U.S. cherry growers seek to slow foreign dumping

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RECORD EAGLE – DAN NIELSON – TRAVERSE CITY MI — A group representing U.S. cherry processors has stepped up its struggle against what it considers unfair product dumping practices of tart cherries grown in Turkey.

Domestic cherry processors on April 23 filed a petition with the U.S. Department of Commerce and the International Trade Commission that seeks action to prevent and discourage the dumping of cherry products into the U.S. market.

“Turkey is buying frozen cherries at $1.10 per pound, taking four pounds of frozen cherries, drying them into one pound of dried cherries, and selling them into the U.S. market at 89 cents per pound. To us, that’s textbook dumping,” said Leelanau cherry grower Ben LaCross.

Shoreline Fruit’s Don Gregory agrees: “So you’ve got $4 to $5 dollars worth of cherries, plus the cost of drying the cherries, plus the cost of shipping those cherries, and they’re being declared in this country at less than a dollar a pound. They’re putting no value on the cherries at all.”

The petitions were filed by a group composed of four local cherry processors — Shoreline Fruit LLC, Graceland Fruit Inc., Cherry Central Cooperative and Smeltzer Orchard Co. — and the Payson (Utah) Fruit Growers Co-op. The petition identifies the group as the Dried Tart Cherry Trade Committee.

“The dried cherry market was created right here in Traverse City,” said Gregory. “Graceland Fruit was the pioneer that started it. Some other dryers have gotten involved. The majority of the dried cherry market still comes out of Michigan. There is one dryer in Utah, and there is one in the state of Washington. But the majority of them are right here. It’s been a market that’s been developed and owned by the tart cherry growers here in Michigan and those two other states.”

An International Trade Commission vote on the anti-dumping petition is scheduled for June 6. A final determination is scheduled for Jan. 27, 2020.

“In the last 10 years, the amount of imported cherry products coming into this country has skyrocketed,” Gregory said. “After the loss of a crop in 2012, the doors were opened up and we saw a significant amount of product start to come in.”

A warm March in 2012, followed by a freeze in April, crushed the Michigan tart cherry crop from 157 million pounds in 2011 to less than 12 million pounds in 2012.

That first surge of cherry imports from Turkey involved cherry juice and cherry juice concentrate. Those imports were fueled in part by Turkey’s duty-free status.

The U.S. government late in 2018 ended the duty-free status of tart cherry juice imported from Turkey. The U.S. on Nov. 1 began charging a half-cent duty on each liter of Turkish cherry juice, according to the proclamation.

LaCross said in November that, though the duty is small, it was a start at addressing the issue.

Experts in the domestic cherry industry this year are more concerned with the volume of accelerating imports of dried cherries.

“Several years ago, a little bit of dried cherries started to come in,” Gregory said. “In the last three years, the amount of dried cherries coming in has grown exponentially every year. And the majority of those are coming in from Turkey.”

The petition states that imports of Turkey-grown dried tart cherries totaled 413,893 pounds in 2016. That grew to 826,430 pounds in 2017, and 1,511,977 pounds in 2018.

“Today, we’re an industry (dried cherries) that has about 250 million pounds of sales on an annual basis,” said Gregory. “The amount of imports coming into this country now is almost the same as the domestic market.”

Dumping tart cherries into the U.S. market apparently holds economic and political benefits for Turkey.

“We believe that Turkey is subsidizing their stone fruit industry because President (Recep Tayyip) Erdogan has a very strong rural base that has kept him in power, and the Turkish economy is completely in the tank right now, the currency is basically valueless, so any way they can bring in U.S. dollars to their economy, it helps him stay in power,” LaCross said.

“And they have found a loophole, especially through duty-free access to the U.S. market, to trade cherries for currency,” said LaCross. “And I don’t think they economically have to make a profit like capitalistic farmers in the United States do. They’re so highly subsidized that they just have to keep the machine rolling over there and things are good.”

“We really need to fix this trade issue,” LaCross said.

U.S. Sen. Gary Peters, of Michigan, agrees. He visited the Shoreline Fruit facility in Williamsburg last week, where he said he welcomed the anti-dumping and countervailing duty petitions filed by the U.S. cherry industry.

He is behind a separate effort to battle trade inequities.

Peters in February reintroduced the Self-Initiation Trade Enforcement Act, intended to allow the government to directly address issues of unfair trade practices without the need for a petition from a trade group.

The bipartisan legislation, introduced with U.S. Sen. Richard Burr of North Carolina, would establish a task force within the U.S. Department of Commerce to investigate potential trade abuses throughout the international marketplace.

Posted By: DAN NIELSEN, Record-Eagle, May 5, 2019

Picture: Record-Eagle file photo/Jan-Michael Stump

Tart cherries move along a conveyor belt while being processed at Burnette Foods in Elk Rapids.