2018-04-12 / Front Page

Cherries unhurt by tariffs; apples in cross hairs

By Jay Bushen
Of the Enterprise staff

Like most Americans, Bingham Township farmer Jim Nugent isn’t sure what to make of the fast-escalating trade war with China.

But he knows a thing or two about cherries.

And though “fresh cherries” were among the 120 products included in China’s $3 billion round of retaliatory tariffs last week, the impact in Leelanau cherry orchards figures to be minimal.

Nearly every Leelanau tart cherry is grown for the processing market, Nugent said, so the frozen and dried Montmorencies from the county are exempt.

It’s a similar story for sweet cherries, which are mostly used for the maraschino cherry market or in processed products like yogurt.

“The bottom line is well over 90 percent of Michigan’s sweet cherry crop is grown for the processing market,” Nugent said, “and what fresh market we have, we simply don’t export.”

That said, China’s 15-percent tax may prevent West Coast farmers from shipping fresh sweets overseas. If the tariff holds up and those sweets from Washington, Oregon and California end up in American markets, growers could see a slight dip in price.

A bigger blow is expected to the apple industry.

“The effect is uncertain at this time,” said Jim Bardenhagen, who grows both apples and cherries in Suttons Bay Township, “but the West Coast is growing leaps and bounds. When you start taking markets from them, they start to come our way.”

Fresh apples from the Land of Delight rarely end up in China. But, as Bardenhagen pointed out, those from Washington state often do. In fact, according to data from the Washington State Tree Fruit Association, the Evergreen State shipped nearly 3,000,000 40-pound boxes to China in 2017 alone.

If those Washington apples end up in the Midwest, the forces of supply and demand will almost certainly be felt in the Leelanau County apple-growing community.

“It always has an impact on price, no question about it,” Bardenhagen said. “If supply exceeds demand, we’ll start to see a softening of price.”

It’s a shame, too, he said, because U.S. apple farmers may miss out on an expanding market.

China is home to more than 1.3 billion people.

“There’s no question the West Coast export market shrivels up and chases more apples back to the Midwest and to the east,” said Bob Gregory of Leland Township, a Michigan Apple Committee board member. “As any food item, one more apple, one more pound of food drives the price down. It’s a very inelastic market.”

On Monday, President Donald Trump reportedly addressed the growing concerns of U.S. farmers by saying “we’ll make it up to them” and “farmers will be better off than they ever were.” Trump also said he told Agriculture Secretary Sonny Perdue to work alongside Cabinet members to ensure U.S. farmers are protected.

If that doesn’t go according to plan, however, pressure will be placed on newer apple varieties like Honeycrisp and Pink Lady to pick up the slack the budgets of local apple growers.

“The older varieties — Gala, Red Delicious, Yellow Delicious, Granny Smith — those will take it on the chin,” Gregory said. “Fall varieties like Sweet Tango hit the market early and clear it by December. That one won’t be as affected quite as extreme as the others.”

Last Thursday, leaders within the national apple-growing industry were reluctant to comment. The executive director of the Michigan Apple Committee, Diane Smith, deferred to the U.S. Apple Association, which deferred to the Washington Apple Commission, which deferred to the Northwest Horticultural Council.

The president and CEO of the U.S. Apple Association, Jim Bair, however, expressed his frustrations in a statement last week. Bair said the U.S. Apple Association is “extremely disappointed that apple growers have been caught in the crosshairs of what seems will be a trade war.”

“China’s retaliatory response to U.S. tariffs are just the latest chapter in a long and sad story where U.S. apple growers get hurt in a fight we didn’t start and in which we have no interest,” he said.

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