India is Top Export Destination for Almonds, Worth $650 Million Annually
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.
“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.
Almond Grower and Board Chair Holly King Attends White House Briefing with President
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.
“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 Programand $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.”
California Exported $20 Billion in Food Products in 2016
By Mikenzi Meyers, Associate Editor
It’s no secret that California’s agricultural exports are a huge part of the state’s economy—but to put it in perspective, over $20 billion worth of food and agricultural products were exported in 2016 alone (the latest figures). With numbers like these, people like Glen Roberts of the U.S. Department of Commerce and International Trade Administration are kept busy.
Roberts, who is part of the Global Markets sector and based in Fresno, not only works with what he calls “easy” exports like Mexico and Canada, but other places across the globe, shipping anything and everything from food to machinery.
When it comes to his role in California, Roberts explained, “Our office covers from the top of the Grapevine, Kern County, all the way up to Stanislaus County from San Louis Obispo over to Nevada.”
His sector, which handles more of the commercial side of things, acts as a gateway to other government programs that help out with international trade.
Although Roberts’ main focus is commercial, he’s still one of the go-to guys in agriculture exports.
“What happened when the almond prices dropped? I got the calls because Foreign Ag Service doesn’t handle contractual disputes,” he said.
Roberts further added, “I had to help out our local almond growers because the buyers didn’t want to pay the higher contracted price. They wanted to buy the new lower market price.”
American lamb is as popular as ever. California Ag Today recently spoke about lamb with Jim Percival, chair of the American Lamb Board, who is also a lamb producer in Ohio.
“It is part of our culture, and the majority of the folks that raised lamb in the U.S. are family operations, family farms,” Percival said.
Some of the farms are generational: three to five generations old. The American Lamb Board is working to build that domestic demand for lamb. They have seen an increase in the last couple of years.
“We are finding that millennials love American lamb, and that is one of the things that excites us,” Percival said.
“[There’s] our Feed Your Adventure Side campaign; we have also worked really hard to make lamb more approachable, easy to serve, and easy to fix,” he explained.
“The millennials also want something different, and lamb is a wonderful premium protein and they love the taste. They love the texture, they love the meat, and they’re flocking to it.”
Lamb is especially popular in California and other places on the West Coast.
“We still do that lamb jam every year in San Francisco, and that is still a huge event that a lot of people show up to,” Percival said.
After 16 years without open trade, Japan has recently opened back up for American lamb producers. Trade was closed after the BSE scare, and lamb was never able to be exported into Japan. As of two weeks ago, the first load of American lamb was shipped to Japan.
The demand there is very strong; the Japanese want that premium protein product.
“The chefs over there are asking for our product, and we see that as a real opportunity for growth for American lamb,” Percival said.
“Japan was one of our biggest trade partners before it was closed. I’m sure it is going to have a huge impact on the California producers, and the demand there is very strong, but as with anything else, our biggest thing is to make sure that more Americans are eating more American. Lamb,” Percival said.
The American Lamb Board, the U.S. Meat Export Federation, and ASI all worked together to open the market back up with Japan.
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.
“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.
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.
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.
“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.”
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.”
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.”
“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.”
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.