(TNS) — The industry at the center of the festival that brings hundreds of thousands of people to Traverse City every summer is petitioning the U.S. government to implement a nearly 650% tariff on dried tart cherries from Turkey.
U.S. tart cherry growers and processors have seen profits slump and disappear as imports from Turkey, the world’s largest tart cherry producer, take over the U.S. market with prices below domestic production costs. U.S. businesses claim Turkey heavily subsidizes its cherry growers and that a hefty levy is needed to level the playing field — or else the U.S. tart cherry industry, about three quarters of which is in Michigan, could evaporate.
“We could lose this industry in the next decade if we don’t have some sort of relief,” said Nels Veliquette, a cherry grower and chief financial officer of Cherries R Us and Cherry Ke. Inc.
Four Michigan cherry processors — Traverse City’s Shoreline Fruit LLC and Cherry Central Cooperative and Frankfort’s Smeltzer Orchard Co. LLC and Graceland Fruit Inc. — along with Utah-based Payson Fruit Growers Co-op make up the Dried Tart Cherry Trade Committee that filed a petition in April through the U.S. Commerce Department and International Trade Commission against Turkey.
The International Trade Commission on Friday is expected to determine if there is a reasonable indication of Turkey injuring domestic producers based on evidence provided by the processors. If it does, preliminary duties could be announced as early as July 18.
The companies allege Turkey is dumping dried tart cherries into the United States at a margin of up to 648.35% above fair value because of a wide array of Turkish government subsidies, including grants, loans, investment incentives, tax credits and land provisions.
The processors must show Turkey materially has injured their business or at least threatens to do so. In 2018, the United States imported more than $1.2 million in dried tart cherries from Turkey, up 259% from 2016, according to to the International Trade Administration.
With Turkey exporting 756 tons of dried tart cherries to the United States in 2018, that’s an average wholesale price of approximately 82 cents per pound. Meanwhile, domestic producers say their wholesale rate is around $4.50, said Veliquette, whose family is one of two that owns Shoreline Fruit, which produces the Cherry Bay Orchards brand of dried tart cherries. In Turkey, dried tart cherries are selling for $3.60 per pound, he added.
The processors invested $80,000 to investigate and gather data on Turkey’s impact on the industry prior to filing their lawsuit, Veliquette said. They expect to spend an additional $1.75 million for the case.
“This is us standing up for a market we built,” Veliquette said. “It’s important for us as an industry to move now. This is not being subsidized by the government. We’re putting our money in what we feel is a cut and dry case.”