The Latest Salvo

09/01/2010 02:00:00 AM
Vicky Boyd, Editor

Foster says she couldn’t estimate how much of the 2010 crop would have gone to Mexico without the tariffs, since it varies, depending on dollar-peso exchange rates, variety mix and price. But it would have been a significant amount.

California apple growers enjoy a unique early market window in Mexico, says Alex Ott, execitve director of the Fresno-based California Apple Commission. But the tariffs are going to create a “much more difficult market to navigate.”

California apples typically compete with carryovers in the market from other export countries.

“If the price is not that great to begin with or they are average, we’re gong to have to start making decisions,” Ott says.

The tariffs also come at a time when California apple growers already face Mexican phytosanitary regulations because of the light brown apple moth.

Losing a large portion of the Mexican market also could have wide-ranging impacts within the U.S. apple market, Ott says.

If the apples can’t go to Mexico, then marketers may dump them in U.S. markets, driving down prices.

“So there are a lot of unintended consequences,” Ott says.

Frozen spuds take big hit

Potato growers who produce for the frozen market—mainly french fries—saw tariffs reduced to 5 percent from 20 percent.

Because Mexico is a price-sensitive market for that product, the reduction may have little effect, says John Keeling, executive vice president of the Washington, D.C.-based National Potato Council.

“What you have there is a situation now where we have a 5 percent [tariff] on our fries going into Mexico and our primary competitor, Canada, has zero tariff on theirs,” Keeling says.

Since March 2009, Keeling says U.S. frozen potato exports to Mexico have dropped to $30 million from $80 million. And one frozen potato processing plant in Washington has shut down, partly the result of reduced exports to Mexico.

“Every single day that the government isn’t trying to resolve things and start a meaningful dialogue, more U.S. jobs are lost,” he says.

Every little bit hurts

Roasted pistachios were on the original list and remain on it with a 20 percent tariff. The latest round of tariffs added a 20 percent tariff on raw pistachios.

Mexico isn’t a particularly large market for California roasted pistachios, accounting for about 2 percent of exports or 2,900 metric tons, says Richard Matoian, executive director of the Fresno, Calif.-based Western Pistachio Association.

Since the original tariffs in March 2009, producers have only seen a 3 percent reduction in exports to that country.



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