While the federal government has provided some aid to almond farmers feeling the effects of retaliatory tariffs, that $.03 per pound may not be enough to cover what growers and the industry stand to lose.
“While that’s appreciated that there’s something that’s going to help the industry, it really doesn’t start to address how large the situation is,” said Julie Adams, Vice President of Global Technical, Regulatory & Government Affairs at the Almond Board of California. “The view that we really, what we want is to get back into these markets and to be operating as efficiently and effectively as we can to grow demand.”
While the almond itself remains a prominent cash crop, the tariffs are testing the connections, relationships, and investments the almond industry has had in countries like China; the third leading export market for California almonds, that mitigation efforts might not cover.
The federal government lends a hand
The program is a called the Market Facilitation Program. It offers growers $.03 per pound for almonds, with a cap of $125,000 per person.
The almond industry is not alone in their criticism of the mitigation package. The Congressional Research Service (CRS) acknowledged that other commodity groups, like those representing corn, wheat, and milk, say that the first round of MFP payments don’t fully compensate the industries. The same notions were held for other specialty crop groups as well.
Estimates from CRS placed the impact of retaliatory tariffs at $63.3 million for almonds, however, other estimates, like those from UC Davis Agriculture and Resource Economics professor Dan Sumner, placed damages closer to $1.6 billion for almonds alone.
According to Adams, the government estimate focused on trade damages associated with China and Turkey, and was looking at direct shipments. But Sumner's analysis also included how the impacts start to influence the broader market.
The short-term and long-term concerns of the trade war
“From a short-term perspective, what we’ve seen has been an impact on confidence and uncertainty,” said Adams. “With growing crops, the last thing you want are for customers or consumers to be concerned or uncertain about the supply chain.”
Generally, tariff impacts won’t be seen by most people immediately. When the tariffs came into effect, the crops were already in the ground and getting ready for a harvest. Sumner told ABC10 in July that the tariffs could result in moderate job loss.
For the Almond Board of California, the long-term questions on the table are about the flow of almonds into China and the impact to customers, regarding products on the shelves.
“These are going to be some of the areas where we’ll have to see what starts to happen,” Adams added.
These markets aren’t easy to replace
“Mitigation measures… are certainly appreciated and they’re going to assist California growers, but, in the end, what we’re really looking at is to keep these markets growing, keep our relationships in place, and keep customers and consumers continuing to enjoy California almonds,” Adams said
About 70 percent of the almond crop is exported, and China is the third largest export destination. While the trade mitigation package can help offset some of the impacts of retaliatory tariffs for farmers, the markets themselves are a valued asset.
In July, Josh Rolph of the California Farm Bureau told ABC10 that there is “enormous competition” in places like China, and products could get displaced by goods from other countries. They are markets that are not easy to replace.
“You don’t create markets and develop relationships and develop customers overnight,” said Adams. “That takes a lot of time, and that’s where we’re looking at how this is going to impact the longer-term relationship that our shippers have in place.”