Apple trade with China may double earnings to $100M

A deal with China earlier this week opens the entirety of Washington’s signature cash crop to 1.4 billion customers.

Industry experts say the blockbuster deal expanding apple trade could double the state’s annual earnings on the fruit to more than $100 million annually.

The deal was announced this weekend by U.S. Agriculture Secretary Tom Vilsack. Washington has been shipping Red and Golden Delicious apples to China since 1994, and the industry has been pushing to ship varieties like Gala, Honeycrisp and Granny Smith there since that original agreement was signed.

In a phone interview Wednesday, Vilsack said opening the Chinese market to all varieties of American apples is part of the administration’s efforts to remove agricultural trade barriers worldwide.

“The department has removed 880 trade barriers that prevent American crops from reaching overseas markets,” Vilsack said. “We have been in the business of reducing and eliminating barriers for the past six years.”

The announcement follows the decision by Chinese officials late last year to begin importing the Delicious varieties of apples from Washington after a nearly three-year hiatus. Danelle Huber, international marketing specialist with the Washington Apple Commission, said that decision was based on the presence of a fungus in some Washington apples that the Chinese did not want affecting their large Fuji apple crop.

“This is a reciprocal agreement,” Huber said. “We will have to do testing on their products, too.”

China ceased buying Washington apples in August 2012, and didn’t begin buying them again until October. In the year before the embargo, Washington sold 3 million cartons of apples to China, accounting for about $55 million in sales.

Vilsack said efforts to establish a trade connection with China on apples were also motivated by a desire to achieve job security for growers. Washington ranks first in the country in apple production, growing more than half of the crop harvested in the United States.

“The Chinese market – it’s one in which we have a very robust trade surplus,” Vilsack said. “It has basically been the focus of this administration to stabilize good-paying jobs.”

Growers of the region’s other predominant cash crops lauded the trade expansion in China but said it would likely do little to affect their trade agreements with the country. Randy Suess, a Whitman County wheat farmer and Washington Grain Commission board member, said much of the American wheat sold to China is red, grown mostly in other states.

More important to Washington wheat farmers would be approval of the Trans-Pacific Partnership, a proposed trade agreement that would bring soft white wheat to countries in Southeast Asia, where the demand is higher.

“That’s really where our future market is,” Suess said of those countries.

Matt Harris, director of government affairs at the Washington State Potato Commission, called the apple deal “great,” but negotiations to import potatoes into China are ongoing.

“China is one of our larger markets” for frozen potatoes like French fries and hashbrowns, Harris said.

Pete Klaiber, marketing director for the U.S. Dry Pea and Lentil Council in Pullman, said he doesn’t expect the apple decision to speed up the expansion of the Chinese market for chickpeas and lentils, but China is a major customer of Washington dry peas.

“It’s an expanding market,” Klaiber said. “We’re pleased with the volume we’re seeing.”

Huber said members of the Washington Apple Commission, including President Todd Fryhover and Chairwoman of the Board of Directors Barbara Walkenhauer, are in Beijing holding tasting sessions with Chinese officials in anticipation of the first shipment of Washington apples arriving in China by boat within the next few months.

“We’re hoping they enjoy all our varieties,” Huber said.