Secretary Ross Signs Landmark Trade Agreement

CDFA Secretary Karen Ross signed a cooperative trade agreement with officials from the Secretariat of Agriculture, Livestock, Rural Development, Fisheries and Food (SAGARPA) in Mexico City. This agreement is a follow-up to the Governor’s Trade Mission that occurred earlier this year.

The trade agreement includes a number of trade priorities that address such diverse issues as cross-border trade delays, technical dialogue related to beef and organic trade, agricultural cooperative extension outreach, and climate change collaboration.

SAGARPA Mexico

“Mexico is a vital partner for California agriculture,” said Secretary Ross. “Further collaboration between our countries will enhance the opportunities within the agricultural sector for farmers and ranchers in both of our nations.”

The agreement follows months of dialogue between CDFA and SAGARPA that culminated in a meeting between Secretary Ross and Secretary Enrique Martinez at the Produce Marketing Association trade show in Anaheim at the end of October.

California is the largest agricultural producer and exporter in the nation, with more than $18 billion in food and agricultural exports. Mexico is California’s fifth largest export destination valued at $888 million. Over the last ten years, agricultural exports to Mexico have increased three-fold.

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Californian kiwifruit industry forecasts good fruit quality

Source: Fresh Fruit Portal

The upcoming season looks as though it should be a relatively positive one for Californian kiwifruit growers, with normal production, good fruit quality, and strong domestic market conditions.

California Kiwifruit Administrative Committee assistant director Nick Matteis said that as of the board’s latest meeting in July, the industry was anticipating a production of around 6.8 – 7 million seven-pound tray equivalents.

“That’s about average, based on producing acreage and what our growers are able to get produced per acre. It’s about a normal size crop, and the distribution of sizes will be pretty normal as well,” Matteis told www.freshfruitportal.com.

“It’s not lopsided towards larger sizes necessarily nor smaller sizes – there should be a good variation in size profile. The quality looks to be good as well, though at this juncture of course we still have a month and a half of growing season left.”

The board of directors will hold another meeting in September to take one last look at the estimates and see if anything dramatic has occurred.

Matteis said although it didn’t sound like growers have had serious problems with the state-wide drought, he could not be sure due to the vast area they covered.

“It’s hard to generalize how people are going to be affected because we have growing regions closer to the northern area and some further to the south with a couple of hundred miles in between,” he said.

“Most folks are pumping groundwater because there’s zero allocation from the state and federal water resources departments.

“So I think everybody’s going to make it just fine this year – I guess I could summate – but there is some pretty significant groundwater pumping that’s going on now to keep flows where they need to be to get to harvest.”

He added demand looked like it would be strong going into the season, with the first harvest expected to take place around six or seven days earlier than last year.

“Probably at the end of September we’ll start seeing some of the first fruit harvested, but the harvest being in full swing is usually around the first or second week of October,” Matteis said.

“The actual harvest will go till the end of November and then the marketing season will run from October all the way to April.”

Generally around 70-75% of the fruit is sold to the North America market, with Canada and Mexico being the two biggest importers.

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US rice farmers see opportunity in China – from the Los Angeles Times

By David Pierson

Gregg Yielding was given a quixotic task: travel to China and determine if consumers there would be willing to eat American rice.

So he set up tables at some of the most popular supermarkets in southern China, hung American flags and began dishing out steamy samples of rice from Arkansas and California.

“At first they’d say, ‘There’s rice in the U.S.?” said Yielding, head of emerging markets for the U.S. Rice Producers Assn., a Houston-based trade group. “And we’d have to show them a map to explain that it’s grown in California and the South. Then they’d try it, and they would really like it.”

Chinese importers, distributors and grocery chains lined up. Selling U.S. rice to China seemed like a slam-dunk. But eight years after Yielding’s first venture on behalf of the U.S. industry, not a single shipment of American rice has officially made it into Chinese hands.

That won’t happen until the two countries agree on a so-called phytosanitary protocol, which determines the necessary steps U.S. rice exporters must take to mitigate pests such as insects. The disagreement highlights the growing pressure on U.S. agricultural producers to either accommodate China or risk being shut out of the world’s largest emerging consumer market.

That might not have mattered a decade ago when U.S. farmers could rely on domestic buyers or traditional foreign markets such as Mexico and Canada. Today, China’s swelling appetite for food is touching agribusiness everywhere and forcing companies to choose whether to adapt.

Those that comply are seeing dividends. American agricultural exports to China rose to a record $25.8 billion last year from $5 billion a decade earlier.

Until a few years ago, no one would have considered exporting much rice to China, the world’s largest producer and consumer of the grain.

Tim Johnson, president and chief executive of the California Rice Commission, called it “the ultimate example of selling ice to the Eskimos.”

