Shipping Profiles
California table grape growers are still awaiting a resolution to the Mexican trucking and tariff disputes that have dragged on for more than two years.
Grapes took it on the chin in 2009 when the tariff began at 45%. Shipments fell from 5.5 million boxes in 2008 to 1.6 million. The rate has since been dropped to 20%, but exports to Mexico are still hurting.
“I think we’re still down 37% from the 2008 level,” said Barry Bedwell, president of the Fresno, Calif.-based California Grape and Tree Fruit League.
“We’re still over 2 million boxes less.”
Hopes for a resolution rose in January when the federal Department of Transportation proposed a pilot program that would allow Mexico-based motor carriers to operate throughout the U.S. for three years. U.S. carriers would gain reciprocal rights in Mexico.
Once an agreement on the program is signed, tariffs would be cut in half — to 10% for grapes — and then eliminated when the first Mexican carriers are authorized to operate.
“We think the pilot program could be up within a couple months (of an agreement), but it could be five or six months,” Bedwell said.
But as June started, there had been no movement.
“The next step is to really be sure the administration follows through on this plan,” Bedwell said.
“In order to do that, they need to hear from Congress. … Our hope is that it would be completed this year, but anything can happen … unfortunately.”
Rick Paul, table grape category director for Sun World International LLC, Bakersfield, Calif., said the goal is within view.
“In the last two years, it’s had a significant impact on our business,” he said of the tariff. “We would really like to see it go away, and I think they’re halfway there.”
“We would love that, especially this year because the sugraone crop in Mexico is thought to be off 25% to 30%,” Paul said.
“So their pipeline might be empty by the time we’re ready to start shipping. The sugraone is a preferred variety in Mexico, and that’s been a major export market for us.”
Other grower-shippers were hopeful or took a wait-and-see attitude.
“The pressure is there,” said Michael Astorga, vice president of international business development for Sundale Vineyards, Tulare, Calif.
“A lot of fruit is going to Mexico so they’re going to have to fix that.”
“We’re hoping Mexico comes in heavier this year to buy more fruit,” said Keith Wilson, owner of Dinuba, Calif.-based King Fresh Produce LLC.
“They grow grapes in Mexico, but can’t in mid- to late summer. In August, we see Mexico buyers coming to California to buy grapes.”
The trade dispute began when Congress blocked funding for the Mexican Cross-Border Truck Safety Program in 2009.
“The bottom line is, the U.S. is the one out of compliance with NAFTA,” Bedwell said, referring to cross-border, long-haul trucking provisions in the North American Free Trade Agreement.
“It’s important we honor our trade agreements.”
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