The belief that California specialty crops could fare better than U.S. program crops in trade negotiations has not been borne out among the state’s fresh-market citrus industry.
California Citrus Mutual President Casey Creamer said exports to China last year were off 46 percent with a 50 percent loss in value to the industry. California’s fresh-market citrus production generates about $7 billion in economic value to the state, according to a published economic report.
“It’s impacted us fairly significantly,” Creamer said of the trade war between the two countries.
Though China is not the single-largest destination for fresh U.S. citrus – domestic shipments, including those to Canada rank higher – tariffs imposed on U.S. exports to China, and now the threat that China will halt all U.S. agricultural purchases, has the industry notably concerned.
Even though the threat by China to cease all U.S. agricultural purchase is believed by some to be a reference to state purchases of crops like corn, soybeans and sorghum, Creamer says Chinese companies that on the surface are privately owned, still tend to tow the party line of the Chinese government. The ability to source cheaper fruit from other countries just adds to the economic incentives to stop buying U.S. citrus.
Moreover, U.S. crops like pistachios and almonds that are in high demand by Chinese consumers, can’t be easily sourced elsewhere, whereas the United States must compete with various other countries in global citrus markets. This could have long-lasting impacts on export relationships between the U.S. and China when the trade war between the two countries is resolved.
Other impacts to world citrus markets may be seen in lower producer returns as that fruit must be absorbed elsewhere in the marketplace. As much of California’s fresh citrus winds up in domestic markets, the inclusion of fruit once destined for China into U.S. markets will continue to soften grower returns domestically and give retailers the upper hand on setting grower prices, Creamer said.