Tarriffs

Generic Pistachio Marketing Has Big Value

Analysis: Export Markets Shows Nearly $3 billion Post-Tariff Shipment Increase Resulting From U.S. Pistachio Industry’s Generic Program.

American Pistachio Growers’ (APG) efforts to reduce or eliminate trade barriers in several key overseas markets have been a significant boon to pistachio exports and to growers’ bottom-line. A new study, “An Analysis of the Effects of the American Pistachio Growers’ Program to Reduce/Eliminate Tariffs on U.S. Pistachios,” has quantified, for the first time, the direct benefit to the U.S. pistachio industry from APG’s strategic program to vanquish trade barriers.

The analysis from Dr. Dennis H. Tootelian, an emeritus Professor of Marketing, sought to determine what shipments of U.S. pistachios would have been if tariffs had not been lowered or eliminated in Israel, Mexico, China and Hong Kong, and the European Union which are the export markets prioritized for focus by APG. Many of his analyses centered on the period from 2009 through 2017 — the period in which tariffs were reduced in all five geographic areas.

Tootelian’s study showed that actual shipments of U.S. pistachios after the tariffs were reduced or eliminated for each export market were more than 2.3 billion pounds greater than what would have been expected had the tariffs remained in place. Equated in economic terms, the boost in export volume after the trade barriers had been removed amounted to nearly $3 billion greater value than what would have been expected had the tariffs remained in effect.

While Tootelian did not have any prior expectations of what his study would show, he was surprised by the findings.

“To see this kind of an increase in shipments on a before and after basis with the tariffs did surprise me. I did not expect this kind of result in the marketplace. These are not small numbers,” Tootelian said.   “What the data tell me is that there is latent demand for U.S. pistachios and once the tariffs come down, foreign markets want to buy them.”

Tootelian said the projected economic boon to U.S. growers is even more profound if the fluctuations in prices in China and Hong Kong were eliminated from the analysis.

“If you take the price fluctuations in China and Hong Kong out, the increase in value of pistachio shipments amounts to nearly $355 million more dollars per year — nearly $4.5 billion in total from the time when tariffs were in effect to after they were reduced or eliminated,” said Tootelian.

Data from the analysis estimated that more than 1.7 billion pounds of U.S. pistachios in total, or an average of more than 192 million pounds annually, may  have gone into storage if they were not diverted to other markets. While the effect of the projected added supply on the world market is unknown in terms of lower prices, Tootelian said that it would surely have had a detrimental impact on U.S. growers.

“It is unknown what that would have done to the price,” he said. “In order to divert from storage and into other markets, prices probably would have had to come down considerably and whether they would have been able to market that much supply is an unknown.”

Underlying Tootelian’s analysis is the fact that price is not the sole determinant of the volume of U.S. pistachio exports. He said when tariffs are lowered or eliminated, traditional economics would dictate that increased shipments would lead to lower prices, but his data show demand for U.S. pistachios in some key markets remained high in the post-tariff era.  Several factors, he said, appear to be in play.

“One is the reputation of U.S. pistachios, which carries a very positive market image with consumers and importers. Second, it could be the quality of the product is better or more consistent, or both, for what consumers can buy from other countries,” said Tootelian. “And third, there are a lot of reputable health studies that show nuts are healthy and nutritious.  APG has invested considerable resources raising consumer awareness of the healthful attributes of pistachios, and consumers appear to be willing to pay a higher price. That is pretty clear from the data.”

APG has aggressively worked in the halls of Congress, with U.S. trade officials and with foreign governmental bodies to alleviate burdensome trade barriers and create a more open market for U.S-grown pistachios.

“Quantifying the value of APG’s efforts to growers has been difficult up to now, but this new study gives us some tangible answers to the importance of the work we are doing on behalf of the U.S. pistachio industry,” said Richard Matoian, APG’s executive director. “Frankly, we were quite surprised at the magnitude of these numbers.  It’s our strong belief that whenever and wherever trade barriers exist to the free flow of American-grown pistachios around the world, we will confront them vigorously.”

In a postscript to his analysis, Tootelian added, “If I were a grower, I would be encouraging APG to be doing this more in other markets because the greater the demand there is for the product, the less goes into storage and that helps boost the price.”

2019-08-10T09:33:07-07:00August 10th, 2019|

Rep. Josh Harder: Trade War With India Must End for Almond Industry

India is Top Export Destination for Almonds, Worth $650 Million Annually

News Release

Representative Josh Harder (CA-10) released the following statement after India imposed retaliatory tariffs up to 70 percent on American products, including almonds. Rep. Harder’s district is one of the largest producers of almonds in the country, and India is the top export destination for the product.

