Resolution of trade issues needed for Washington farm sector: Column
By Don C. Brunell
The good news is Washington’s cherry crop is projected to be as good as 2018; however, absent tariff relief from the ongoing U.S.-China trade tiff, a key market will remain limited.
When China’s tariff went from 10 percent to 50 percent last July, right in the middle of the harvest, exports to China went from the most profitable to the pits, Fox News reported. “Growers in Washington state, by far the largest producer of sweet cherries in the U.S., saw their bumper crop lose $86 million in value overnight.”
For example, Washington Fruit and Produce Company in Yakima watched exports plunge 54 percent after the tariffs were raised. “It’s made it extra painful because Chinese consumers pay a premium for American produce,” Fox News added.
U.S. farmers are hopeful current negotiations will bring relief soon. Overall, China exported $505 billion in goods to the U.S., and U.S. companies exported $135 billion in goods to China in 2017. The White House wants to correct this trade imbalance and protect intellectual property.
Cherries are Washington’s bellwhether crop. Unlike apples, potatoes and wheat, they cannot be stored for months. The window between harvest and sale is a few weeks.
China is our second-largest buyer behind Canada. It accounts for more than a quarter of our cherry exports. South Korea and Taiwan combined import another 25 percent.
A recent Capital Press report found our state’s cherry farmers lost $106 million last year because of China’s retaliatory duties.
B.J. Thurlby of the Northwest Cherry Growers told the Capital Press: “Trade data indicates that Northwest growers retailed 1.7 million, 20-pound boxes of cherries to China last year, a figure which reflected a drop of nearly 50 percent from 2017 when three million boxes were sold.”
Meanwhile, Turkey, the world’s largest cherry producer, is expanding its shipments into China. Turkey’s biggest traditional markets have been Russia and Germany. Chile, the world’s sixth-largest grower with production a quarter of the size of U.S. production, is increasing its deliveries to China as well. Neither country is subject to Chinese tariffs.
Thousands of Washington farmers who grow apples, cherries, pears and wheat now find themselves on the front lines of a battle between the two largest economies in the world, The Seattle Times reporter Derek Hall wrote last July.
Wheat growers in the Pacific Northwest have also been smacked by the trade dispute. China bought 300,000 metric tons of soft wheat from the Pacific Northwest in 2017, worth about $60 million and as soon as the threat of tariffs surfaced, Chinese customers stopped buying.
Our state’s agriculture sector exports about 30 percent of its products. Other top Washington fruit crops targeted by China include apples and pears. In 2017, China bought about $50 million worth of apples and $1.5 million in pears.
New export markets for Washington agriculture products take time to develop, so growers fight hard to keep existing customers. For example, the Northwest Cherry Growers Commission is planning to invest over a half-million dollars into promoting buyer-incentives in China this spring.
Northwest growers also are eyeing India as a potential market, but exporters remain apprehensive because India’s importers want shipments of cherries sent by boat rather than flown, which doesn’t work well with fumigation requirements, the Capital Press reports.
According to U.S. News, nearly a quarter of our state’s exports (more than $18 billion) went to China last year, making Washington by far and away America’s biggest exporter to the Chinese.
Washington’s $49 billion food and agriculture industry employs 140,000 people. Thirteen percent of the state’s economy comes from agriculture. Failure to end this trade war will impact all Washingtonians.
Don C. Brunell is a business analyst, writer and columnist. He retired as president of the Association of Washington Business. He can be contacted at theBrunells@msn.com.