But starting in 2012, China went on a spree, scooping up millions of tons of the grain from countries such as Vietnam, Pakistan and India. China is now on pace to import a record 3.4 million tons of rice this year — six times more than it did in 2011, according to the U.S. Department of Agriculture.

Other industries remain shut out. The U.S. beef industry is still trying to overturn a 2003 ban on American cattle over mad cow disease. Starting late last year, nearly a million tons of U.S. corn have been rejected at Chinese ports because of inclusion of an unapproved genetically modified strain. And some American pork imports were halted this month over fears they contained traces of ractopamine.

“Demand is growing so quickly in China for so many food products — and with so many places to get them from — China can pick and choose,” said Jim Harkness, a senior advisor on China for the Institute of Agriculture and Trade Policy in Minneapolis. “From a U.S. perspective, it looks like the Chinese are being picky and erecting non-tariff barriers for political reasons. But I think from the Chinese perspective, the U.S. is an outlier in some cases. Ractopamine is banned in over 100 countries.”

In addition to China, the European Union and Russia also ban the additive. It’s deemed a risk to people with cardiovascular problems.

While other products struggle to win access, the U.S. rice growers are hopeful that officials in Washington and Beijing can come to terms as early as next year. If they do, analysts estimate, U.S. rice exports to China could reach several hundred million dollars a year. That would make China a top buyer of the American grain, on par with Mexico and Japan.

Though it produces only 2% of the world’s rice, the U.S. accounts for nearly 10% of the rice traded globally — enough to make it the fifth-biggest exporter. About half the rice grown in the U.S. ends up abroad. Still, rice consumption in China is so high the country could eat through America’s annual production in 17 days.

The growing Chinese appetite for imported rice may partly reflect surging food demand, analysts said. But it’s mostly driven by arbitrage, as government policies have kept domestic rice prices high to protect Chinese farmers. Rice mills in China decided it was cheaper to buy foreign supplies.

American rice producers can’t meet that sort of mass demand — nor do they want to. Their interest is in selling packaged rice to China to fill a high-end niche. The rice producers association’s survey of Chinese consumers buttressed that idea. Despite the concerns of Chinese regulators, shoppers in China overwhelmingly perceived U.S. rice as a safe alternative in a country hit by myriad food safety scandals.

Josh Sheppard, a fourth-generation rice grower in Biggs, Calif., about 60 miles north of Sacramento, said he’d welcome Chinese buyers because they probably would pay more for his grains than U.S. customers — much the way Japanese buyers currently do. That’s especially important now when drought has cut rice acreage in the state by 25%.

The cooperative is managed by Stuart Hoetger, co-founder of Stogan Group, an agricultural consulting firm in Chico, Calif.  Hoetger has arranged a partnership between the rice growers and Chinese food and agriculture conglomerate Wufeng.

Medium grain rice known as Calrose grown by the cooperative is being shipped in limited quantities to Chinese ports, where Wufeng is redirecting it to customers in small markets such as the Solomon Islands, the idea being Hoetger and his growers will be ready to ship to China shortly after a trade agreement is finalized.

“If China asks for something, you do it,” Hoetger said. “You ask any farmer that’s sold to China in the last few years and they’ll tell you they’ve made a lot of money.”

 

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USDA Reopens Chinese Market Access for California Citrus

Source: CDFA

Agriculture Secretary Tom Vilsack announced that California citrus farmers will be able to resume exports to China this season. California citrus exports are valued at $30 million annually.

“Resuming trade before the start of the 2014 citrus shipping season is the result of a lot of effort by a number of USDA employees, who worked very closely with their foreign counterparts to resolve China’s concerns,” said Vilsack. “Their extra effort means California citrus growers can once again ship to this important market.”

A series of scientific exchanges between the USDA’s Animal and Plant Health Inspection Service (APHIS) and China’s General Administration of Quality Supervision, Inspection, and Quarantine (AQSIQ) resulted in an agreement for California citrus to again be exported to China.  APHIS and USDA’s Foreign Agricultural Service worked closely with the U.S. citrus industry to ensure the successful outcome.

In April 2013, California-origin citrus was suspended from entering the Chinese market due to interceptions of brown rot (Phytophthora syringae), a soil fungus that affects stored fruit.  Over the next year, USDA worked with China to address China’s plant health concerns and reopen the market for California citrus exports.

Noting the importance of the Chinese market for U.S. citrus producers, Secretary Vilsack raised the issue with Chinese officials during the U.S.-China Joint Commission on Commerce and Trade in December 2013.  In April 2014, APHIS and AQSIQ officials met to discuss a proposed work plan that included protocols to effectively reduce the pest risk on citrus product shipped to China.  As a result of these discussions, U.S. and China officials finalized an agreement to resume exports on Aug. 3, 2014.

