States received about 28 percent of its fresh orange imports from Mexico, compared with 13 percent in 1989. However, Mexican imports account for less than 1 percent of U.S. domestic consumption. Total U.S. citrus imports from Mexico increased from $25.2 million in 1986 to $101.8 million in 1990, the largest value increase of all U.S. fruit imports from Mexico. Mango imports from Mexico have more than doubled from $24.7 million in 1988 to $52.4 in 1990, returning to pre-1986 levels. A change in the phytosanitary requirement that restricted and then eliminated the use of ethylene dibromide (EDB) on U.S. mango imports in 1986-87 significantly reduced U.S. mango imports; however, U.S. mango imports then increased as exporters gained experience using the required treatment, a hot water dip. About 95 percent of the U.S. mango supply is imported, with about 80 percent coming from Mexico and the remainder from the Caribbean Basin Initiative group (primarily Haiti). U.S. per capita mango consumption has increased from 0.05 pounds in 1970 to 0.42 pounds in 1989. Strawberries (fresh and processed), at $31.2 million in 1990, are the third largest U.S. fruit import from Mexico, up from $23.1 million in 1986. Exports of fresh strawberries from Mexico represent about 9 percent of Mexican production and about 4 percent of U.S. consumption. In 1990, frozen strawberries accounted for 60 percent by value of Mexico's strawberry exports to the United States. U.S. fresh grape imports from Mexico were $18.9 million in 1990 but reached $43.8 in 1988. Limes, $7.8 million in 1990 compared with only $3.5 million in 1986, round out the top five Mexican fruit exports to the United States. Mexico is one of the world's largest lime producers, and its lime exports to the world have grown at an annual-average rate of 9 percent. U.S. lime imports, mostly from Mexico, account for almost half of U.S. consumption.