Apple industry gets good news on crop, exports
WENATCHEE — The state’s apple industry received good news last month that includes a bumper crop for 2017 and the potential for improved export access to Indonesia.
The World Trade Organization upheld a ruling that Indonesia’s import licensing regimes for horticultural products are inconsistent with WTO rules. That could help get more Washington apples to Indonesia, the state’s largest southeast Asia market, particularly for the Red Delicious crop.
“This is great news for Washington apple growers,” said Todd Fryhover, president of the Washington Apple Commission, the international marketing arm of the state apple industry. “The industry has started the 2017 crop marketing year and we have excellent supplies for increase shipments to Indonesia this season.
In 2012, Indonesia enacted a series of regulations and import licensing requirements that prompted objections from the U.S., which were taken to the WTO. Before the restrictions, Washington apple exports to Indonesia had been as high as $50 million. After the regulations, shipments dropped by as much as 50 percent, according to the apple commission.
Meeting an increase in demand won’t be a problem if the U.S. Apple Association’s first report on the 2017 apple crop is any indication.
The association’s November 2017 edition of Market News reports 143.3 million bushels in fresh apples on hand as of Nov. 1, and 194.4 million bushels total in storage, up 8 percent from last year’s 180.3 million bushels. The year’s crop is 15 percent above the five-year average.
Washington apples account for most of those, with 145 million bushels total for 2017. Those numbers count apples for processing as well as for fresh.
The report includes estimates for some Washington varieties, said Tim Kovis, the Washington State Tree Fruit Association’s communications manager. The Yakima-based WSTFA will issue more solid numbers for its crop on Dec. 1.
Picking started in mid-August, a couple weeks later than last year, and is finishing up later, he said, but all seems to be going well.
“By December, we should be able to finalize what the crop looks like and will revise our August estimate from that,” he said. “In August, we sent out an estimate of 130.9 million 40-pound boxes of fresh apples, which was down a little over a percentage from the year before.”
Those numbers still put it as the third largest crop on record.
“That will probably go up,” he said.
Washington accounts for about 64 percent of the U.S. apple crop and about 90 percent of U.S. apple exports.
Pest assessment unchanged for now
WATERVILLE — Douglas County’s agricultural pest assessments will stay as they are for another year.
County commissioners voted on Nov. 7 to leave in place the existing formula that pays the county’s half of the Chelan Douglas Horticultural Pest Board, a program designed to prevent the spread of agricultural pests that could hurt the fruit industry.
Commissioners will “gear up for more public outreach and a formal recommendation on how to best meet the goals of the pest board and the fruit industry,” County Administrator Jim Barker said. That outreach is expected to start after the first of the year.
In September, commissioners started looking at changing how the program is funded. The county now collects $3.50 an acre from orchardists and covers the remainder from the general fund. When the program started, the per-acre assessment covered 75 percent of the costs. As program costs increased, orchardists’ assessments remained the same, but the county’s general fund costs increased.
Suggestions for changing the formula ranged from increasing the assessment to orchardists to implementing new assessments on residential parcels or some combination of the two. The suggestion to assess residential parcels stemmed from statistics that show most complaints about unsprayed, neglected or abandoned fruit trees that can harbor pests such as codling moth and the western cherry fruit fly are in residential backyards. One of the unanswered questions was whether the county has the authority to assess parcels inside the city limits.
A public hearing on the proposal was held Oct. 31 and continued to Nov. 7, concluding with the vote.
NAFTA negotiations keep fruit industry on edge
YAKIMA — Stay in the game.
That’s the best way to protect the state’s $500 million in apple, pear and cherry exports to Canada and Mexico, according to Northwest Horticultural Council President Mark Powers.
The council represents growers, packers and shippers of apples, pears and cherries in the region, and serves as the voice for region’s fruit industry on all trade agreement concerns.
The game, in this case, is the 23-year-old North American Free Trade Agreement between the U.S., Canada and Mexico, which is currently being renegotiated at the request of President Donald Trump.
“We would be disappointed and the industry would be harmed if the U.S. were to withdraw from NAFTA,” Powers said. “Under NAFTA, Mexico eliminated the 20 percent tariff on fruits. If the U.S. withdraws, without a doubt there will be tariff impacts and other complications could cause problems with crossing loads at the border. That would disrupt some important markets, our number one and number two exports.”
