July 13, 2018
CapitalPress.com
9
‘I would say Bruce Grim is a true grower and industry advocate’
GRIM from Page 1
ily orchard in 1980 upon their
father’s retirement.
Over time, he increased his
holdings to 100 acres of apples,
pears and cherries. He learned
about marketing in the 1980s
while on the board of Skookum
Inc.
The associations
He was board chairman of
the Washington Apple Com-
mission from 1999 to 2001,
when many growers were go-
ing broke because of too many
Red and Golden Delicious ap-
ples, poor fruit quality and the
Asian financial crisis.
Companies were not meet-
ing sales targets. Cutthroat
competition held prices down.
“We were in difficult straits
and needed to do something,”
Grim said.
In early 2001, the market-
ing associations were formed.
Grim was drafted as first man-
ager and began work June 11.
They could share infor-
mation under the 1922 Cap-
per-Volstead Act, which ex-
empts associations from federal
antitrust laws.
“Theoretically, under Cap-
per-Volstead you could agree
on a price. We never have and
probably never will,” Grim
said. “There are too many vari-
ables, and members realize
there are different marketing
opportunities. Some contracts
may be at higher prices than
some spot markets. It’s not one
size fits all.”
They talk about price and
supply issues, and about market
dynamics such as the strength
of the dollar, tariffs, trade pol-
icies and anti-dumping issues.
But they can’t divide up mar-
kets or limit the number of trees
planted.
The goal isn’t a monopolis-
tic price structure but greater
equity “between retailers and
growers to ensure a reasonable
return and sustained profitabili-
ty for all segments of the indus-
try,” he said.
How it works
Early on, the associations
tried setting floor prices. That
didn’t work because of differ-
ences in markets and quality.
Then they agreed to set price
ranges that they were not bound
to but would try to stay within.
On conference calls ev-
ery other week, Grim presents
shipping data and price averag-
es from the Washington State
Tree Fruit Association. Market-
ers discuss and adjust voluntary
price ranges for varieties and
grades.
The system works.
A mid-October freeze in
2009 left companies with a lot
of apples with a short shelf life.
They lowered prices to move
the fruit but not so low that it
damaged prices for the rest of
the season.
2012 was a perfect storm,
a once-in-a lifetime wonder.
Washington growers had a
then-record 128.8-million-box
apple crop. Normally, huge
supply means lower prices. But
production in New York, Mich-
igan, Canada, Mexico and Eu-
rope was way down and Wash-
ington enjoyed record prices
and returns.
“By making everyone
aware, we helped and encour-
aged to push higher. There
would have been record prices
without us, but maybe not as
high. We took full advantage of
it,” Grim said.
Marketers say the associa-
tions have helped stabilize what
can be chaos and kept them
from being “lone rangers in the
dark groping about for what to
do.” Information is more trust-
worthy, they say, than what they
obtain about each other through
buyers who play sellers against
each other to get lower prices.
But there are limits to the as-
sociations’ effectiveness.
Apple sizes have varied
considerably in recent years,
Hammonds were charged under
a federal anti-terrorism statute
HAMMONDS from Page 1
Grim sold some of his or-
chard in 2007 and 2008. He
planned to keep the rest but
eventually sold it after his first
wife, Candace, died of cancer
in 2009.
In September 2008, he be-
came the last executive director
of the industry flagship Wash-
ington State Horticultural As-
sociation. It merged with three
other associations in 2014 to
form the Washington State Tree
Fruit Association.
The 110-year-old Hort As-
sociation educated growers,
packers and shippers on horti-
cultural and storage issues and
lobbied state lawmakers.
Being an attorney and grow-
er made Grim a perfect fit, but
some board members were un-
sure about having an attorney,
said West Mathison, president
of Stemilt Growers LLC, a
large tree fruit company based
in Wenatchee.
“Bruce is one of the few
people in the industry that
could effectively speak to the
governor on a conference call
and then line out a crew in the
orchard in the next breath. He
At the industry’s annual
meeting last December, Seat-
tle investment banker Michael
Butler predicted most small
growers and smaller com-
panies will die out and six to
eight large companies will
dominate.
