Trade war bites Washington apple industry

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THE LENS – MIKE RICHARDS – Washington state may be losing its largest market for apples given Mexico’s new retaliatory tariffs on U.S. imports. Agricultural stakeholders say they are disappointed that they are being targeted by the trade war and are urging President Donald Trump and his administration to consider how important their products are for the economy.

On June 5, Mexico announced it is imposing tariffs on $3 billion worth of American products including pork, steel, cheese and agricultural products in response to Trump implementing levies on Canadian and Mexican steel and aluminum on June 1, at 25 percent and 10 percent, respectively.

One hard-hit industry is the U.S. apple sector, which will now experience a 20 percent tariff when entering Mexico.

Washington produces two-thirds of all apples in the United States. The state represents 90 percent of all U.S. apple exports on an annual basis, and approximately one-third of Washington apples are sent to over 60 countries. Mexico has consistently been the number one export market for these fruits.

Todd Fryhover, President of the Washington Apple Commission (WAC), told Lens that Mexico has received slightly over 10 million boxes of apples each year and the country absorbs between 10 percent and 12 percent of Washington’s crop. Each year, the trade between the two countries is estimated to be between $200-$215 million.

Fryhover estimated that as of the time Mexico instated the tariffs, approximately 20 percent of the 2017 apple harvest is left unsold. The produce must be taken care of before the August harvest begins.

“It certainly feels like agriculture is taking the brunt of these trade issues, there is no question about that,” said Fryhover.

“The 20 percent tariff is problematic because they have a 12-month product need for apples year-round,” adding that the current duty to India is 50 percent, but it may be raised to 80 at some point before June 21.

“We are definitely feeling the financial impact of these trade discussions or disruptions,” said Fryhover. “Our only focus right now is trying to find some type of resolution and suggesting that the Administration find some sort of resolution before the next time our crop is being harvested.”

Fryhover also said that the sector is altering its sales patterns and considering other markets that don’t have harmful duties. The situation is fluid, however.

That said, Washington growers and distributers will not be able to move the same number of apples traditionally sold to Mexico into three or four other markets.

“Volumes will continue to ship to Mexico, but the market will have to determine at what price and who will absorb that cost.”

On the producer side, “It’s always a bit disheartening whenever someone specifically mentions the produce you grow” during a trade dispute, April Clayton told Lens. She is an organic apple farmer and runs Orondo-based Red Apple Orchards with her husband

“Until they finalize everything, there is nothing farmers can do besides talk to our congressmen and legislators and let them know how it will affect…business.”

It’s scary for anyone working in agriculture, she added, and it’s unfortunate that the sector is one of the first hit by a trade war.

“It’s a problem because if it cuts off your relationship with a trade partner and you have to take the time to build new relationships with other countries to send your fruit to. This is especially hard when farmers don’t have much time with the fall harvest approaching fast.

“If millions of pounds of apples don’t find a home or are not able to be sent to Mexico, then it will flood the market here in the U.S. and decrease its value…there definitely is a concern for apple growers whether they sell in the U.S. or Mexico.”

Posted By: Mike Richards, The Lens, June 8, 2018

Picture: Publicdomainpictures.net – Washington state apple growers are facing the consequences of U.S. trade policies which will make it harder to distribute the last of their products before the next harvest begins.

Source: WSFB