Fresh potato trade with Mexico remains frustrating for US growers
In April of this year, by a vote of 5-0, the Mexican Supreme Court ruled in favor of overturning a lower court decision that prevented the Mexican federal government from allowing imports of fresh U.S. potatoes throughout the country.
While the ruling should be cause for celebration, there is much concern that CONPAPA — an association of Mexican potato growers — will find new ways to undermine the agreement and hinder market access once again.
The ruling marks the end of a decade-long legal process that began when Mexico’s potato industry CONPAPA sued its government to prevent competition. While the ruling is a huge victory for the U.S. potato industry, this does not mean that the market is now open and exports of U.S. fresh potatoes can be shipped throughout Mexico.
“How long these will take is the million-dollar — or shall I say $200 million question,” said John Toaspern, chief marketing officer at Potatoes USA, pointing out that that is a conservative estimate for what the market could become.
While solid statistics on fresh potato consumption in Mexico are difficult to find, sources agree that it is very low, and among the lowest in Latin America. In 2008, for instance, FAO reported that Mexicans consume approximately 17 kilograms (about 37 pounds) of potatoes each year per capita. That’s pittance in comparison to U.S. consumption, which was reportedly 115 pounds (52.3 kg) in 2018. And it’s next to nothing when compared to annual maize consumption, which FAO reports as 400 kilos (881 pounds) annually.
Low consumption, said Toaspern, is linked to a lack of supply and the very high prices Mexican consumers have to pay for fresh potatoes. Mexican fresh potatoes sell for around 25 pesos per kilogram throughout Mexico. U.S. potatoes that enter the 26-kilometer border region, by contrast, sell for between 10 and 15 pesos per kilo.
But demand is rising, he said, pointing to increased exports of frozen potato products from the U.S., Canada and the European Union.
Before trade can begin, though, the Mexican Supreme Court must first publish its ruling. This was expected in mid-June, but at the time of writing it had not yet been published. The ruling must clearly state that the Ministry of Agriculture has the authority to determine import regulations, and that those regulations are based on science.
In a letter to Secretary of Agriculture Tom Vilsack and U.S. Trade Representative Ambassador Katherine Tai, National Potato Council CEO Kam Quarles expressed concern that Mexican market access may only be temporary. He worries that Mexican officials may invent a way to halt imports again.
“The long history of this dispute confirms that the Mexican government is only grudgingly allowing access for U.S. potatoes, as the Mexican potato cartel, CONPAPA, is exerting great political power to impede competition with the U.S.,” he said.
The most recent indication of this intention occurred in April when SENASICA changed their U.S. fresh potato import protocols. The change, said Quarles, was made without notice to the U.S., and involves additional sampling of U.S. potatoes to be sent to a laboratory that is selected and paid for by CONPAPA.
Toaspern is also concerned. The Mexican Ministry of Agriculture, he said, must reinstate the regulations that were in place when the lawsuits were brought. The most important of these is the document that outlines the requirements for the importation of U.S. potatoes. One of the requirements is that potatoes be packed in bags of 20 pounds or smaller, and must carry a label in Spanish that reads: This product must not be used for sowing.
The process could take months, said Toaspern.
“We’re also certain that CONPAPA will lobby the Ministry of Agriculture and others not to proceed,” he said.
Concern isn’t restricted to those within the U.S. potato industry; Mexico’s avocado growers in the state of Jalisco worry that delays will hinder access to the U.S. market. Their access is contingent on the successful implementation and importation of U.S. fresh potatoes into Mexico. In his letter to Vilsack and Tai, Quarles suggested using the avocado growers as leverage.
“Should Mexico continue its historical pattern by delaying reinstating market access for U.S. potatoes or illegitimately restricting the market, we strongly urge USDA and USTR to move forward with the dispute resolution process under the U.S.-Mexico-Canada Agreement and thereby seek to apply tariffs against Mexican exports to the U.S. such as avocados,” he said.
Potatoes USA and the National Potato Council continue to work with officials in Mexico, as well as the USDA, to get U.S. fresh potatoes into Mexican kitchens.