Processing Plants Feeling Pressure

In 2023, the U.S. became a net food importer for the first time, which the Midwest Food Products Association says isn’t a good thing. Jason Culotta, president of the Midwest Food Products Association, says the imbalance began due in part to a growing emphasis placed on “fresh fruits and vegetables.”

“Fresh fruits and vegetables, especially, have been imported a lot more as fresh has been promoted and seen as a healthier option, even though nutritionally it’s equivalent, whether fresh, frozen or canned. We’ve seen that track continue into frozen, and now we’re seeing it in Canada as well, where more imports are coming into the country really since the pandemic.”

Culotta talks about why the U.S. has become a net food importer.

“A big reason with canned is specific to tariffs. So, if you recall President Trump had imposed tariffs on steel in 2018, and President Biden has essentially maintained the same policy as his predecessor. What that meant for canned food is we use tin plate steel to produce the food cans. Most of the tin plate in the nation goes into food cans. We have struggled with the price of our product because we had to import tinplate steel previously. The domestic industry does not produce enough to meet our national demand for this in food packaging, and the tariffs have just really harmed the industry by driving our prices up.”

He says the high price of tin plate steel is making life difficult for food processors like the MFPA.

“Today, if you go in the grocery store, if you grab a can off the shelf, about 40 percent of the price of that can is just the steel. So, it’s more than the crop to grow and put the sweet corn in the can. It’s more than the labor to get into the can, and so that’s a real inhibition for our industry. Because canned is a low-margin, high-volume product, just pennies differences in the product can result in the loss of contracts.”

That means foreign imported products have been able to underbid American food products because American companies pay a tariff on their steel.

“It’s a difficult issue to resolve. So, we’ve asked for an exemption specific to tin plate from the tariffs. Tin plate is about two percent of all U.S. steel consumption. It’s not even a large segment, and here as it deals with food security, we really thought we’d be able to make more headway and regardless of the administrations, we’ve been challenged to do so.”