January 30, 2015
U.S., China open
doors to apple trade
By DAN WHEAT
Capital Press
WENATCHEE, Wash. —
All U.S. apple varieties will be
allowed into China and Chinese
apples will be allowed into the
U.S. as a result of plant health
bilateral meetings in San Fran-
cisco last week.
Shipments both ways could
begin in 30 to 60 days, the
Washington Apple Commis-
sion, in Wenatchee, said in mak-
ing the announcement.
It is too late in this season
for major sales in advance of
the Feb. 19 Chinese New Year,
but China could become a major
market of 5 million boxes worth
about $100 million annually
next year and maybe 10 million
boxes worth $200 million in
the not too distant future, Todd
Fryhover, president of the Wash-
ington Apple Commission, has
said.
Exports to China peaked at
about 3 million boxes and $55
million in the 2010-2011 market-
ing season when Red and Golden
Delicious were allowed into Chi-
na and other U.S. varieties made
their way in through gray-market
channels from Hong Kong.
Fryhover and Commission
Chairwoman Barbara Walken-
hauer, owner of Larson Fruit
Co., Selah, left Jan. 25 for Chi-
na to talk with importers about
Washington apple varieties and
resumption of Red and Golden
Delicious imports.
Reds and Goldens from the
Pacific Northwest had been al-
lowed into China in 1993 but
were suspended from August
2012 to October 2014 because
rots were found.
Walkenhauer called the Chi-
na opening “a welcome bright
Dan Wheat/Capital Press
Red Delicious apples, similar to these being packed Dec. 11 at
Olympic Fruit in Moxee, Wash., have been the main U.S. variety
exported to China for the past two decades. All U.S. varieties soon
will be allowed in and Washington apple shippers are anxious for
China to become a large market.
spot.” Fryhover noted Reds and
Goldens account for less than 40
percent of the Washington crop
and said full varietal access “al-
lows us to provide Chinese con-
sumers with more high quality
choices from Washington.”
The agreement in San Fran-
cisco was between USDA’s An-
imal and Plant Health Inspection
Service and China’s General
Administration of Quality Su-
pervision Inspection and Quar-
antine.
The agreement covers all
U.S. apple varieties from all
U.S. growing regions that meet
pest protocols, said Danelle Hu-
ber, international marketing spe-
cialist at the Washington Apple
Commission.
The New York, Michigan
and California apple industries
are talking about exporting to
China, Huber said.
Washington
traditionally
makes up about 65 percent of
the U.S. fresh crop and does the
vast majority of exporting. The
previous agreement for Reds
and Goldens applied only to
Washington, Oregon and Idaho,
Mike Willett, vice president for
scientific affairs of the North-
west Horticultural Council in
Yakima, has said.
The council, Northwest Fruit
Exporters in Yakima and the
Apple Commission have long
worked on access. On Dec. 5,
2012, the Apple Commission
dropped its opposition to Chi-
nese apples coming into the U.S.
China is the world’s largest
producer of apples, growing
mainly Fuji and seeking U.S.
access since 1998. It was denied
while the U.S. identified and
prioritized more than 1,000 pest
concerns.
At one time Washington
marketers feared an onslaught
of low-priced Chinese apples
would be too much competi-
tion. But Fryhover and others
now figure superior Washington
quality will trump at home and
U.S. apple sales in China will
outweigh any slighter market
losses here.
CapitalPress.com
5
Milk production up, prices down
By CAROL RYAN DUMAS
Capital Press
December milk produc-
tion for the 23 major milk
states, at 16.2 billion pounds,
was up 3.2 percent year over
year on an additional 35
pounds per cow and 107,000
more cows.
Per-cow production, at
an average of 1,886 pounds,
was the highest per-cow
measure for the month of
December since the 23-state
series began in 2003, ac-
cording to USDA National
Agricultural Statistics in its
latest report released Jan. 22.
At 8.61 million cows, De-
cember’s cow count was up
16,000 head from Novem-
ber after month-to-month
increases of 3,000 head in
November and September;
6,000 head in July; 11,000
head in June; and 10,000
head in May and April,
NASS reports.
Milk production for all of
2014 in the 23 states is fore-
cast up 2.5 percent year over
year.
But the record-high milk
prices driving the increase
in milk production have fal-
tered on global production
increases in major exporting
countries and demand de-
creases in major importing
countries.
Milk prices in 2015 will
be significantly lower than
last year’s prices, according
to analysts with National
Milk Producers Federation
and Dairy Management Inc.
Tight market conditions
continue to reverse, and
prices will stay depressed
until imports pick up and
international expansion of
milk production slows, the
organizations forecast in
their January market report
released this week.
2014 milk production and prices
(23 selected dairy states)
Million pounds
Month
2013
2014
Percent
change
Jan.
Feb.
March
April
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Year
15,985
14,715
16,512
16,105
16,648
15,860
15,762
15,768
14,874
15,449
15,002
15,741
188,410
16,186
14,899
16,687
16,332
16,922
16,227
16,388
16,174
15,507
16,013
15,532
16,242
193,109
1.3
1.3
1.1
1.4
1.6
2.3
4.0
2.6
4.3
3.7
3.5
3.1
2.5
Dollars per hundredweight
All milk Class III Class IV
$23.50
24.90
25.20
25.30
24.20
23.20
23.30
24.10
25.70
24.90
23.00
20.30
23.97
$21.15
23.35
23.33
24.31
22.57
21.36
21.60
22.25
24.60
23.82
21.94
17.82
22.34
$22.29
23.46
23.66
23.34
22.65
23.13
23.78
23.89
22.58
21.35
18.21
16.70
22.09
Source: USDA, National Agricultural Statistics and Agricultural Marketing services
Capital Press graphic
Imports by the major
importing countries, led by
China, are well-below year-
ago levels, and U.S. dairy
exports as a percentage of
U.S. milk production were
down 2.2 percent for Sep-
tember through November
2014 compared with the
same period in 2013, the an-
alysts reported.