The Obama Administration, with Secretary Vilsack’s leadership, has significantly expanded export opportunities and reduced barriers to trade, helping to push agricultural exports to record levels.  U.S. agriculture is experiencing its best period in history thanks to the productivity, resiliency, and resourcefulness of our producers and agribusinesses.

Today, net farm income is at record levels while debt has been halved since the 1980s.  Overall, American agriculture supports one in 12 jobs in the United States and provides American consumers with 83 percent of the food we consume, while maintaining affordability and choice. Strong agricultural exports contribute to a positive U.S. trade balance, create jobs, boost economic growth and support President Obama’s National Export Initiative goal of doubling all U.S. exports by the end of 2014.

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China re-opens market to California citrus

Source: FreshFruitPortal.com

Industry sources have told www.freshfruitportal.com that China has officially granted access to California citrus after a 15-month absence.

California Citrus Mutual vice president Bob Blakely said he received official notification from the U.S. Animal and Plant Health Inspection Service (APHIS) Friday, and was very pleased the sector could regain what was its third-largest market until April, 2013.

“There was a delegation that came over and visited the California industry in the first week of July, to see what our industry was doing to satisfy their concerns, and in those meetings the language [of a protocol] was discussed and further refined, and agreements were made in principle,” Blakely said, adding the main concern was phytophthora root rot.

“Originally they were looking to have additional sampling or something done that wasn’t practical, because it would not have mitigated the problem.

“Once they came here and saw how our fruit was produced and the conditions in the field, they realized that some of those things they put in there weren’t clear in their understanding, and that wasn’t necessary.”

He said clearer language was then put in place about how growers wishing to export ought to manage trees and the harvest to make sure the disease was not present in China-bound fruit.

After these agreements were agreed, he highlighted “the way was clear” for a market re-opening and official documents were signed in the last week of July.

The executive added the first fruit would likely be sent in December, following the Navel harvest which kicks off in November.

California Citrus Quality Council president Jim Cranney also mentioned the main export season would start in the fall or winter, but there would be some volumes of Valencia oranges and lemons ready to go now if shippers wished to exploit the newfound option.

“The market has been re-opened effective yesterday, and we’re very pleased to see this after such a long time out of the market, and that we’ll be able to send citrus again,” Cranney said.

“We’re looking forward to getting back a normal pace of trade with China.”

He said it was necessary to recognize the positive efforts from APHIS and China’s General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ).

“It’s important to emphasize the job APHIS did by being proactive and how they worked together with the authorities from China, their partners at AQSIQ.

“It’s also important to recognize that AQSIQ did a good job in assessing the technical package we sent and we’re very happy that we meet their expectations.”

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U.S. Chicken Farmers Brace for Russia’s Retaliation to Sanctions

Source: Reuters; The Moscow Times

Russia’s threatened ban on U.S. poultry imports, the latest move in a sanctions skirmish over Moscow’s support of rebels in Ukraine, has agriculture companies alert to the risks of a conflict that’s already roiled trading of crops ranging from soy, beef and fruit to California pistachios.

Moscow has struck back against trade sanctions following the downing of a Malaysian jetliner last month by imposing food restrictions, and would add U.S. chickens to Ukrainian soy and other products Russia has blocked since it seized Crimea earlier this year: Australian beef, Latvian and Lithuanian pork, Moldovan fruit and Ukrainian juice.

Russia’s move to limit agricultural trade is seen as a sign the conflict with Washington is heating up. Russia imported about $1.3 billion in U.S. food and agricultural products last year, or about 11 percent of all U.S. exports to the country, according to U.S. Census data.

U.S. pistachio farmers have seen sales to Russia, the seventh largest export market, cut nearly in half this year because political tensions have made Russian importers hesitant to make purchases, said Peter Vlazakis, export market coordinator for the American Pistachio Growers.

Pistachio exporters have “a legitimate fear” about the potential for trade disruptions, Vlazakis said.

Russians may turn for pistachios to Iran, the world’s second largest producer after the United States.

An armed group last month occupied a Cargill sunflower-seed crushing plant in eastern Ukraine, a region supportive of the Putin government, and commodity trader Glencore is expected to have a hard time selling grain silos in the country.

Last week, the farm sector’s attention turned to poultry after Russia’s Federal Veterinary and Phytosanitary Inspection Service said it found signs of the antibiotic tracycline in four shipments of U.S. poultry. The service could not be reached for comment.

The food safety watchdog’s threat to ban U.S. poultry imports, reported in government-controlled Russian media, came days after fresh U.S. and EU sanctions over Russia’s support of rebels in Ukraine.

