Apr 7, 2007
Northwest Apple Deal Shuts Out Other Exporters

When the apple trucks lined up at the Mexican border March 1, chances were they’d all be from the Pacific Northwest and none will be from Michigan or Virginia or California. But apple producers from these states are already hard at work to make sure that situation doesn’t persist too long.

In the short term, the new agreement between Mexico and the Northwest Fruit Exporters creates a tilted playing field that will greatly favor the Northwest and all but freeze out producers from other areas. But in the longer run, the agreement signals a renewed willingness by Mexico to open its markets to U.S. apples – and Mexico is a big market.

“On. Feb. 28, the duty on Red Delicious and Golden Delicious apples (went) away for the Northwest exporters, but not for us,” said Don Armock, owner of Riveridge Produce in Sparta, Mich. “That puts us at an enormous disadvantage, so our apples will stay here for the time being.”

But, said Denise Yockey, executive director of the Michigan Apple Committee, “the good news is Washington growers got it going. Now we have to find ways to be part of it.”

Armock said Michigan and Virginia growers were planning a trip to Mexico in late February that they were hoping would “resolve it all.”

“We need to sign the same kind of agreement,” he said.

Once Michigan-grown Delicious get a level playing field, Armock expects good things – because, he said, Mexican consumers “appreciate the flavor characteristics of Michigan apples, which are more like the Delicious they grow in Mexico.”

Growers in other areas have not taken a “sour grapes” attitude toward the Northwest’s good fortune – although they could have. Back in 1997, only the Northwest was shipping apples to Mexico when Mexico complained that American growers were dumping apples into their market.

That resulted in 101 percent tariff imposed by Mexico. The next year, that was reduced to a 46.58 percent tariff on all Red Delicious and Golden Delicious apples coming into Mexico from the United States, and that’s where it has stayed.

Meanwhile, producers in other areas, such as Michigan and Virginia, spent a decade working with Mexico to develop protocols under which they could export apples. Michigan growers gained market access two years ago, and were looking forward to exporting in this, the third year. Nine Michigan exporters certify about 35 storage rooms of apples for export to Mexico. Mexican inspectors, who are paid by the storage owners, monitor these storages.

Virginia growers operate under the same protocol. Henry Chiles at Crown Orchards in Batesville, Va., said the protocol is “very expensive.” But, he said, the Mexican market “is a good market for us and we’d like to be in it. Hopefully, somebody will listen to us and we’ll get the tariff removed. We’ve been exporting a long time, and the export market is always full of surprises.”

When all areas of the United States were under the same tariff restrictions, the field was level even if the tariff was a burden. Now Northwest apples will go duty-free while other shippers must pay it. And it was Northwest growers, not those elsewhere, who precipitated the tariff in the first place.

The tariff applies only to the two Delicious varieties. There is no tariff on Gala, Jonagold, Jonathan, Rome and Empire – varieties Michigan grows but for which the Mexican market is considerably less robust. Chiles in Virginia also ships some non-Delicious varieties to Mexico.

Shannon Schaffer, manager of communications for the U.S Apple Association (USApple), said the Northwest producers “were the ones who asked,” and that’s how they regained access to Mexico. USApple does not negotiate on behalf of growers, but stands ready to “facilitate conversations” between U.S. grower groups and Mexico.

“Things do look positive” for other areas, Schaffer said, adding that the deal between the Northwest and Mexico “will move more apples, and that’s great for everybody.”

The agreement only applies now to the 83 members of Northwest Fruit Exporters in Washington, Oregon and Idaho. Armock agreed these growers were better organized – that’s how they landed the deal – and it’s up to growers in other areas to negotiate their own agreement with the Mexican government.

Instead of a tariff, the agreement states minimum price levels the Northwest Exporters must charge for apples. The prices varies by entry point into Mexico ¬¬– about $14.75 to $16 a box – and must be 10 percent higher in September to January, when Mexican apples are in the market.


Tags: , ,


Current Issue

On-farm AI: Water, farm, labor research guide decisions

Data collection tool expands farm management

Carmel Valley winegrapes: Parsonage Village Vineyard

IFTA Yakima Valley tour provides orchard insights

IFTA recognizes tree fruit honorees

Pennsylvania recognizes fruit industry professionals

Fresh Views 40 Under 40

see all current issue »

Be sure to check out our other specialty agriculture brands

produceprocessingsm Organic Grower