Josh Harder

Josh Harder

“This trade war has to end. The president is shooting from the hip on his trade policy and it’s Central Valley almond farmers that are left holding the bag. India is our top export partner and we just can’t afford to take this hit. I’m going to continue pushing the administration and the USDA to stop this devastating cycle of retaliatory tariffs. We need to be supporting our farmers, not cutting off our markets and depressing our economy.”

According to the United States Department of Agriculture (USDA), the United States exported over $650 million worth of almonds to India in 2018.

 

 

2019-06-18T20:59:02-07:00June 18th, 2019|

Almond Growers Helped In Trade Dispute

Almond Grower and Board Chair Holly King Attends White House Briefing with President

News Release

U.S. Secretary of Agriculture Sonny Perdue announced almonds will be included in the administration’s new trade mitigation package. This package aims to continue the support of farmers and ranchers impacted by delayed negotiations and trade disruption with China.

Almond Board Chair Holly A. King attended a briefing at the White House recently with President Donald J. Trump and representatives from other major farm groups to discuss the trade mitigation package.trade

“It is an honor to represent the California almond industry at the White House briefing with President Trump and express appreciation for his efforts to ease the burden of the trade tariffs on California almond growers,” King said. “We have invested heavily in developing the market for California almonds in China for more than 20 years and hope the Administration is successful in negotiating a new trade deal soon so we can get back to business as usual.”

The $16 billion package includes $14.5 billion for the Market Facilitation Program, $1.4 billion in surplus commodity purchases through the Food Purchase and Distribution Program and $100 million in Agricultural Trade Promotion funding. Almonds will be included in the Marketing Facilitation Program. According to the USDA release, “Tree nut producers, fresh sweet cherry producers, cranberry producers and fresh grape producers will receive a payment based on 2019 acres of production.”

The Almond Board has worked closely with the Almond Alliance of California throughout the developing tariff situation to ensure the voice of the California almond industry is heard.

“The Almond Board and Almond Alliance have been actively engaged with USDA, the US Trade Representative and Congress regarding the impact of this trade disruption on almonds. The Alliance has led efforts ensuring almonds are included in the second mitigation package,” said Julie Adams, Vice President of Global, Technical and Regulatory Affairs at the Almond Board. “We look forward to working with USDA in leveraging these funds to best benefit the entire almond industry and our grower communities.”

Overall, trade disputes have underscored the importance of having diverse, healthy export markets, a position of strength that the California almond industry has long enjoyed. For decades, ABC has supported the industry by making significant investments in foreign market development and expansion. Recently, the Almond Board started marketing programs in Italy, Mexico, Germany and re-entered Japan. ABC also ramped up marketing activity in Germany and India. 

“While we appreciate almonds’ inclusion in the second package, almonds continue to be impacted by the increase in tariffs, and we’ve seen a significant decline in shipments to China, our third-largest export market,” said Adams. “Getting back to normal trade is critical.”

2019-06-03T16:53:20-07:00June 3rd, 2019|

Almond Alliance Helps Growers with Advocacy

Almond Alliance Lent a Hand on Tariff Relief

By Jessica Theisman, Associate Editor

Like many agricultural sectors, almond growers have also been affected by recent tariff wars. However, almond growers have a true friend in the Modesto-based Almond Alliance.

“We are definitely an advocacy organization, that is the core of what we do,” said Elaine Trevino, president of the Almond Alliance.

Elaine Trevino

“The Almond Alliance educates our legislators, their department officials and cabinet about issues that are important to the almond industry. It is very critical that our elected officials, specifically the urban [ones] that are not familiar with agriculture, understand agriculture. They need to understand … the inputs and the natural resources needed for agriculture, and also understand the best practices that we put into place to be good corporate and small businesses,” Trevino said.

“Obviously with almonds, you have hulls and shells and the biomass that comes with almonds, and so we focus on all aspects of that,” she explained.

Almond growers are being affected by tariffs increases into China. Beginning on April 2nd, the first 232 retaliatory tariffs was seen that affected China. Since then, our turkey has also been affected by the tariffs.

The almond industry exports 67 percent of its production to more than 100 countries.

“Looking at export markets and how they impact the industry is critical. Secretary Purdue came out with the mitigation package,” Trevino said.

The almond industry fought very hard to be included in direct payments. While many say it’s just three cents a pound, the allocation to almonds was $63.3 million.

“It’s our intention that the alliance fight for every penny of that goes back to the growers, and if they are not eligible for the direct payments, then we’ll make sure that they receive it through market promotion that will help move their product and hopefully get those prices back up if they haven’t been affected,” Trevino said.

