If we leave aside the aesthetic aspect of using this mulch, there are no benefits of it, only harmful effects which it may have on your plants. An important point to make a note of is that the hazards of red mulch do not involve the dye, but the material from which it has been prepared.
For instance, there are several types of mulch which use iron oxide as the dye or vegetable dyes and other natural products. These substances pose no threat to the plants. However, there are still some products which use petrochemical dyes.
Although most commercial dyes are safe, their content of petrochemicals can be hazardous, particularly to vegetable gardens. So, while going for red mulch, one must go for one which specifies that it contains biodegradable pigments.
You run the risk of harboring dangers of red mulch only when you are not sure if it has been manufactured using recycled or salvaged wood. The reason is that these woods have chances of containing Chromated Copper Arsenate (CCA). These are known as arsenic-treated woods, and they are made by treating lumber with CCA.
The problem with CCA is that it contains chrome, arsenic, and copper. As a result of improper testing and unlawful recycling, most recycled woods have been found to contain CCA. If the wood for the red mulch has been pressure treated, then it means that it has been treated with CCA.
As a result, there are high chances of arsenic leaking into the woods. It has been found to show carcinogenic activity, i.e., it may give rise to cancer in animals and humans. So, before you go for red mulching, you would want to know the details of the wood which had been in use in the manufacturing process.
Although unsubstantiated, most farmers and gardeners believe or claim that using red mulch stimulate plant growth and improve the health of tomatoes. This is because the mulch reflects more light onto the plants. Although there are several plants whose yield can be improved using red mulch, tomatoes in particular have an affinity towards this.
Fortunately, the dangers of red mulch are not as widespread as they used to be earlier. This is because most manufactures use non-toxic dyes, such as iron oxide, in their mulches. Iron oxide essentially rusts and pose no threats to humans or animals. The best red mulch you can get is from land clearing companies.
The wood that is used in manufacturing these mulches is brought from the raw lumber, instead of being treated with CCA. So the best thing you can do if you make up your mind to go for red mulch would be to throw some questions at the dealer and try to reconcile the details with the one cited here.