State grows ag exports to Mexico

From governor to grower, there's a rosy outlook for Washington ag exports to Mexico in 2008.

Farmers can thank at least two factors for the growing trend: a weakened U.S. dollar and the North American Free Trade Agreement.

NAFTA-led trade with Mexico has accounted for more than half of the growth in U.S. ag exports since the agreement's inception in 1994.

Washington shipped more than $207 million in food products to Mexico in 2006. Mexico is the top export market for Washington apples with a trade value of $128 million in 2006.

"Apple exports to Mexico have always been quite heavy," says Rocky Weible, a Washington State Department of Agriculture area supervisor for the Lower Yakima Valley. "We have a lot of them and they want them," he adds. "They're easy to ship and easy to consume."

Weible, who works directly with the growers, helps the state agency conduct fruit inspections in our area, and says from personal experience 2007 and 2008 are shaping up to be heavy export years.

"We're shipping more product than in years past," he notes. "It makes a heavier workload for our inspection office with the devaluation of the dollar," he adds. "Exports go up because more countries can afford to trade."

Weible says the development should be a boon for growers. "It just gives them another source to sell their product."

NAFTA "opened up the market for Washington apples"

Apple exports to Mexico have risen by 28 percent in 2007, says Rebecca Baerveldt, an export marketing manager for the Washington Apple Commission.

"Demand is very strong. We're off to a very strong start," she said. "It's still early, but what I'm hearing is that next year we could have a much larger crop to Mexico. They love our apples."

Baerveldt credits NAFTA with launching the state's apple trade with Mexico.

"It opened up the market for Washington apples," she says. "It is our top export market and we really haven't been able to fully tap into that market."

The apple export market has had its share of bruises.

While Galas and Fujis are especially strong in apple exports to Mexico and are tariff-free, Red and Golden Delicious varieties have experienced a bit more resistance.

About 10 years ago the Mexican state of Chihuahua accused Washington growers of dumping red and golden delicious apples at prices below the cost of production.

The result has been a political see-saw of tariffs. Baerveldt said this past summer the case was forwarded to a NAFTA review panel, which will issue a final verdict on the dispute sometime in the next two years.

Once the tiff is settled and the political waters smooth, Baerveldt said the state's apple exports may grow even more.

"We've been dealing with this for the past 10 years and hopefully once they rule we can put it behind us," she said.

Dave Carlson is president of the state apple commission, and he believes apple exports will continue to grow into the future.

"Mexico is rapidly developing more supermarket chains," he said, noting exports such as Wal-Mart as well as national Mexican chains like Gigante.

"It's a much better opportunity for Washington apples," Carlson adds. "The market is more quality driven."

"Give credit to the growers"

The state's food basket to Mexico contains more than apples, of course.

Other 2006 export figures with Mexico include $1.7 million in cherries, a figure expected to grow by a third in 2007.

That's according to the Washington State Fruit Commission, which reports a 32 percent increase in cherry exports to Mexico.

The commission attributes the growth to currency fluctuation, as well as better product and better marketing of Washington farm produce.

Pears and potatoes are also among key exports.

An agreement was reached in 2004 to open the Mexican market to the first-ever shipment of fresh Washington potatoes. The state's growers shipped nearly nine million pounds of fresh potatoes to Mexico last year.

"It helps to move our economy in the Columbia Basin," said Matt Harris, director of trade for the Washington Potato Commission.

Harris, a Mabton native, said the removal of tariffs on fresh, frozen and dehydrated potatoes has been a boost in trade with Mexico. Figures for 2007 show a 44 percent increase in the value of potato exports to Mexico.

State ag exports in general with Mexico received a boost this past July when Governor Christine Gregoire visited that country on a five-day trade mission.

"We had a very productive week in Mexico," the governor said. "We promoted our quality products and services, while exploring solutions to current barriers in trade-particularly concerning red and golden delicious apples. The livelihood of Washington farmers relies on continued growth in agricultural exports-whether apples, cherries, beef or fresh potatoes."

The governor's visit may have helped, but it comes down to the product in the field and in the market, says Mike Louisell, a spokesperson with the department of agriculture's state office in Olympia.

"The government is a good conduit to promote trade, but you have to give credit to the growers willing to promote their product," Louisell observes.

Momentum into 2008

Speaking of promotion, a contingent of Washington trade representatives was in Seattle earlier this month to shoot three videos promoting Washington produce. The videos will air on a popular cooking show in Mexico.

Local produce isn't the state's only food export, though, as Starbucks is set to open its 50th outlet in Mexico and Costco stores have created a strong presence there.

"We're moving forward and there are many new ideas in marketing," said Jon Sonen, who heads up international marketing for the state department of agriculture. "We're doing great."

Congressman Doc Hastings says he is all for opening more markets for Central Washington growers.

"I tend to be one that believes that we should open up more foreign markets," Hastings says. "What is changing now is that trade agreements in the past were not necessarily beneficial to agriculture. That's no longer the case."

Hastings also advocates a market access program, known as MAP, that opens up foreign markets-including Mexico-for smaller growers. "It allows them an opportunity to market their produce overseas," he said. "Any time we can open more markets, that benefits our ag industry."

All of which means the outlook for produce exports to Mexico should be rosy for the foreseeable future.

"Our exports in food and agriculture to Mexico are up 35 percent in 2007, for a total of about $280 million," Sonen said. "We're charging into 2008 with a lot of momentum going," he added. "I'm very optimistic 2008 will be a good year."



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