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Cherry growers seek federal aid to help offset Chinese tariff losses

The 2018 Northwest cherry crop final tally is 25.3 million, 20-pound boxes, making it second largest crop. More federal export promotion dollars are being sought to partially offset tariff losses.
Dan Wheat

Capital Press

Published on October 29, 2018 9:51AM

Stephen Ortega, an H-2A-visa foreign guestworker from Mexico, picks Orondo Ruby cherries at Griggs Orchards, Orondo, Wash., June 19. The industry picked its second largest crop this year and is seeking federal aid to partially offset Chinese tariffs.

Dan Wheat/Capital Press

Stephen Ortega, an H-2A-visa foreign guestworker from Mexico, picks Orondo Ruby cherries at Griggs Orchards, Orondo, Wash., June 19. The industry picked its second largest crop this year and is seeking federal aid to partially offset Chinese tariffs.

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YAKIMA, Wash. — Northwest Cherry Growers, the promotional arm of the region’s cherry industry, is seeking $1.5 million in additional federal export promotion help in 2019 in an attempt to make up for at least some of the $53 million in lost sales this past summer due to retaliatory Chinese tariffs.

The Yakima-based organization is working to meet a Nov. 2 deadline to apply for USDA Agricultural Trade Promotion money, part of the Trump administration’s $12 billion in mitigation of agricultural losses due to tariffs imposed by other countries in retaliation for administration tariffs on them.

Through a separate program, the Market Facilitation Program, USDA has announced the Farm Service Agency will accept applications through Jan. 15 for direct payments for cherry losses.

Northwest Cherry Growers already receives about $1.6 million per year in federal Market Access Program money. The $1.5 million would be on top of that for one year, said B.J. Thurlby, president of Northwest Cherry Growers.

In a report issued Oct. 25, NCG said the 2018 crop totaled 25.3 million, 20-pound boxes of cherries, second only to the record 26.4 million-box crop the year before.

The 2018 season was remarkable in that good weather — absent the normal crop-ruining rains, wind and hail — helped produce great quality, large fruit and a lot of it. Coming on the tail of a light California crop, it should have meant the perfect season.

It was good, but a 38 percent Chinese tariff became a 50 percent tariff on July 6 in addition to a 13 percent value-added tax, shutting down U.S. cherry sales to China.

The Northwest shipped 3.2 million boxes of cherries to China in 2017 at an approximate value of $127 million. That dropped to 1.6 million boxes and a value of $74 million in 2018, Thurlby said.

The $53 million difference is the minimum amount of lost sales because fewer Chinese purchases put downward pressure on prices in all other markets, he said. The real loss is likely more than the $86 million estimated by the Northwest Horticultural Council, Thurlby said.

The wholesale value of the entire crop, from the shipping plants, was an estimated $980 million, he said.

“Growers in Washington lost a tremendous amount of money due to the tariffs,” said Tom Riggan, general manager of Chelan Fresh Marketing, the state’s largest cherry marketer.

“It was significantly less in sales to one our best-paying markets that pays a premium for top quality fruit. That volume was pushed into other markets and put pressure on price in those markets,” Riggan said.

Chinese importers were “more aggressive than ever before” in June wanting to beat the shutdown, Thurlby said.

China was the industry’s No. 1 export market in 2017, but Canada regained that spot in 2018, buying 2.78 million boxes.

The industry shipped 10.7 million boxes of cherries in June, 13.5 million in July and 1.1 million in August.

A new daily shipment record of 693,127 boxes was set on June 25. The industry averaged 605,077 boxes per day from June 25 to July 3, a record for the week before the Fourth of July.

The U.S. market took 17 million boxes. Of the total crop, 77.6 percent went to North America, 8.3 percent to South Korea, 7.9 percent to China and 6.2 percent to other exports, excluding Canada and Mexico.

The Rainier cherry crop totaled 2.52 million, 15-pound boxes. The organic crop was 748,483, 20-pound boxes.

Northwest cherries were in the top three advertised fruits nationwide for seven weeks in a row, Thurlby said.

“We determine success based on demand. We had great quality and demand was strong from beginning to end,” he said, “It was the strongest demand we’ve seen in years.”



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