Retaliatory tariffs sour US cranberry market

Canada, Mexico, China, and the European Union are among those who have begun instituting retaliatory tariffs on cranberry imports coming from the United States.

Reporting from CNNMoney in April notes that China imports $50 million worth of US cranberries a year according to the US Department of Agriculture while the European Union imports $130 million in cranberries, or 38% of US exports.

The cranberry is one of only three fruits native to the US, according to The Agricultural Marketing Resource Center (AgMRC). Bogs in Wisconsin alone produces more than half of the cranberries in the world, as Ocean Spray reports.

And they’re not just for Thanksgiving—cranberries are produced year-round across the country. 905 million pounds of cranberries were harvested in 2017 alone, down 6% from 2016, as stated by AgMRC.

Although the cranberry industry is relatively small, it’s not the only agricultural market to feel the backlash from retaliatory tariffs. In July, FreightWaves reported the increase in Chinese tariffs on cherry imports as they rose to 50%, causing the Pacific Northwest to brace for impact on the 2018 season. The AgMRC valued US cherry exports at $679 million in 2017, while cranberries clocked in at $292.29 million in the same year.

June and July were particularly difficult months for cranberry growers as countries began to tack on tariffs. The European Union instituted a 25% tariff on American cranberry juice concentrate imports. It plans to impose a higher tariff on sweetened dried cranberries in the near future.

China more than doubled their tariffs on US dried cranberry imports, lumping an extra 25% tariff on top of the preexisting 15% tariff.

An already oversupplied market has caused prices of the berry to plummet this season, and coupled with mounting tariffs, concern among growers of the tart treat has risen.

For Mark Mariani, chairman and CEO of Mariani Premium Dried Fruits, his largest export market—China—has almost completely dried up. “The orders just stopped for us,” he said. Mariani has spent the summer watching his warehouse fill to the brim.

“Our cranberry industry is such a small little industry, but for some reason they throw us in there with all these tariffs. We don’t understand. Our impact is so minimal compared to, say, the steel business,” Mr. Mariani said to the Wall Street Journal.

Although cranberries are harvested year-round, they’re at their peak in early autumn, ahead of the holidays. Like tariffs imposed right before cherry season, cranberries are the perfect target for tariffs this time of year.

“This is coming at a bad time for the industry,” said Brian Wick, executive director of the Cape Cod Cranberry Growers’ Association, in an interview with the Wall Street Journal. “These were the markets we were looking at for major growth.”

FreightWaves spoke with Kellyanne Dignan, Ocean Spray’s Director of Global Corporate Affairs, who provided the company’s perspective on the issue: “Ocean Spray believes in free trade. As a cooperative of family farms in the US, Canada, and Chile we are proud to be the world’s largest supplier of cranberry products and one of the world’s best-known farmer-owned brands.”

“Even today, cranberries are only grown in a few regions in the U.S., Canada, and Chile. Because cranberries are only grown in three countries, they must be exported to the global market for consumers to enjoy their unique taste and health benefits,” Dignan stated.

“Both Ocean Spray and the U.S. Cranberry Industry have spent decades cultivating these global markets, and any tariffs that increase the price of either our ingredient or branded products will hurt our farmer families’ bottom line. It is also important to note, the tariffs that have been placed on cranberry products do nothing but raise prices for global consumers, as there is no domestic production to “protect” outside of the U.S., Canada, and Chile,” she continued.

“Ocean Spray encourages everyone involved in these trade disputes to look at the potential impact on both the farmer and the consumer when evaluating tariffs on cranberry products,” Dignan concluded.