Grim agrees there will be
more consolidation. The num-
ber of apple and cherry grow-
ers is shrinking as production
grows, while pears are more
static and have a better chance
of holding small growers, he
said.
There have always been
those in the industry who say
they don’t need to be part of
collective solutions because
they are too big and efficient to
fail, Grim said.
“Let me suggest in the
strongest terms possible that
the ‘last man standing’ concept
is ideological fool’s gold. The
apple segment of the tree fruit
industry will survive or fail
collectively. There will be no
last man,” he said.
If knowledge is power,
shared knowledge is even
greater power, he said.
“In many ways, the issues
confronting the tree fruit in-
dustry that led to creation of
the marketing associations 17
years ago are much like today.
We need to be thinking in cri-
sis mode,” he said. “The in-
dustry does not need a ‘heads
down, go it alone’ approach.
We are stronger collectively
and that has been the great
value of the marketing coop-
eratives. By working together,
the future is bright.”
Attorneys are arguing expansion
decision was within president’s authority
and can’t be reviewed in federal court
TRUMP from Page 1
In two cases pending in
Washington, D.C., attor-
neys for the Trump admin-
istration are now asking a
federal judge to deny that
request, arguing the ex-
pansion decision was with-
in the president’s authority
and can’t be reviewed in
federal court.
The government has yet
to reply to a similar mo-
tion in the third lawsuit
filed in Oregon.
Even if the expansion
can be challenged in fed-
eral court, the plaintiffs
have “misconstrued” the
O&C Act because that law
“does not require the agen-
cy to manage every tree on
every acre of O&C lands
for timber production,” the
government’s
attorneys
said.
The Trump adminis-
tration’s arguments are
similar to those made by
environmental groups that
have intervened in those
cases — the Soda Moun-
tain Wilderness Council,
Klamath-Siskiyou Wild-
lands Center and Oregon
Wild.
Cascade-Siskiyou National
Monument expansion
Area in
detail
Original monument boundary
Newly expanded boundary
Medford
238
JACKSON
99
140
KLAMATH
Aspen
Lake
5
Ashland
Range
“The deep state is alive and
well in these agencies,” she
said.
The notion that Obama de-
clared a “war on ranching” is
contradicted by the amount of
grazing on public land during
his term, which remained sta-
ble, said Weiss of the Center
for Western Priorities.
The Hammonds, mean-
while, were convicted of a
“very serious crime” that
shouldn’t be brushed aside, he
said.
The nonprofit would not
have objected to Trump simply
commuting the Hammonds’
sentences and setting them
free, Weiss said.
A full pardon grants broad-
er absolution, which undercuts
the dangerousness of setting
fires and indicates that public
land can be burned without
consequence, Weiss said.
Militants who occupied the
Malheur National Refuge and
previously confronted feder-
al agents at the Cliven Bundy
ranch in Nevada will also see the
Trump administration as sympa-
thetic to their aims, he said.
“We think this sends a very
dangerous message that will
put America’s park rangers,
law enforcement officers and
public land managers at risk,”
he said.
Other achievements
Industry outlook
Cascade
While many of the Ham-
monds’ supporters didn’t ap-
prove of the takeover, they saw
the Obama administration’s
pursuit of longer prison sen-
tences as vindictive. That sen-
timent was echoed in Trump’s
pardon announcement, which
called the appeal “overzeal-
ous.”
“I think the president rec-
ognized they’re good and de-
cent men and got a raw deal on
the sentencing,” said Nathan
Jackson, a rancher and presi-
dent of OCA. “The wheels of
justice turn slowly but they
do turn. ... These guys were
railroaded and now they’re
getting out, and that is what is
right and just.”
The Hammonds were
charged under a federal an-
ti-terrorism statute, which
caused many in agriculture to
question the judgment of the
prosecutors.
“Farm Bureau was shocked
by the minimum five-year sen-
tence the Hammonds faced,”
said American Farm Bureau
President Zippy Duvall. “Even
worse was the Justice Depart-
ment’s decision to use anti-ter-
rorism laws to prosecute them.
