Tariffs Cloud a Bright Future for Fruit and Nut Industry

Tariffs Cloud a Bright Future for Fruit and Nut Industry

American Fruit Grower’s fourth annual State of the Industry survey yielded mostly promising results, reflecting a generally robust industry — though there were many comments about an issue that has only emerged prominently in the results this year: tariffs/trade.

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The topic was certainly not top of mind for many growers, as what we think of the core four — labor, government regulation, production costs, and weather — remain from year to year. But trade stuck out as it was the first concern that has arisen from the many more basic issues involved in farming and selling a profitable crop since the survey began.

“Economics of the world and U.S. are in a low state whereas interest rates are high, the dollar is stronger and our exports are weak,” a grower from the West commented. “We need to strengthen our domestic markets and create better trade with the countries that use our products consistently.”

Another grower from the West, commiserated, saying “Nut prices are dropping severely, in part due to the Trump tariff war.”

Desmond O’Rourke, Publisher of the World Apple Report and a member of American Fruit Grower® and Western Fruit Grower® magazines’ Editorial Advisory Board, says he can sympathize with growers who export.

“The basic problem is that China has been called out for widespread stealing of intellectual property, exerting undue leverage on firms wishing to operate in China, and blatant breach of its agreements under the World Trade Organization,” he says. “The Communist Party under President Xi will find it difficult to admit China’s massive theft, and even harder to give up illegal and immoral practices.”

It’s only natural that grower organizations don’t really have any good answers for their grower-members. O’Rourke said he would sum up the present situation on tariffs as a mixture of confusion and fear among agricultural groups, as no one is quite sure what the next salvo will be, or perhaps worse, the retaliation.

“Opinion leaders appear to be equally divided on whether or not the pain of challenging Chinese practices is worth it for their industry. President Trump appears to have gained many allies in his tough stance, especially in Asia where China is also a military threat,” he says. “However, China may try to wait him out, hoping that he will be out of office in two years. Historic global issues may be at stake.”

Most of the nation’s fruit growers like their prospects for the coming year. Enthusiasm over new varieties and technology and the fact consumers are increasingly putting a priority on better flavor and nutrition has growers feeling confident about their prospects for 2019.

Those were some of the major takeaways from our fourth annual State of the Industry survey. Again, this year our survey elicited a warm response, as a total of 597 growers, crop consultants, Extension advisers, researchers, and allied industry members such as vendors, suppliers, and distributors weighed in.

Interestingly, the results were remarkably similar to those from past surveys, at least in terms of production plans for the coming year. About half of the growers who responded plan on similar production for the coming year, with about 40% or so looking to expand acreage, and about 10% scaling back in 2019.

One statistic that did stick out was in answer to how growers’ production this past year compared to 2017. The most common answer, by far, was down more than 10%, but that can, in large part, be attributed to the decline in the Washington apple crop, which is down significantly from 2017. Not to mention the problem the state’s cherry growers had shipping to China, which went haywire when Chinese buyers grew concerned because of the trade situation.

Overall, it should be noted, growers said they had an average year — though that’s like the joke about having one foot in ice water and the other scalding —when you consider 40% said their crop was down from 2017, 43% said it was up, and just 17% said it was similar.