2018-12-18T15:07:08-08:00December 18th, 2018|

USDA Purchases More Than $10 Million in California Table Grapes

Food Banks, Other Food Programs to Get Grapes as Part of Tariff Mitigation Program

New Release Edited By Patrick Cavanaugh

The United States Department of Agriculture (USDA) recently completed a purchase of more than 450,000 boxes of California table grapes as part of its tariff mitigation program.

California table grapes were included in the USDA Food Purchasing Program for the first time as part of the mitigation program because of the 53 percent tariff imposed on U.S. grapes by China.CA Table Grapes

According to the most recent USDA data, shipments of California grapes to China are down 42.2 percent in volume and 41.2 percent in value in 2018 compared to 2017.

“The 2018 season has been a tough one for table grape growers,” said Kathleen Nave, president of the California Table Grape Commission. “The tariffs on table grapes have been painful, but the real harm has been caused by the fact that tariffs on multiple competing commodities, such as cherries, stone fruits, and apples, caused more fruit of all kinds to be sold in the domestic market. The USDA purchasing program comes at a good time for table grape growers and is appreciated.”

Table grape suppliers interested in participating in the food purchasing program had to go through a rigorous process to become a USDA vendor and then if approved, submit bids in a competitive process. Multiple Valley companies were awarded the opportunity to supply California grapes to customers across the country.

The grapes will be distributed to food banks and other food programs around the country, starting in December.

2018-12-07T15:46:23-08:00December 7th, 2018|

Almond Export Diversification Helps During Tariff War

Overseas Markets are Vast for Almond Industry

By Patrick Cavanaugh, Editor

Diversification is a strength, Richard Waycott, president of the Almond Board of California, told California Ag Today recently. The Almond Board of California is a nonprofit organization that administers a grower enacted federal marketing order under the supervision of the U.S. Department of Agriculture. When it comes to any losses due to a tariff war in China, the almonds can be redirected to other countries.

“It’s fortunate to be as diversified as we are. Always a strength of this industry is the diversification of our overseas markets,” Waycott said. “I think whatever volume we ultimately do lose—if we do lose volume to China—can be redirected and absorbed by other markets.”

The USDA has opened up a direct payment program to the almond industry if growers were to lose any money in a tariff war.

As those programs were announced, by far the largest piece of the pie, $6 billion, initially was directed to the soybean and corn growers and livestock, while the specialty crops were completely left out of it.

“We got together with the Almond Alliance of California and some of our industry members made a very concerted effort while there was still time to do so before the rules around these programs and those that got to participate were set in stone and were able to convince the powers that be … to open up to the direct payment program to almonds, and the sweet cherry industry did the same,” Waycott explained

Waycott also commented on the epic frost that hit almonds this past spring. And he is not sure of the impact on the crop.

“We realized that we don’t understand the impact of frost on almonds all that well because we saw one side of the street there was quite a bit of damage, while on the other side there was no damage. So I think there’s mother nature at work here that, you know, we don’t necessarily completely understand,” Waycott said.

2018-10-23T14:57:40-07:00October 23rd, 2018|

California Walnuts Face Threatening Tariffs

Big Challenges For the Walnut Industry

By Mikenzi Meyers, Associate Editor

It takes one glance at current news headlines to know that agriculture trade is a hot-button issue within the industry. Amongst countless exported crops being hindered by tariffs, the California walnut industry is no different. With California English walnuts making up two-thirds of the world’s trade, the California Walnut Commission is on high alert to ensure that growers are protected from tariffs that could damage their markets.

Pamela Graviet, the commission’s senior marketing director, spoke deeper on this issue.

Pam Graviet

“If you look at the three major markets—China, Turkey, and India—where we have tariff issues,” Graviet said, “that represents twenty percent of our total shipments … it’s over $300 million we’re going to lose.”

Thus far, the walnut industry has avoided paying the full tariff direct to China through the “gray market,” or the sales of walnuts through other countries that feed into China.

“But when you’re tariff constrained or in a trade war” Graviet explained, “they are also cracking down on those other routes, and the gray market has also suffered.”

The California Walnut Commission will continue their work to protect nearly 100 handlers and 4,800+ growers that make up the California walnut industry.

2018-10-11T14:42:10-07:00October 11th, 2018|

Calmer Minds Must Prevail for Trade Talks

California Growers in a World Market

By Patrick Cavanaugh, Editor

Paul Wenger, a Stanislaus County almond and walnut grower told California Ag Today recently  that California growers have often suffered with tariffs. “The proposed trade agreements such as TTIP and TPP along with NAFTA would have helped solve tariff problems,” he said. “But TTIP and TPP are gone.”

“The Trump administration may try to negotiate a bilateral agreement with other countries, and he seems to be working on NAFTA with Mexico,” noted Wenger, who is also the past president of the California Farm Bureau Federation.