We could not be happier this
ugly chapter in governmental
overreach has come to an end.”
For some critics of the
Obama administration, the
Hammond case served as an
example of a federal persecu-
tion of ranchers to bolster en-
vironmental aims.
The pardons will hopefully
make it clear that federal man-
agers are not free to put ranch-
ers out of business and take
their land, said Dave Duquette,
national strategic planner for
Protect the Harvest, an agri-
cultural and hunting nonprofit.
“It will send a message to
the lower-level bureaucrats,”
he said. “If it doesn’t, then
they’re not paying attention
because the Trump adminis-
tration is not going to take that
kind of stuff.”
The federal government’s
approach to the Hammonds
reflects “prosecutorial miscon-
duct” that’s evident in other
cases, said Ramona Morrison,
daughter of deceased Nevada
rancher and “Sagebrush Re-
bellion” icon Wayne Hage.
“It’s a little spooky that’s
how far they will go,” she said.
“It’s the same tactic they’ve
used across the West.”
Morrison is less optimistic
about the Hammond pardons
changing how federal business
is conducted on the ground,
however.
creating “marketing head-
aches,” making it harder to set
price ranges and stay on critical
shipping targets, Grim said.
There are also times, as was
the case with cherries in July of
2009 and 2017, when there was
simply too much fruit and too
short a sales window, he said.
“Too large a volume in too
compressed a marketing peri-
od. It breaks down. No ques-
tion. Price is the only mecha-
nism to move the fruit,” Grim
said. Price ranges go out the
window, and it’s every compa-
ny for itself.
Another limitation is that
less than a majority of compa-
nies belong to the associations.
But, he said, there is a signif-
icant volume of production
from those who do.
N
66
10 miles
CASCADE-
SISKIYOU
NAT’L MON.
Ore.
Calif.
yo
Siski
u M
.
tns
r
Grim was born in
Wenatchee and grew up on the
family orchard 20 miles north
in the small town of Entiat.
“My parents were products
of the Great Depression with
no opportunity for higher ed-
ucation,” Grim said. “So Dad
gave my brother (Doug) and I
every dirty job in the orchard as
enticement to go to school, like
cleaning out the chicken house
in July.”
It worked. Both brothers be-
came attorneys in Oregon and
practiced law there until Bruce
returned to run the 40-acre fam-
Dan Wheat/Capital Press
Bruce Grim picks a Rainier cherry. He’s held four key industry leadership posts during his career.
From its commercial begin-
nings in the 1880s, Washington
tree fruit has grown into a $3.3
billion-a-year industry. Grim
says the industry’s greatest
challenges are, first, the in-
creasing cost and shortage of
labor and, second, trade.
“We’ve moved heavily into
H-2A (foreign guestworkers),
which is very costly. There are
some real challenges in main-
taining a labor supply in a
cost-effective manner,” Grim
said.
The minimum wage for
H-2A workers and domestic
workers in the same orchard
is $14.12 per hour compared
to the state minimum wage
of $11.50. H-2A employers
also have to provide housing
and transportation between
the country of origin and the
orchard.
Labor costs increase 5 to
10 percent annually and are
the largest part of production
costs, Grim said. He questions
how that is sustainable.
“At the warehouse (pack-
ing and shipping) we’ve used
mechanization to reduce labor
costs, but in the orchard we’re
not there yet,” he said.
After 11 years of working
on immigration reform there’s
still a need for “a guestworker
program that allows workers
to come and go home at a cost
that doesn’t drive growers out
of business,” he said.
The minimum H-2A wage
is based on the state’s wage
profile, which is high because
the state’s minimum wage is
tied to the Seattle Consumer
Price Index, Grim said.
“The cost of living in dif-
ferent areas of the state isn’t
what it is in Seattle. So it only
assures the cost of labor goes
up, margins go down and we
lose more growers,” he said.
After labor costs, the in-
dustry’s biggest challenge is
the Trump administration’s
apparent move away from
free trade agreements, Grim
said.
“There is every likelihood
that NAFTA (North American
Free Trade Agreement) won’t
be renewed and Mexico and
Canada are our two biggest
export markets for apples.
