Tariff row savages US pecan farmers
OCILLA, Georgia - In the United States, on average, a third of all pecans grown are exported to China. But, for Randy Hudson, a US pecan farmer in the leading producing state of Georgia, the amount is much more: practically all of his crop goes across the Pacific.
"I can tell you this - 99 percent of our production goes to China ... We've had a great working relationship with China over the years," Hudson said. However, the US-led hike in tariffs is threatening to undo all that, leaving farmers like Hudson counting the cost.
On July 6, the US added a 25 percent tariff on $34 billion worth of Chinese imports, claiming that an additional tariff on $200 billion worth of goods is in the pipeline. Beijing responded in kind, hitting US products, including pecans.
"I've just begun a project to expand my storage room and pecan processing power three-fold last year," Hudson told Xinhua. Like most US farmers expanding their business, Hudson is heavily in debt, with the almost $10 million project financed by loans.
Hudson said he was aware of Trump's campaign slogans in 2016, which called for tougher action against other countries that were "treating the United States unfairly," but "we never thought we would reach this level of intensity", said Hudson, whose family has grown pecan for over 150 years.
Pressured by sluggish domestic demand for pecan in the late 1990s, Hudson set out to seek new fortunes in the Middle East, India and China. Unexpectedly, China responded enthusiastically to the product, which was completely new to the market.
Over the following decades, pecan sales grew "exponentially" in China, which allowed Hudson to gradually expand his pecan farm size from a few hundred acres to 2,500 acres.
Pointing to a sizable collection of Chinese souvenirs and gifts in his office, Hudson said he has traveled to China more than 100 times, and had managed to forge strong ties with his Chinese partners.
Now, Hudson sells over $20 million worth of pecan to China every year, yet the newly imposed tariffs will not only put his farm under severe financial strain, but also threaten to halt a booming pecan trade enjoyed by both US farmers and Chinese consumers.
Hudson was not the only one worrying about the impact of the tariffs on farmers and agriculture. A drive around Ocilla, where pecans are most densely grown, will leave you bewildered by acres of newly planted seedlings, he said.
Hudson said the new trees are popular varieties in China, either producing large nuts or giving early harvests that can enter the market just in time for the Chinese New Year.
With the unexpected tariff, all of the efforts are put in jeopardy. Georgia Pecan, a bi-monthly magazine run by a local association, noted in a recent article that US pecans are facing strong competition from other major growers, such as Mexico and South Africa.
"It is obvious in the near future that US growers will have serious competition for a limited Chinese market, with the worldwide production of export quality pecans exceeding the current demands of the China market," the article warned.
Hudson estimated that 30-40 percent of his sales will evaporate, registering a loss of $5 million to $8 million, significantly higher than his profit margin. In addition, imported parts that are crucial to the farming may also become more costly, further squeezing Hudson's margin.
"We're the collateral damage for a much bigger fight," Hudson lamented, saying that repeated appeals to lawmakers were not responded with concrete moves to steer the White House away from imposing tariffs.
"Only those of us who are most directly affected, the hog farmers, the wheat growers, the cotton and peanut growers... All of us are just now beginning to realize that this thing is real and that it's going to impact us directly," he said.