Russia is the second largest importer of U.S. broiler meat behind Mexico, buying 276,100 tons last year, or 8 percent of U.S. exports, according to the U.S. Department of Agriculture. Russia’s purchases from January through May 2014 represented 7 percent of U.S. exports.

U.S. poultry exporters and producers said there were no problems with the meat. For some, the situation was hardly their first time dealing with trade troubles with Russia.

Russia has repeatedly been accused by the West of using food safety concerns and its veterinary service as instruments to ban supplies from countries with which it has strained relations or to protect its own industry. Explicitly banning a country’s products for political reasons would violate World Trade Organization rules.

Trade restrictions in prior years have caused some companies to back away from deals with Russian importers, said Jim Sumner, president of the USA Poultry & Egg Export Council.

The council has advised poultry companies to keep in contact with Russian importers so they will get early warnings should Moscow impose a ban.

For Russian President Vladimir Putin, targeting agricultural imports could be a low-cost way to retaliate against U.S. sanctions over Ukraine.

Other threats, especially any involving Russia’s export of oil and gas shipments, likely would bring additional sanctions on Moscow, said Robert Kahn, a senior fellow for international economics at the Council on Foreign Relations.

Russian sanctions on farm products would be “quite painful” for the companies affected, although the macroeconomic effects on the U.S. economy would be small, he added.

“These are fully political decisions,” Kahn said.

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California and Mexico – a win-win relationship

By: Karen Ross, California Agriculture Secretary

It speaks volumes that during our meetings in Mexico, the notion of “ganar-ganar,” or a “win-win” relationship was mentioned more than once. Our discussions have focused not only on building stronger trade relationships between our two markets, but in also in capitalizing on the shared resources of our people, climate and economy. A strong and growing Mexican market is a win for California and a win for Mexico.

In our meeting with Mexico’s Ministry of Agriculture, Livestock, Rural Development, Fisheries and Food  we discussed the great opportunities for cooperation between our two markets that can have long lasting benefits for both of our economies. Working collaboratively to solve cross-border trade delays that impact businesses on both sides of the border is an issue that can be resolved. Further, we wish to explore opportunities that jointly leverage our resources and production capacity.

We can no longer consider a California/Mexico divide. We need to see how cooperation can benefit us both in the long-run. I’ve committed to SAGARPA that within the next 60 days we will have progress in moving forward with a collaborative relationship that involves the public and business sectors finding solutions to cross-border issues that benefit both markets and producers.

Following our meetings with SAGARPA we had the pleasure of meeting with Walmart Mexico and Central America. The company also stressed cooperation and a “win-win” relationship that California and Mexico can share.

In celebrating the successes of the 20th Anniversary of the North American Free Trade Agreement (NAFTA), we should also celebrate the ongoing trade benefits of this relationship. Demonstrating this success, Walmart shared that their imports of U.S. produce has increased more than 10 percent each year for the last three years. This underscores that Mexico’s economy is growing and California is benefiting.

I look forward to furthering our trade relationship and cooperation with Mexico. It can be a “win-win” relationship like no other.

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Governor Brown to Lead Trade and Investment Mission to Mexico Next Week

California Governor Edmund G. Brown Jr. will travel to Mexico City next week to meet with Mexican government and business leaders, help boost bilateral trade and investment opportunities between the two neighbors and expand environmental and economic cooperation.

Governor Brown also announced today that he has invited Mexican President Enrique Peña Nieto to meet later this year in California to build on the partnership forged during the trade mission. Ahead of the trip, Governor Brown will meet with Mexico’s Secretary of Foreign Affairs José Antonio Meade Kuribreña in Sacramento today.

The Governor will be joined on the Trade and Investment Mission to Mexico by a delegation of state legislators and senior administration officials (including CDFA Secretary Karen Ross). A delegation organized by the California Chamber of Commerce with the help of the California Foundation for Commerce and Education that includes approximately 90 business, economic development, investment and policy leaders from throughout California will also participate in the trade mission.

The Governor first announced the Trade and Investment Mission to Mexico in his 2014 State of the State address and met with Mexican Consuls General from cities across California in March.

The trip follows Governor Brown’s 2013 Trade and Investment Mission to China. Over the past year, Governor Brown has also signed accords with leaders from Canada, Israel and Peru to combat climate change, strengthen California’s economic ties and expand cooperation on promising research.

In February, Governor Brown established the California International Trade and Investment Advisory Council to help expand international business opportunities for California companies and appointed former U.S. Ambassador to Hungary Eleni Kounalakis as chair.

A preliminary itinerary of trade mission meetings and events is below. All events, times and locations are subject to change and require RSVPs from in-country reporters. Please note that all times are local, and unless specified, represent start times for events and meetings. Allow for ample check-in time. Updates to the itinerary will be reflected in the online media advisory at: www.gov.ca.gov.

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