U.S. dairy exports will
likely
continue
below
year-earlier levels until mid
year. World import demand
and U.S. exports are expect-
ed to recover after that, but
year-earlier comparison lev-
els will be lower, they fore-
cast.
CME dairy futures in-
dicate the U.S. average all-
milk price for all of 2015
will be at least $7 per hun-
dredweight below 2014’s re-
cord $23.97, they stated.
The USDA all-milk price
for December has dropped
$5.40 per hundredweight
from last year’s high of
$25.70 in September. The
Class III milk price has
dropped $6.78 from its high
of $24.60 in September,
and the Class IV price has
dropped $7.19 from its high
of $23.89 in August.
On the upside, the ana-
lysts expect feed to stay at
current moderate levels due
to a large volume of stored
grain from last year’s har-
vest.
USDA’s December price
for Midwest soybean meal
was $431.74 a ton, down
about $10 a ton from No-
vember and $67 a ton from
a year earlier. The Midwest
corn price was $143 per ton,
up about $38 from Novem-
ber but down $25 from a
year ago. Farm gate alfalfa
hay was $182 per ton, down
slightly from both Novem-
ber and a year earlier.
USDA is forecasting corn
prices at an average of $3.65
per bushel and soybean pric-
es at an average of $360 per
ton for the 2014/15 market-
ing year.
Raisin ruling may impact crop volume controls
By MATEUSZ PERKOWSKI
Capital Press
The U.S. Supreme Court
has decided to hear a legal
challenge to USDA’s restric-
tions on raisin sales, a case
that could ultimately impact
similar commodity market-
ing orders.
The justices have agreed
to reconsider a California
grower’s lawsuit that alleges
federal controls over raisin
sales amount to unconstitu-
tional takings without just
compensation.
Under the marketing or-
der for California raisins, a
portion of a farmer’s crop
is diverted to a federal “re-
serve pool,” which is intend-
ed to limit the market supply
of raisins and stabilize their
price.
Farmer Marvin Horne
of Kerman, Calif., claims
the scheme violates the 5th
Amendment of the U.S.
Constitution because he
must transfer ownership of
his crop to USDA without
being paid the fair market
value.
If the court agrees to over-
turn the marketing order, the
effect on similar USDA pro-
grams will depend on how
broadly the justices interpret
the meaning of “taking,”
said James Burling, an attor-
ney with the Pacific Legal
Foundation property rights
group, which is tracking the
controversy.
The USDA has market-
ing orders for 20 crops, with
some form of volume con-
trol authorized for almonds,
tart cherries, Florida citrus,
cranberries, dates, hazelnuts,
plums, raisins and spearmint
oil.
Not all of those restric-
tions are currently in effect,
and the mechanism for reg-
ulating market conditions
varies by crop.
If the raisin marketing
order is invalidated, the po-
tential impact on the other
programs will depend on
the specific language of the
court’s ruling, Burling said.
“That’s going to be on a
case-by-case basis,” he said.
The case was already
reviewed by the Supreme
Court in 2013, so the jus-
tices’ decision to again hear
arguments in the dispute is
seen in legal circles as sig-
nificant.
“You have a long shot of
in getting any case before
the Supreme Court. To get
the same case before the
court twice, that doesn’t
happen very often,” said
Burling.
While the previous review
related to procedural issues in
the case, the Supreme Court
will now sort out the under-
lying constitutional question
of whether the USDA is “tak-
ing” raisin farmers’ property.
The program allows
USDA to buy raisins from the
reserve pool for its food pro-
grams, with the funds paying
for the administration of the
marketing order.
Any leftover money is
supposed to be returned to
farmers, but Horne and other
producers claim that in past
years administrative costs ate
up all the cash.
Horne tried to avoid the
scheme by installing his own
packing equipment instead
of selling his crop to raisin
handlers. However, USDA
claimed the action made him
a handler and fined him about
$700,000 for not setting rai-
sins aside for the reserve
pool.
The dispute prompted
Horne to file suit against the
USDA, but the case became
tangled up in procedural
rules over which federal
court should handle the issue.
The Supreme Court ul-
timately decided that the
lawsuit should be heard by
the 9th U.S. Circuit Court of
Appeals, effectively allow-
ing Horne to avoid paying
the $700,000 penalty before
challenging the constitution-
ality of the marketing order.
Last year, however, the
9th Circuit rejected Horne’s
arguments, finding that he
continued to benefit from
raisins in the reserve pool
because diverting them from
the open market prevented
prices from dropping.
If raisin farmers don’t
agree with the marketing or-
der, they should try to per-
suade USDA or Congress
— not federal courts — to
change the program, the 9th
Circuit said.
During the Supreme
Court’s first review of the
case, some justices seemed
“perplexed” by the marketing
order, which they appeared
to regard as antiquated, said
Burling of the Pacific Legal
Foundation.
“Whether that amazement
leads them to find it’s a tak-
ing is a completely different
question,” he said.
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5-2/#13
U.S. Supreme Court
will decide raisin
‘takings’ case