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WENATCHEE, Wash. — The Washington Apple Commission approved a status quo $10.2 million budget for 2018-19 and discussed trade, promoting proprietary varieties and grocery e-commerce in China at its May 24 meeting.
The budget includes about $4.7 million in revenue from a 3.5-cent per box grower assessment on the 2018 crop estimated at 135 million boxes, $4.87 million from the federal Market Access Program, $545,000 in grants and $100,000 from interest and rented office space.
The budget will spend $7.4 million on export promotions, with $4.87 million of that from MAP and $2.56 million from grower assessments.
The top six countries and their promotional allocations are:
• India: $1.25 million, up $280,000.
• Mexico: $1.14 million.
• Vietnam: $667,750.
• Central America: $518,000.
• Indonesia: $484,300, down $67,450 because of access issues.
• China and Hong Kong: $466,000, down $419,693 because of access issues.
Apples have been caught up in Chinese retaliatory tariffs that are responses to U.S. tariffs on Chinese steel and aluminum, but the situation is fluid with negotiations are ongoing.
In recent days, India added a 30 percent tariff on apples in retaliation for the U.S. steel and aluminum tariffs. That’s on top of its regular 50 percent apple tariff, said Mark Powers, president of the Northwest Horticultural Council in Yakima.
Jason Hafemeister, trade counsel to the Secretary of Agriculture, gave commissioners a 45-minute telephone tutorial on trade. More than 20 percent of U.S. agricultural production is exported, he said. While the U.S. runs an overall trade deficit it has a surplus in agricultural commodities and products, he said.
China recognizes the U.S. trade deficit is a problem and is willing to help by importing more agricultural products, he said.
A new North American Free Trade Agreement does not appear close and the president has to decide by June 1 whether to impose steel tariffs on Canada and Mexico, Hafemeister said.
Powers said market threats to U.S. ag products seem to be growing. Apple Commissioner Bob Mast, president of Columbia Marketing International in Wenatchee, said there’s a lot of nervousness about tariffs hurting cherry exports to China.
Regarding foreign promotions of proprietary varieties, Mast called it a slippery slope of keeping promotions proportionate to the varieties that generate the most in grower assessments. Rebecca Lyons, the commission’s export marketing director, also said it would be a slippery slope to push single varieties and that she doesn’t want to, but importers and overseas retailers are interested in new proprietary varieties and promoting them increases shelf space and positions the commission for the future.
Commission President Todd Fryhover said he will educate himself more on how individual companies already promote proprietary varieties and seek the advice of Mast and other commissioners on how to proceed.
Fryhover reported that Hema Supermarkets, part of the Alibaba Group in China, is leading the way in merging online and offline sales. Customers order online, have groceries delivered or go to the store and have them prepared into a meal to be eaten there, he said.
“It’s amazing what they are doing in China with e-commerce. It has to be a model for the rest of the world,” he said. “We think it’s a major trend moving forward.”