U.S. potato exports fell in the first quarter of the July 2018-June 2019 marketing year, dragged down by retaliatory tariffs, Potatoes USA reported.
The marketing group in a Nov. 12 news release said frozen-potato exports fell 6 percent in volume and 5 percent in value from the year-earlier period. U.S. exports of dehydrated potatoes fell by 7 percent each in volume and value. Fresh-potato exports dropped by 12 percent in volume and 10 percent in value.
The declines reflect the impact of retaliatory tariffs from Mexico and China while competing products from the European Union continue to reflect low prices from the 2017 crop, Potatoes USA said. The group said the U.S. industry hopes the roughly 18 percent shortfall in the European crop this fall and resulting higher prices will help to improve U.S. exports through the marketing year.
Frozen-potato exports to Mexico face a 20 percent retaliatory tariff in response to tariffs the U.S. placed on imports of steel and aluminum from that country. Potatoes USA said this led to a 21 percent decline in U.S. exports to Mexico in the quarter as Canada and the EU gained significant market share. To Japan, its largest market for frozen potatoes, U.S. exports dropped by 3 percent from a year ago as the EU continued to gain market share. U.S. frozen-potato exports were off in Malaysia and Thailand by 19 percent and 18 percent, respectively, but were 6.4 percent higher in China.
Oregon Potato Commission President and CEO Bill Brewer said Mexico’s tariff on frozen potatoes reduced demand for the U.S. product.w
A recent trade agreement among the U.S., Mexico and Canada appears to be a good replacement for the North American Free Trade Agreement, though there are still tariffs in place and related issues to resolve, he said.
“We know what the possibility is, and we have seen a little bit of a shift in demand now. Whether it creates that much, we don’t know,” Brewer said.
U.S. exports of dehydrated potatoes in the quarter dropped by 29 percent to Japan, by 51 percent to China and by 62 percent to the Philippines, Potatoes USA said. China plans additional tariffs of 25 percent on U.S. dehydrated potatoes and 10 percent on frozen potatoes.
Fresh-potato exports in the quarter were dragged by a 20 percent drop to top U.S. export market Canada — which created the overall drop in exports despite increases of 39 percent to Mexico, 46 percent to Central America and 114 percent to South Korea, Potatoes USA said. Significant declines of fresh exports to the Philippines, Taiwan and Thailand also contributed to the overall reduction.
Brewer participated in a trade mission to South Korea in early November. Oregon, Washington and Idaho have access to the South Korea market for fresh, table-stock potatoes starting with the 2018 crop year, he said.
It’s an additional export market for the Pacific Northwest and “a positive message to the potato growers that our international trade program is working,” he said.