Good news for Michigan cherry industry. Bad news for Turkey.
Michigan’s large but struggling tart cherry industry got a big boost Monday when the federal government tentatively ordered Turkish exporters to begin escrowing cash to cover huge new duties imposed on Turkey’s dried tart cherry imports to the United States.
If the ruling stands, it’s almost certain to end Turkish dried cherry imports. U.S. cherry producers accuse Turkish exporters of illegally selling cherries at below market prices and its government of unfairly subsidizing the nation’s cherry industry.
Monday’s ruling is expected to help Michigan growers recover the cost of cherry production, something that hasn’t come close to happening the last three years. It’s also likely to spur new efforts to insure that growers can compete on a level playing field if, as expected, new foreign competition emerges.
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Dorance Amos, of Williamsburg, whose family has been growing tart cherries for three generations, said cherry growers were desperate for some good news.
“We really needed this to happen. It could give us some momentum and our industry really needs it,” he said. “With imports so cheap, we couldn’t compete. The industry is just hanging on by a thread.”
As Bridge first reported in August, Michigan’s cherry industry is going through difficult times, with several growers in the northwest corner of the state selling their farms after years of red ink. A combination of over-production, bug infestations and fungal diseases have wreaked havoc this summer. But the industry has also pressed the federal government for help in a battle against cheap Turkish imports of cherry juice and dried cherries.
Though not a final decision, the magnitude of the U.S. Commerce Department’s preliminary ruling Monday and the fact that it folded what is typically a two-stage process into one announcement suggests a final ruling won’t be much different, according to those familiar with the process.
Neither the Turkish government, nor two major exporters of Turkish dried tart cherries, responded to Commerce Department requests for information. The five-member Dried Tart Cherry Trade Committee, representing four Michigan and one Utah processor, filed the petition requesting duties that it said would level the playing field.
Monday’s ruling concluded that the Turkish cherry industry benefited from huge government subsidies and that Turkish exporters sold their dried cherries to U.S. importers at prices less than their fair value.
If it stands, it would eventually result in import duties of more than $5 a pound on dried cherries that Turkish exporters had been selling for less than $1 a pound. A final decision is expected in late January or early February 2020.
Elizabeth Drake, a Washington-based attorney who represented the cherry industry in the petition seeking duties on Turkish cherries, said that since the petition was filed in April the imports have slowed to a small fraction of what they were.
“With this decision, we expect to see imports from Turkey basically dry up,” she told Bridge Magazine.
In a press release issued late Monday afternoon, the Commerce Department said enforcement of U.S. trade laws is a major focus of the Trump administration.
“Commerce has initiated 182 new antidumping and countervailing duty investigations – a 231 percent increase from the comparable period in the previous administration,” according to the press release.
Nels Veliquette, chief financial officer of Cherry Ke, an Antrim County-based consortium of businesses that grow, transport and process tart cherries, said the decision announced Monday “is excellent and will improve the industry’s long term outlook, but this is only a first step.”
“I’m very pleased that they harmonized the two announcements. It’s more evidence that we’re in the right here,” he said. “Farmers are famously good at not making a lot of money, if they can still live their lives. This positive ruling will really improve their attitude.”
Veliquette, who has emerged as a leading spokesman for Michigan’s cherry growers and processors, said cherries are not only important for the industry in northwestern Michigan, but for the region’s cultural identity.
Traverse City, after all, calls itself the nation’s Cherry Capital and many organizations and businesses incorporate the word cherry as part of their marketing.
Michigan produces more than 70 percent of the nation’s tart cherries, but Turkey is the world’s top producer. Most of Michigan’s cherry industry is based along the Lake Michigan shoreline from Manistee to Charlevoix. Its epicenter is Grand Traverse, Leelanau, Benzie and Antrim counties.
More than half of the 280 million pounds of tart cherries processed in the U.S. in 2018 were sold as frozen products. Dried cherries accounted for about 61 million pounds, according to the Cherry Industry Administrative Board. Tart cherries also are used for juice and canned fruit fillings.
Turkey exported about 1.5 million pounds of dried tart cherries to the U.S. in 2018, more than three times as much as it did in 2016, according to a fact sheet published by the U.S. International Trade Commission.
Mollie Woods, executive director of the Dewitt-based Cherry Industry Administrative Board, said of Monday’s decision: “I think that’s great and really interesting that they went ahead and made both decisions ahead of time.”
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