Trade disputes put Yakima Valley’s agriculture industry on edge in 2018

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YAKIMA HERALD – MAI HOANG – One cannot talk about the Yakima Valley economy without bringing up agriculture. Much of the state’s $10.6 billion in agricultural commodities is grown here, and the sector in any given year supplies at least one-quarter or more of all Yakima County jobs.

In 2018, the local agriculture industry faced uncertainty as the U.S. engaged in several trade disputes with key trading partners, including Mexico and China.

“Although hard work, uncertainty and risk are among the only constraints in farming, 2018 seemed to have more than its share of unpredictability due to turmoil in international markets,” said Chris McGann, spokesman for the Washington State Department of Agriculture.

The ongoing challenge of securing workers looked to increase as Congress, despite efforts by local congressional representatives, remained in deadlock over immigration policy.

Outside of public policy developments, 2018 saw a key milestone in the ongoing diversification of offerings by apple producers when, for the first time ever, the iconic Red Delicious apple wasn’t atop Washington state’s varieties list.

What happened in 2018

Tariffs led to losses in the agriculture industry.

In March, President Donald Trump announced his plan to implement tariffs on steel and aluminum imported by other countries. It would be an announcement that would create headaches for the local agriculture industry.

“The change in U.S. trade policy approach resulted in harm to tree fruit growers and (there were) few if any offensive gains that offset the economic harm being inflicted on growers,” said Mark Powers, president of the Northwest Horticultural Council, which represents the Northwest tree fruit industry in public policy issues.

Several countries, unable to resolve the issue with the U.S., implemented retaliatory tariffs. Among them was a 20 percent tariff by Mexico on U.S. apples, a direct hit to the state’s apple industry as Mexico was by far its top export market.

The even larger trade dispute with China, which led to several rounds of tariffs between the two countries, was especially painful for the Northwest cherry industry. Just a year ago, China was the region’s No. 1 export market, taking in nearly 3 million 20-pound boxes. This past season, the tariff — which brought the overall tariff on cherries to 50 percent — essentially ended any major shipment activity to China. Industry officials estimated an $86 million loss due to tariffs.

However, Frank Lyall, a Grandview grower and president of the Yakima County Farm Bureau, said that while the short-term tariffs were painful, he believes there is a long game, namely reducing the U.S. trade deficit with China, that could ultimately benefit growers.

“Given the size of the trade deficit, (China) should be taking in much more” U.S. product, he said.

Immigration, employment and H2-A were problematic.

There has been little progress recently on U.S. immigration policy. The standstill in immigration reform, along with a tight employment market, meant that producers, yet again, were struggling to find enough workers, said Jon DeVaney, executive director of the Washington State Tree Fruit Association.

“A lot of people can find year-round work,” he said. “It means it’s hard to find people who want to do seasonal agriculture.”

As a result, more employers turned to the H2-A guest worker program. An indicator of the growing interest in the program came with the opening of new farmworker housing — a requirement for those who want to employ guest workers — at the former FairBridge Inn and Suites hotel on North First Street in Yakima.

“It makes the farmworker population more visible,” DeVaney said.

Employers continue to struggle with H2-A’s bureaucracy, but there were signs of improvement, such as a new policy that would allow employers to advertise positions online rather than restricting advertisements to print media.

Red Delicious no longer dominates.

At one time, Red Delicious was synonymous with the Washington apple industry as it made up a super majority of the state’s crop. But over the past 20 years, as consumers demanded more variety, production of the bright red apple has declined, though it remained the state’s most voluminous variety.

That’s not the case anymore: Estimates by the Washington State Tree Fruit Association this fall showed that Gala is now in line to overtake Red Delicious as the No. 1 variety.

Gala’s rise to No. 1, however, is less about any growth in that variety but rather the growth of other varieties, such as Honeycrisp, Cripps Pink and the soon-to-be-released Cosmic Crisp that replaced former Red Delicious acreage.

What to watch for in 2019

Trade disputes are likely to keep disrupting local agriculture

A proposed retaliatory apple tariff of 25 percent by India has been delayed until Jan. 3, Powers said. The measure would raise the overall tariff of apples shipped to India to 75 percent, which would be a huge blow as the country has taken in a sizable portion of the state’s Red Delicious crop. In addition, it remains to be seen whether the U.S. can resolve its trade issues with China — especially as it takes time to find a place for the substantial number of fruit once shipped to the country.

Those in the industry hope that the ratification of the U.S.-Canada-Mexico trade agreement by all three countries will lead Mexico to end its retaliatory tariffs against the U.S.

Growers will consider mechanization and other labor efficiency measures.

While more agricultural producers have opted to use the H2-A program to ensure a sufficient and documented workforce, others may prefer to take the upfront cost of H2-A and use it to improve the efficiency of their existing worker base, DeVaney said. That may mean investing in mechanized platforms to make it easier for workers to pick fruit or converting more orchards to the trellis-style apple tree.

The conversion to trellis-style trees is more adaptive to robotic picking machines that are in development. Progress on bringing a machine to market depends on the machine’s ability to pick tree fruit without causing blemishes.

“Mechanical pickers always seem like a viable possibility, but it also seems like it’s still five years away, too,” Lyall said.

Movement on immigration policy would be helpful.

While there have been some measures to make the H2-A program more accessible to growers, there remains the question of what to do with willing and able employees who are undocumented.

“There are still long-term policy changes we would like to see made,” DeVaney said. “The H2-A program doesn’t work for everyone.”

The eagerly awaited debut of Cosmic Crisp is at hand.

Arguably, no new apple variety has received as much industry attention than what Cosmic Crisp has received in the past several years. The apple, which was developed at Washington State University Extension in Wenatchee, is said to offer a sweet-tart flavor and a crunchy texture.

Many have had the opportunity to taste the apple — it’s received good reviews — at various industry events, but the public will have its first major opportunity to try the new variety when the first major crop is harvested this fall. Industry officials will be watching for the public reactions to the apple, as they will play a crucial role in the variety’s success, said DeVaney.

“There was never a big national advertising campaign on Honeycrisp,” he said, referring to another, relatively new variety. “It prospered because of word of mouth. That’s what we’re counting on for Cosmic Crisp.”

The success of Cosmic Crisp, along with other new varieties, may be even more important if the apple industry continues to be vulnerable to trade disputes and the industry needs to look to the domestic market to absorb production that was once shipped abroad, DeVaney said.

Posted by: Mai Hoang, Yakima Herald, December 30, 2018

Picture: Amanda Ray / Yakima Herald-Republic

A worker clips the stem off a Honeycrisp apple at a Rowe Farms orchard in Naches, Wash., on Thursday, Sept. 6, 2018.