No clear end is in sight for the Trump administration’s trade war with China, and while farmers and ranchers across the nation are reportedly feeling its impacts, Santa Barbara County’s agricultural industry has largely made it through unscathed–for now.
“For better or worse, the specialty crops that we grow here on the Central Coast are different,” said Claire Wineman, president of Grower-Shipper Association of Santa Barbara and San Luis Obispo Counties.
Although some Grower-Shipper members in the area have reported potential delays of secondary support material deliveries–mostly those made of steel–Wineman said they have yet to report any real sales impacts. Wineman said the Grower-Shipper Association will continue to monitor the situation, but it’s been relatively quiet in the Santa Barbara County ag world since the trade war first took shape.
The same cannot be said for other parts of the nation and state.
Since the White House imposed its first round of tariffs on Chinese imports to the U.S. in January, a move that triggered a string of tit-for-tat retaliatory tariffs on goods between the two countries and others, farmers and business owners nationwide have expressed concerns over the tariffs’ potential impacts.
Although the Trump administration’s tariffs, which are designed to boost U.S. production of goods, were launched in an effort to protect American businesses from Chinese undercutting and intellectual theft, the resulting trade war is weighing heavily on the agricultural industry.
When the first series of tariffs were presented, corn, soybean, and other farmers in the Midwest reported pricing declines and voiced concerns over potential billions of dollars in losses.
After several additional increased tariffs were recently imposed on American, Chinese, Canadian, Mexican, and European goods, including steel and aluminum, UC Davis released an extensive study in August estimating that the trade dispute could cost California fruit and nut farmers roughly $3.4 billion in losses annually. The loss in revenue, according to the study, would come from price declines caused by increased retaliatory tariffs on California goods frequently exported to China, including almonds, apples, and pistachios.
Although strawberries are not one of the crops commonly shipped to China–most are exported to Canada and Mexico on refrigerated trucks–California strawberry growers were recently granted market access to China just in time for the 2017 season, according to Carolyn O’Donnell, communications director for the California Strawberry Commission.
The shipments to China were small, O’Donnell said, and had really just begun when the Trump administration proposed its first tariffs. The miniscule sales to China have since dropped off. In 2017, California shipped more than 2.1 million pounds of strawberries to China, according to data collected by the Strawberry Commission. This year, only about 917,00 pounds have been shipped to China so far.
Although almonds and pistachios are the top crops exported from California to China and are most likely to take the biggest hits, the wine industry is also expected to face market challenges in the near future.
China is the No. 5 export market for California wine, according to Linsey Gallagher, vice president of international marketing at the Wine Institute in San Francisco. At least 10 Santa Barbara County wineries are involved in the Wine Institute’s export program, and several–including Storm Wines, Melville Winery, and Dierberg Star Lane Vineyards–ship to China. Gallagher said it’s a high priority market for almost all active exporters.
Despite the looming possibility of even higher tariffs on exports, California’s wine exports to China from January to June increased in value by 14 percent compared to the same time last year, according to Gallagher.
“With that being said, these additional tariffs put us at a further disadvantage to other wine producing countries who are also successfully growing their exports to China,” Gallagher wrote in an email to the Sun. “The playing field is even more un-level now, with competitors like New Zealand, Chile, and soon to be Australia enjoying free trade agreements with China for wine, and therefore entering the market tariff-free.”
Although the Trump administration announced last month that the U.S. Department of Agriculture would roll out a $12 billion relief package for farmers and ranchers impacted by the trade war, little of that funding would go toward struggling California farmers, according to Dave Kranz, communications and news division manager of the California Farm Bureau Federation.
In the Department of Agriculture’s revised aid plan, the details of which were released on Aug. 27, nearly $4.7 billion of direct aid would go toward seven commodities more commonly grown in the Midwest, including corn, soybeans, wheat, pork, and cotton. Only about $1.2 billion would go indirectly to more than two dozen common California commodities through a food purchase and distribution program. Another $1.7 billion would go to almonds and sweet cherries.
But the Farm Bureau doesn’t want short-term relief, Kranz said, it wants a long-term resolution to the trade war.
One sign of such progress came on Aug. 27, when the U.S. announced a trade agreement with Mexico that includes a number of agricultural provisions, including continuation of the tariff-free trade between the two nations. The promise of continued free trade in agricultural products will ultimately benefit California farmers, Kranz said, and he said Farm Bureau members hope to see continued progress in resolving agricultural trade disputes.
“We think that would be the best thing,” Kranz said. “Farmers have put a lot of effort into opening some of these markets, and we want to have them reopened or available to us as soon as possible so they can blossom and grow.”
Staff Writer Kasey Bubnash can be reached at kbubnash@santamariasun.com.
This article appears in Aug 30 – Sep 6, 2018.