Washington state currently ships about 20 percent of its pear crop and 15 percent of the apple crop to Canada and Mexico, combined. Canada also is the state’s second-largest cherry market.
“That’s a total value of about half a billion dollars,” Powers said. “We have been operating duty free in essence for decades. We want that to continue.”
NAFTA, in place since 1994, came under fire during the 2016 election season, with then-candidate Trump promising to renegotiate or withdraw from the three-nation agreement he claimed resulted in unbalanced trade and fewer jobs for American workers.
Trump followed up on his pledge after he took office to start the renegotiation process and in July published objectives that included “maintaining and improving market access for American agriculture, manufacturing and services.”
Negotiations started in August in Washington, D.C., with plans for seven rounds and an aggressive timeline to wrap up the deal by the end of the year or early next year.
Powers, as a member of the Agriculture Technical Advisory Committee for Trade in Fruits and Vegetables, attended rounds three and four and is gearing up for continued discussions and negotiations.
He isn’t in the room during the negotiations, but, as an advisory committee member with security clearance to be briefed by negotiators, stays nearby should negotiators have questions.
“My job is to provide advice to the negotiators about what is important to the tree fruit industry or any objectives we might have,” he said.
His biggest objective at the moment, is that the agreement continue.
“While we can certainly see improvements that could be made to NAFTA — like making it easier to cross loads into Mexico and Canada, and improvements to food and plant safety rules — it works for us, generally. Our primary goal is to see that continue,” he said.
Powers said the fruit industry’s general approach, which mirrors that of the U.S. Department of Agriculture, is “do no harm to agriculture.”
The tree fruit industry is lobbying against a provision proposed by the U.S. contingent, which would make it easier for growers to bring anti-dumping cases.
The proposal, to create “a separate domestic industry provision for perishable and seasonal products,” is supported by vegetable growers in Florida who want to prevent produce from Mexico from being sold at artificially low prices, which hurts the domestic growers.
Powers contends that the current rules are enough.
“The northwest tree fruit industry has been subject to anti-dumping cases in the past and we don’t want to make it any easier for that to happen in the future,” Powers said. “That’s a case where it’s specific to the industry and why it’s important to be at these negotiations and in meetings to show that it’s important. If you’re not there, it makes it easier for things to happen. It’s politically important to be present.”
Highline grain partners announce merger
WATERVILLE — Four grain co-ops and a private company that have been working together as Highline Grain have agreed to formally combine into one cooperative.
The 3,500 or so grain growers, some who belong to more than one of the co-ops, approved the merger during annual meetings in September and October.
The companies are Central Washington Grain Growers, Davenport Union Warehouse, Odessa Union Warehouse, Reardon Grain Growers and Almira Farmers Warehouse. Several years ago they formed Highline Grain, a limited liability corporation, to build a shuttle loader facility in the Cheney area.
“It’s done so well that everybody decided working together is a good thing,” said Central Washington Grain Growers Board President Mike Carstensen. That prompted a look at taking it a step further.
“Central Washington Grain Growers has been marketing everyone’s grain anyway. But in the course of the past year, we started to get serious about merging,” he said.
The major concerns centered around losing local identity and local control, which were soothed by making sure growers would be represented by both region and volume in the new organization.
The merger expects to save $1 million by:
- Reducing duplication of effort
- Reducing administrative costs
- Creating opportunities that come with being a larger organization including attracting employees
“It was pretty evident to the membership that it was a no-brainer,” he said. “It didn’t take a whole lot of discussion.”
The paperwork is expected to be complete by April 1, when the new co-op will officially start.
The current board members in each of the organizations will finish out the year and handle closing out the books. They also will decide which board members will continue with the new company. Carstensen said he will serve on the Highline board.
The headquarters for the new Highline Grain will be in Waterville, in what will be the former offices of the Central Washington Grain Growers. The other office locations will remain as well, as will the roughly 100 employees.
“We have no plans to close offices or cut employees,” said Carstensen, though some job descriptions and duties could change.
One of the other reasons for proposing the merger is the age of the current employees, with 30 percent hitting retirement age in the next 10 years, Carstensen said. As employees retire, their jobs might not be filled, but it depends on the jobs.