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.

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.

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.

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.”

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.”

 

Agriculture Struggles Unnecessarily, According to Steve Forbes

Forbes Chairman Has Suggestions to Help

By Jessica Theisman, Associate Editor

Water and labor are major agricultural issues in California. California Ag Today recently spoke with Steve Forbes, chairman and editor in chief of Forbes Media, about the topics.

“I think that the more people are realizing the enormous opportunities of technology in agriculture. They think that it is going to get better and better in the future,” Forbes said.Everything from reservoirs to desalination plants should be modeled after Israel. They have been building desalination plants because Israel is in a desert where they have been getting rainfall.

Steve Forbes

“This is a very sophisticated use of water in agriculture where they are a real global power,” Forbes said.

Today, Israel uses 10 percent less water as a whole, not per capita, than they did 70 years ago despite the economy being 60 times larger.

Forbes thinks labor is also an issue.

“We are hurting ourselves, our food production, not just in agriculture but construction as well,” he said.

Forbes said we should recycle the programs that we once had, programs where returning people come in for specific time periods for specific jobs. This would help prevent the illegal immigrant problem because workers know they can come back.

On another note, he discussed the current trade war that the U.S. is in with China.

“If you hear 10 percent tariff on aluminum, that’s a 10 percent sales tax; put it that way and people’s eyes go up and they get it right away,” Forbes said.

Putting sales taxes on American consumers, agriculture, farmers, and businesses is not the best way to resolve very real trade abuses.

“Everyone knows from the disaster and the depression of the 1930s what trade wars can lead to,” Forbes said.

Forbes also explained that GMOs greatly benefit producers and should not be attacked as harmful to consumers.

“GMOs have been studied fairly well, and they are making food more plentiful. It makes food a safer in terms that you don’t have to use as many pesticides,” he said. “GMOs make a better use of water, and there is a lot less loss to diseases and insects. We are using human ingenuity to make the human condition better.”

Increased Chinese Tariffs Could put California Producers in a Tight Spot

There is Fear China Could Turn to Other Countries For Ag Products

By Mikenzi Meyers, Associate Editor

The ongoing threat of Chinese tariffs on American agriculture has recently been the topic of conversation for agriculturalists. With China posing a possible 25 percent tariff on U.S. soybeans back in April, it seems this conversation is here to stay. The added tariff could drive Chinese buyers to choose other markets on many California commodities, including walnuts, tree fruit and beef.

Matt Lantz, vice president of global access for Bryant Christie Inc., deals with international trade, and these issues on a daily basis. Bryant Christie is an international affairs management firm that is based in Sacramento and Seattle, where they help U.S. commodity groups and agricultural companies with their international trade issues in order to export their products.

Lantz explained that this new threat is a major concern for California agriculture.

“China is an incredibly important market for California fruit and vegetable exploiters, and any tariff or increased inspection makes it more difficult to export,” he said.

Making matters worse, Lantz pointed out that buyers are going to turn to the countries without the tariff—which can be bad news for producers.

California Agriculture’s Future in the Hands of New Tariffs

There Is Worry that Some Companies May Lose Ground on Exports to China

By Mikenzie Meyers, Associate Editor

California growers are on edge due to newly imposed tariffs that could cause the state’s agriculture to suffer. After China recently retaliated against the United States’s steel and aluminum tariff by pushing its own on U.S. imports, they have good reason to be worried. California Ag Today recently spoke to Shannon Douglass, first vice president of the California Farm Bureau Federation, who is heavily involved in this conversation.tariffs

“No matter what you’re growing, so much of our products are exported, and so it’s a really vital concern to many of our farmers,” Douglass said.

She explained that it isn’t just a concern for those involved with fresh produce—which might be the first affected—but also any farmer who depends on sales to foreign markets.

One of the biggest concerns is losing the progress made in growing the foreign market, but Douglass seemed hopeful as CFBF has continued working with those driving legislation,

“We certainly don’t want to lose that ground that we worked so hard to develop,” she said.

Agriculture has always been a winner in the trade arena, and although the climate of foreign markets may be uneasy, Douglass and the California Farm Bureau Federation are continuing the conversation to make progress toward a hopeful future for all farmers.

Chinese Customers Hurt with Increased Tariff

Not Just California Farmers Hurt with Added Trade Tariff

By Patrick Cavanaugh, Editor

The extra tariff that China is putting on California agricultural products is an added frustration for the customers in China, said Jamie Johansson, President of the California Farm Bureau Federation.

“It’s not just the extra 15 percent being levied by that country. But for our nut crops and wine guys, we already have 15 or 20 percent tariffs,” Johansson explained. “This is nothing new to us in California. California agricultural products excel in the Pacific Rim. We know we can compete with anyone in a global market. We know that no one’s better than the California farmer in terms of serving the Pacific Rim nations, and no one can get their product to the market faster in those Asian countries than California.”

Jamie Johansson, CFBF

Customers are affected the most when tariffs are implemented.

“I say when we have these trade talks and trade negotiations—and even now China [is] threatening the trade tariffs or has current tariffs on California products—it isn’t just the farmers that suffer,” Johansson said.

“We need to remind China that it is their consumers who are demanding our quality milk, our cheeses, our wine, pistachios, and almonds as well. Their consumers will suffer just like the California farmer. And we need to remind them of that because we only sell to the countries with consumers who demand it, and that’s who decides what we grow and where we ship to,” Johansson said.

Additional Chinese Tariff on Ag is Disruptive

Growers Concerned Over Added Tariff into China

By Patrick Cavanaugh, Editor

Trade to China is so important to California, and for that reason, the 15 percent added Chinese tariff on ag products is devastating. It’s due to the retaliation of the Trump administration tariff, which he put on steel and aluminum exported by China.

Jeff Colombini with Lodi Farming Co.

It’s worrisome for growers such as Jeff Colombini, the president of Lodi Farming, with partners that grow cherries, apples, walnuts, and olives. He noted that apples and walnuts are an essential crop to China and he’s concerned.

“Trade is significant to the apple crop for California apples, but particularly for Washington state. Apples in Washington state is the largest producer of apples. They export greater than 25 percent of their crop,” Colombini said.

“Both China and Mexico take apple varieties that have fallen out of favor for U.S. consumers. So really, it’s a match made in heaven,” he said.

Colombini said growers have made decisions over the last 10 to 15 years on planting orchards based on these growing export markets.

“Then when the markets slam shut, what do we do with all this excess production/ This becomes disruptive to the markets … not to mention it significantly affects the farmer’s bottom line,” he explained.

Colombini said apples require a lot of labor—a big economic boost to many communities—and disruption in getting that crop to China is not good.

There’s a lot of people employed in the apple industry throughout the United States, and so a trade war can have a significant impact on many thousands of families.

Colombini said it took many years to get that China market open, and when it finally got opened in 2015, it has grown to be their sixth largest export market.

“Similarly, the export disruptions for walnuts is extremely concerning to that industry,” he said.