Apples to Mexico

Workers sort Red Delicious apples at McDougall & Sons Inc., in Wenatchee, Wash. The end of a 20% tariff in Mexico will boost apple sales there. A lot of Red Delicious apples go to Mexico.

YAKIMA, Wash. — The Washington Apple Commission plans to spend $3 million advertising Washington apples in Mexico and $2.2 million advertising in India during the next two sales seasons.

Those are the largest two expenditures planned from the $8.4 million in USDA Agricultural Trade Promotion money the commission is receiving as relief for an estimated $129 million in industry damage from Mexican and Chinese tariffs. The tariffs were in retaliation for U.S. tariffs on steel and aluminum.

Mexico ended its 20% tariff on U.S. apples May 17 after the Trump administration announced it was ending steel and aluminum tariffs on Mexico and Canada.

The end of the Mexican tariff “is huge and by far the greatest thing” that could happen for apples in trade relations since Mexico is Washington’s largest apple export market, said Todd Fryhover, commission president, at the organization’s May 30 meeting in Yakima.

Mexico has been as large as a 15 million, 40-pound-box market but this year was at 6.2 million boxes, down 29.3% from a year ago due to the tariff imposed last June and a smaller crop.

The commission also plans to spend $730,000 of ATP money in Vietnam, $719,000 in Indonesia, $580,000 during the second year in China, $500,000 on launching the Cosmic Crisp in Canada, $400,000 in Thailand and $80,000 in Malaysia and the Middle East.

The commission will spend $4.6 million of ATP money in the 2019-2020 sales season and $3.8 million in the 2020-2021 sales season.

In addition, it will spend $445,000 of its own matching money in the first year and $400,000 in the second.

The commission hopes to receive all of its matching money from grower assessments on a larger crop this fall without using reserves, said Robin Mooney, commission vice president and treasurer.

Nationwide, the first ATP award totaled $200 million. On May 24, the Trump administration announced a second round of $100 million. Commissioners expressed interest, particularly if it is direct payments to growers.

Separate from ATP, the commission will receive $5.1 million in annual USDA Market Access Promotion money for the 2019-2020 sales season. MAP money goes largely for in-store, point-of-purchase promotions while the ATP money will go for direct consumer advertising the commission otherwise cannot afford.

The commission matches the $5.1 million MAP with $2.1 million from growers for a total of $7.2 million in export promotions. Of that total, the commission on May 30 approved a 2019-2020 budget to spend: $1.25 million in India; $1.14 million in Mexico; $668,000 in Vietnam; $538,000 in Central America; $526,000 in China and Hong Kong; $494,000 in Indonesia; $405,000 in Thailand and lesser amounts in seven other countries or regions.

The commission approved a total operations and promotional budget of $14.96 million, up 44.5% from a year ago due to the addition of $4.6 million in ATP money. The budget estimates $4.7 million in revenue from a 3.5-cent per box grower assessment on a 2019 crop estimated at 135 million boxes and $100,000 from interest and rented office space. The budget estimates $400,000 in grants separate from MAP and ATP.

The commission has an Aug. 1 deadline for companies to submit production and export volumes for three-year projections to help the commission make sure its priorities align with the industry and to help individual company planning.

Collective results are shared with companies. The Washington State Tree Fruit Association may take over the task next year.

The commission discussed having a state apple industry economic impact study from 2012 and 2016 updated to show the larger economic value of the industry.

Central Washington field reporter

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