On August 19, Dan Richey of Riverfront Packing Company gave an update on the status of trade issues impacting the Florida citrus industry. The international market dynamics have changed over the years, resulting in a more challenging environment for Florida's citrus exporters.
Richey, who is a member of the Agricultural Trade Advisory Committee, said international trade is still very important to Florida's citrus industry. "The majority of our grapefruit is exported to markets overseas, primarily to the European Union, Korea and Japan," he said.
China
There has been much discussion regarding the trade war between China and the US. This has resulted in billions of dollars worth of tariffs applied to goods traded between the two nations, including fresh produce from the United States. Richey noted that although very little citrus from Florida is sent to China, the trade war is still having an effect on Florida.
"Florida doesn't ship that much fruit to China as an industry," he explained. "We just don't match up with that market right now. It is a very big market for California citrus, however. Therefore, because of the trade war, more California product is ending up on domestic shelves at retail which provides competition for shelf space and that is causing an indirect effect on us."
Japan
Japan is one of the most important markets for Florida. Richey pointed out that the state has shipped upwards of 12 million cartons to Japan over their history, but last year only shipped 600,000. The reason for the decline, he said, is due to more producers entering the Japanese market.
"We are getting some infiltration into a market we once owned, especially in that window of December to April. Now we are seeing some additional countries enter into that space, including Mexico, Israel and Turkey."
Richey added that there are some additional hurdles for Florida, including tariff structures and growing costs related to reduced grapefruit acreage in Florida. "Countries like Mexico have a tariff advantage when it comes to Japan," he observed. "We also don't have the production we once had, or the yield per acre, so our pricing has gotten very high. We just can't support those market like we used to."
Korea
Korea is a very promising market for Florida citrus, with growers reporting notable growth to that market in recent years. Again, tariffs have come into play here, but this time in Florida's favor.
"Korea is a market that has grown significantly in the last seven or so years," Richey shared. "It was around seven years ago that the United States negotiated a Free Trade Agreement with Korea which has seen the tariff phased down from 30 percent to 0. As a result, we have seen a direct correlation of our shipments to Korea in line with that reduction."
Europe
Another challenging market for Florida has been the EU. Again, once a strong consumer of Florida grapefruit, Europe has implemented what Richey described as "non tariff trade barriers", most notably surrounding the importation of fruit considered at risk of spreading canker.
"The European Union has been a challenging market for Florida, especially with regards to the canker protocol that they require us to adhere to. The rest of the world has realized that fruit is not a pathway to this disease and therefore it is an unnecessary and costly barrier for us."
Importation of fruit
It's not just exports that are the source of challenges for the Florida citrus industry. According to Richey, the importation of fruit into Florida - and the relaxing of laws surrounding that - has resulted in a greater risk to Florida growers of pests and diseases from source countries. He explained that a long-standing law was recently repealed which required fruit from counties known to harbor harmful tropical pest to be offloaded in more northerly ports like Philadelphia. They can now, however, be sent to ports such as Miami.
"Any invasive pest from tropical countries will not survive a winter in Philadelphia," he concluded. "However, any fruit from these places that comes into Florida is a real challenge as these pests can rapidly multiply in our climate. Such importation into Florida poses much risk of pest and disease spread."