We export 34 percent of the
apples we grow,” he said. If
exports decline, more fruit
will be forced on the domestic
market, driving prices down, he
said.
Another challenge is the
marketing of Cosmic Crisp,
a new Washington State Uni-
versity variety headed toward
becoming the new state apple
with an unprecedented fast
ramp-up of market volume
starting in 2019.
The cost of planting 12 mil-
lion new trees in three years is
estimated at $275 million to
$550 million. Cosmic Crisp
could be very profitable, but
it all depends on whether con-
sumers embrace it and whether
it seamlessly replaces older va-
rieties.
The industry is betting
consumers will love its sweet,
tangy flavor more than Honey-
crisp, which is one of its par-
ents.
“We probably know more
about Cosmic Crisp from a
research standpoint, horticul-
turally and storability than any
managed variety we’ve come
up with,” Grim said. “What we
don’t know is how it will trans-
late into the marketplace.”
It’s more a matter of hoping
demand follows supply than
supply following demand and
“absolutely is a big risk,” Grim
said. “But it’s an acceptable
risk. A lot of smart people think
so.”
ive
The beginnings
Labor and trade
Cosmic Crisp
R
th
Association, Mid-Columbia
Pear Marketing Association
and Northwest Cherry Mar-
keting Association have oper-
ated in Wenatchee since 2001.
They’re commonly referred
to as “the marketing associa-
tions.”
That they still operate is
evidence of getting over “a
trust hurdle” and figuring out
“a way to do business to have
critical mass to make them
fly,” Grim said.
It took time for him to
build trust with the major pack-
er-shipper-marketers.
They
shared information with him,
some of it sensitive and pro-
prietary, that he was allowed to
share anonymously with all of
them for the good of the whole.
He did it without betraying
confidences.
“I would say Bruce Grim
is a true grower and industry
advocate. His tireless work in
establishing and leading the
marketing associations was
and is a bold attempt to raise
grower returns by bringing to-
gether a competitive industry,”
said Mark Zirkle, president of
Zirkle-Rainier Fruit Co., a large
tree fruit company. “His ability
to gain consensus and people’s
trust made him an ideal inau-
gural marketing association
chief.”
Grim’s successor, Brian
Focht, general manager and
past domestic sales manager
of Oneonta Starr Ranch Grow-
ers of Wenatchee, is anxious to
make the associations even bet-
ter, Grim said.
Focht, 55, has been with
Oneonta for 17 years. He has
previous sales experience with
the Dovex and Northern fruit
companies.
“Bruce has done a great job.
I hope to continue and bring a
little different perspective since
I’ve been directly involved in
sales with all the major retailers
for the last several years,” said
Focht, pronounced “Foaf.”
He said he will bring an “up-
to-speed vision” of what’s go-
ing on in the marketplace and
doesn’t think he’ll have any
problem gaining the trust of
those who have been his com-
petitors since he knows them
all.
was a great steward of our great
industry,” Mathison said.
Under Grim’s leadership,
the Hort Association created
a food safety audit program
to help small growers comply
with the new Food Safety Mod-
ernization Act. The association
was also successful in applying
for and helping other organiza-
tions apply for federal specialty
crop block grants, newly creat-
ed in 2006.
5
Kl a m a
Ore.
Calif.
Alan Kenaga/Capital Press
It’s unclear what the
Trump
administration’s
legal position portends for
a possible reduction in the
monument’s size by ad-
ministrative action, said
Lawson Fite, AFRC’s gen-
eral counsel.
“I don’t think this filing
rules it out, but it’s hard to
say,” Fite said.
The Trump administra-
tion is probably defending
the Obama-era decision to
“defend the presidential
prerogative” and preserve
the “power of the execu-
tive,” he said.
Legal challenges to
monument designations
and expansions haven’t
been successful in the
past, but the current litiga-
tion is different due to the
unique aspects of the O&C
Act, which requires a sus-
tained timber yield, Fite
said.
“Our view is they don’t
have as much discretion
as they say they do,” he
said.