Tariffs Put Pressure On Processors

Vegetable processors across the country are feeling price pressure due to tariffs on steel. This is according to the Midwest Food Products Association. It’s amped up the competition with foreign processors.

Wisconsin is one of the top states in the production of the major processing vegetables. This includes green peas, snap beans, and potatoes. This year, at least two Wisconsin food processors are closing their doors.

MWFPA President Jason Culotta represents food processors in Wisconsin, Minnesota, and Illinois. He says in 2023, the U.S. became a net food importer for the first time. He says this is a problem because food processors cannot compete with the prices of foreign competitors.

The hurdle is a result of tariffs. Tariffs on steel have been in place since 2018. The cans that food goes into are tinplate steel. The U.S. does not produce enough steel for food processors, so steel needs to be imported.

The industry has struggled with the price of steel since the tariffs. About 40 percent of the price of canned goods is for the can itself. That’s almost half the cost – beating out the cost of growing the food or the labor to get the food into the can.

Foreign canned food products have been able to underbid American products for this reason.

MWFPA is asking for tinplate steel to be exempt from tariffs on steel. Culotta says it only accounts for 2 percent of America’s total steel needs. He says, unfortunately, there hasn’t been any progress.

It’s not the only hurdle that canneries face. In a separate interview with Mid-West Farm Report, UW-Madison Prof. and Sweet Corn Program Director Bill Tracy says overall vegetable consumption is down.

Tracy says there has been an ongoing decline in sweet corn production for frozen and canned products and other processed vegetables. He adds this shift is due to changing consumer preferences.

Del Monte Foods is closing its facility in Markesan at the end of April. In the statement, Del Monte Foods says it’s closing the Markesan plant to “align and streamline operational capacity with consumer demand.”

Conagra Brands is closing its Birds Eye facility in Beaver Dam in mid-June saying: “We have determined that we can continue to meet the needs of the business by making these products in fewer facilities.”