Tariffs Hit Fruit Growers Hard at Harvest
September 11, 2018 Reuters reports U.S. cherry growers saw shipments held at Chinese ports and hit with prohibited duties during harvest.
Ray Norwood, Director of Sales and Marketing for Auvil Fruit Co., told the news outlet the operation had to lower prices and find alternative destinations for the cherries. Auvil Fruit Co. exports about 80% of the operations’ cherries.
Apple growers are equally nervous about the harvest season this year, with China imposing stiff tariffs on U.S. goods including fruits and nuts in retaliation to a U.S-imposed tariffs on imported goods from China.
Tariffs on 10 fruit and tree nut exports are expected to cost U.S. growers around $3.4 billion annually, according to a recent study from the University of California Agriculture and Natural Resources’ Agricultural Issues Center.
In California, fruit and tree nut exports account for half of production and in Washington, about 30% of apples are exported.
“I don’t know just how much it’ll be down, but we do think it’ll be drastic,” Rebecca Lyons, International Marketing Director of the Washington Apple Commission, noting effective 50% levies on U.S. apples in China, told Reuters. “The global apple market is very competitive … Even if the tariffs are lifted, it’ll be harder for us to get back into those markets.”
New York Delegation Lobbies for More Progress on Trade
A delegation of New York apple growers recently met with congressional members to highlight critical trade matters affecting the industry. Prior to NAFDA, Mexico imposed a 20% tariff on U.S. apples. But with duty free access, Mexico became the industry’s largest export market, quadrupling apple sales to $291 million in 2017.
This past March, in retaliation for U.S. tariffs on steel and aluminum, known as Section 232, Mexico hit the U.S. apple industry with a 20% tariff. While growers welcome the retention of duty free access in the new NAFTA replacement agreement, the effort won’t rid the retaliatory Section 232 tariffs plaguing the industry. Further, Canada is not yet a party to the new agreement. As the industry’s number three export market, USApple says it needs to be.
“While we appreciate this initial first step by the Administration, growers are still faced with a 20% barrier to our largest market,” said USApple Board Chair and President of New York Apples Sales Kaari Stannard. “One out of three apples grown is destined for export with a value of more than a billion dollars annually, so trade is critical to the apple industry.”
The organization also is concerned the new agreement with Mexico eliminates the so-called Chapter 19 resolution process that works to ensure fairness in the event of a dispute. Without Chapter 19, U.S. growers would have to work through Mexican courts, not an independent panel selected, in part, by the U.S.
“This year, the impact of disputes with Mexico, India, Canada, and China, our No. 1, 2, 3, and 6 export markets, will be felt deeply across the industry,” said USApple President and CEO Jim Bair. “Our growers want Congress to know the damage being caused in their jurisdictions by these trade disputes.”
Relief Package Announced
Last week, USDA Secretary Sonny Purdue launched a trade mitigation package to assist growers who would be impacted by trade retaliations. Fruit and nut growers will be limited to the Food Purchase and Distribution Program as part of the Trump administration’s $12 billion relief package.
USDA’s Agricultural Marketing Service will purchase commodities for four quarters, starting on Oct. 1. AMS will focus on products currently purchased for nutrition assistance programs given the existence of qualified USDA suppliers and specifications for these products. Examples include various forms and varieties of apples, blueberries, grapefruit, oranges, pears, cranberries, plums/prunes, walnuts, potatoes, and more. Below are the estimated food purchases:
| Commodity | Target Amount (in $1,000s) |
| Apples | $93,400 |
| Apricots | $200 |
| Beef | $14,800 |
| Blueberries | $1,700 |
| Cranberries | $32,800 |
| Dairy | $84,900 |
| Figs | $15 |
| Grapefruit | $700 |
| Grapes | $48,200 |
| Hazelnuts | $2,100 |
| Kidney Beans | $14,200 |
| Lemons/Limes | $3,400 |
| Lentils | $1,800 |
| Macadamia | $7,700 |
| Navy Beans | $18,000 |
| Oranges (Fresh) | $55,600 |
| Orange Juice | $24,000 |
| Peanut Butter | $12,300 |
| Pears | $1,400 |
| Peas | $11,800 |
| Pecans | $16,000 |
| Pistachios | $85,200 |
| Plums/Prunes | $18,700 |
| Pork | $558,800 |
| Potatoes | $44,500 |
| Rice | $48,100 |
| Strawberries | $1,500 |
| Sweet Corn | $2,400 |
| Walnuts | $34,600 |
| Total | $1,238,800 |
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