At the end of the day, Wenger hopes that calmer minds will persevere and we’ll see these trade negotiations get done and we’ll move forward.

“Because we are in a world market,” Wenger explained. “As much as President Trump puts tariffs on steel and aluminum … saying that we’re going to bring back our rust belt, well, we’re not, because it’s not the market that has killed the steel industry, it has been the regulations. Our steel industry can’t produce at a level that people are willing to pay.”

There are a lot of crops that can only be grown in a Mediterranean climate. There are only five Mediterranean climates in the world; California is one of them and the largest producer of specialty crops.

The central part of Chile can produce a lot of the crops that we have today. But other than that, it’s the south tip of Australia and South Africa and the Mediterranean region itself.

“When you really think about who can produce, as long as we have the water, not only do we have to worry about marketing our product, we have to also fight for our water so we can produce those crops. And long-term, people are going to find a path to California for the crops that we grow here,” Wenger said.

2018-09-11T15:59:43-07:00September 11th, 2018|

Lessening Negative Feelings Over Trade War

Walnut Processors Maintain Optimism

By Patrick Cavanaugh, Editor

California Ag Today recently spoke with Paul Wenger, past president of the California Farm Bureau Federation. He farms 700 acres of almonds and walnuts in Stanislaus County. He said that California Farmers and other stakeholders of the industry need to be less negative about the current trade war with China.

Almond and Walnut Grower Paul Wenger

“The more we talk negatively, the more that negative things are going to happen,” he said. “As I talked to walnut processors. They’re optimistic. That’s good news. I’ve talked to some walnut processors and said, ‘Well, what’s going to happen this year?’ We shouldn’t expect much as far as prices.”

“Marketing is always a self-fulfilling prophecy and it’s more psychology than it is anything,” Wenger said. “We are one of the largest producers now. Certainly, China is the largest producer. But China had a terrible crop and so they need walnuts, and so strange things can happen and the Chinese are always one that can bend the rules when they need.”

“We know that’s why President Trump has been going after China supposedly over some of these intellectual properties. Certainly, those aren’t the things that hurt agriculture, but we in agriculture are paying the price as we look at these countervailing tariffs that are coming on,” Wenger said.

Wenger explained that the Chinese know that, throughout the Midwest, it was the farm vote that helped and the rural states that helped bring home a victory for the president, so they’re going to go after President Trump.

A large amount of product was sold last season at a low price.

“We just go through the Affordable Care Act and then the port slowdown on the 2015 crop, which went into the 2016 crop, which was a little better We got a little bit better than 2017 crop was a good year for us,” Wenger said. ‘So you’re looking at a pretty good ’18 and now this happens.”

2018-09-04T13:42:28-07:00September 4th, 2018|

Tariffs Causing Problems for U.S. Trade

Long-Term Problems May Be Ahead

By Jessica Theisman, Associate Editor

If a market is lost, it takes time to get it back. California Ag Today recently spoke with Brian Kuehl, executive director of Farmers for Free Trade, about the topic. A concern is that competitors are entering the markets that we currently occupy.

“No farmers invest huge amounts of time and energy trying to open markets or trying to develop trade relationships, and they’re being torn up in a matter of months,” Kuehl said.

Tariffs will cause long-term problems. One major issue is that when tariffs are established, other countries will begin put to put tariffs on our food. Those countries then begin to plant more crops to adjust. Soon, those countries become their own producers instead of relying on the U.S. Those countries then look to other countries that are more dependable, which in turn becomes a competitor to the United States.

The renewal of NAFTA will help.

“If this is not resolved soon, we certainly are doing lasting damage to agriculture. It could trigger the next farm crisis,” Kuehl said.

It looks like the U.S. is moving toward a deal with Mexico on a renewal of NAFTA.

“Hopefully that would quickly lead to a deal with Canada,” Kuehl explained. Mexico and Canada are our biggest trading partners.

For many of our products, China is one our largest trading partners, and certainly one of the ones that is growing the fastest in terms of population.

“We do not want to squeeze ourselves out of the Chinese market for a decade to come; that that would be a colossal error,” Kuehl said.

The U.S. has routed products in the past. Some countries including Vietnam and Hong Kong route products into China.

“There might be a tariff on product going into China directly, but we know some of our growers are able to avoid the product that tariff by selling first to Vietnam and then Vietnam shifts into China,” Kuehl said. That same tactic with Hong Kong is being shut down. China is getting much smarter at saying you can not circumvent our tariff, so we are going to hold you to these tariff rates.”

 

2018-08-24T17:05:06-07:00August 24th, 2018|
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