Oct 18, 2019

Labor, trade issues continue to hurt Washington state farmers

While trade disputes and labor costs continue to affect Washington agriculture, Wenatchee-based McDougall & Sons co-owner Scott McDougall said the situation could get worse.

At a Farm Hall hosted by the Washington Policy Center, McDougall said that annual increases in labor costs is making it  more difficult to turn a profit.

“We’re still making money only because we have value-added apples,” he said. “If our tree densities weren’t where they were at, if we weren’t hitting target numbers, we would be in big trouble.”

Though their situation is “not nearly a crisis as the orchardists,” he estimates roughly 75 percent of the fruit grower industry is “in real trouble.”

According to a report from Lens (thelens.news), a pro-business, pro-growth online news publication in Washington state that advances public understanding of private enterprise issues, one of the reasons for the specialty crops’ situation is the disruption in exports due to the trade war with China. Last year, fruit orders were cancelled by Chinese companies after a new tariff took effect. The state Economic and Revenue Forecast Council (ERFC) reported that in the second quarter of the 2019 fiscal year, exports from Washington dropped 27.6 percent compared to the same time in 2018 – the largest drop since the first quarter of the 2000 fiscal year.

Here’s more from the Lens’ report:

At the Farm Hall, Washington State Tree Fruit Association President Jon DeVaney said that the decreased trade activity has been “extremely disruptive” to Washington growers due to the strong focus on international markets which has determined the type of fruit trees that growers have invested millions in planting.

“The days when we grew one or two kinds of apples….is behind us,” he said. “We’re picking varieties and sizes…to target particular international customers. If they can’t get their organic Cosmic Crisp that they want, they’re not necessarily saying: ‘Fine I’ll take a traditional gala instead.’”

It’s not a dilemma that growers can solve simply by selling inside the U.S., he added. Domestic transportation costs compose a significant portion of shipping costs; of the $4,000 it costs to ship a container of fruit to China, a third of that is spent transporting it from Wenatchee to ports in Puget Sound. However, it costs $8,000-$10,000 to ship the same container to the East Coast, according to DeVaney.

“We have a huge transportation and price advantage to exporting product,” he said.

Labor, trade issues continue to hurt Washington farmers