Low-priced tomatoes coming across the Mexican border are cutting into the profits of Florida's tomato growers - and the banks that lend to them.

Both groups are counting on a new U.S.-Mexican deal that puts a $5.17 floor on the price of a 25-pound box of foreign-grown tomatoes.

If the Nov. 1 agreement isn't enforced, the state's farmers and agricultural lenders say it will be one more blow to agricultural areas already struggling with strict environmental regulations and the lingering effects of Hurricane Andrew.

"Our farmers have been going broke, one after another," said Steve Price, president and chief executive of Community Bank in Immokalee, Fla. "The banks are suffering along with the growers."

Immokalee, a town of 14,120 people in south Florida's agricultural center, is home to many of the state's tomato and pepper farmers.

But as in other parts of Florida, the number of those farmers has been rapidly declining over the past few years. Florida is the top producer of tomatoes nationally, generating $400 million in revenues compared with $800 million a few years ago. The state Department of Agriculture estimates that the number of commercial tomato growers statewide has dropped to less than 80, from 200 growers about three years ago.

For banks, that's meant fewer customers and more delinquent loans.

Community Bank, which does about 80% of its business in agriculture or agriculture-related lending, has seen commercial deposits drop nearly 45% in the last two years. "That's not from losing business to competitors; that's from losing business," Mr. Price said.

"We've had farmers who haven't been able to pay their loans timely - not that they won't be paid," said Bill Losner, president and chairman of First Bank of Homestead. "The American farmers are just not able to compete with the Mexican farmers."

The $132 million-asset First Bank hasn't increased its assets since Hurricane Andrew nearly wiped out the Miami suburb four years ago. In particular, the storm devastated Homestead Air Force Base, forcing its closure, and the bank lost customers.

But Mr. Losner said the loss of tomato farmers alone has contributed to a 26% decline in the bank's deposits over the past few years.

"It was really sad to see people who were generations of farmers in that business who had to get out because they lost basically everything they had," said Chris Shupe, president and CEO of First Federal Savings Bank of the Glades.

While some of the drop in farmers can be attributed to consolidation among growers, state officials place much of the blame squarely on the three-year-old North American Free Trade Agreement. Nafta opened up the Canadian and Mexican borders to free trade, eliminating tariffs and allowing each country to do business in the others more freely.

In Florida, state agricultural officials say the result has been devastating to tomato growers because Mexican tomatoes have flooded the U.S. markets. The state had filed an anti-dumping complaint against Mexico with the International Trade Commission, eventually prompting the tomato agreement.

Even with the agreement, however, Florida farmers aren't off scot-free. The $5.17 floor is still less than the $7.50 it costs to grow, pick, pack, and ship Florida tomatoes, said Bob Epling, president and chief executive of $240 million-asset Community Bank of Homestead.

And just to top it off, an amendment passed last week by Florida voters would require farms polluting the Everglades to pay for cleanup, creating potentially more problems for some bank customers.

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