By BILL O'BRIEN
TRAVERSE CITY -- Area cherry growers and processors are trying to weigh the impact of Mexico's new, 20 percent tariff on maraschino cherries, a tax spurred by a wider trade dispute between the U.S. and its southern neighbor.
Processed cherries were among 90 U.S. products hit with tariffs last week by Mexico in retaliation for the U.S. government's elimination of the U.S.-Mexico Border Truck Safety Inspections Program.
Cherry industry representatives are still determining how the surcharge will impact sales and production of maraschino cherries, but said it's not a good start for a 2009 growing season already challenged by a global recession.
"Mexico is certainly a market for our maraschino cherries," said Glenn LaCross, owner of Leelanau Fruit Co. and whose Buckley plant processes maraschino cherries. "It's not as big as some other countries, but it is a factor."
Lansing-based The Cherry Marketing Institute said Mexico is "by far" the largest export market for maraschino cherries made in the U.S., averaging three million pounds annually over the past five years. U.S. processors of maraschino cherries buy about 100 million pounds of sweet cherries a year from U.S. growers, and the U.S. dominates the global maraschino cherry market.
Josh Reynolds, president of Gray & Co., a maraschino cherries processor with plants in Michigan and Oregon, said the tariff already has held up a major maraschino cherry buy for the Mexican market through a U.S. retailer. It also will drive up retail prices for maraschino cherries for Mexican consumers.
"It's already an expensive product (in Mexico)," Reynolds said. "The 20 percent makes it immediately disruptive, and it makes it difficult to grow the market."
Gray said his company buys about 30 to 35 million pounds of sweet cherries a year from northern and central Michigan. Nearly all of them end up as maraschino cherries or used in candied fruits.
Gray said he's not sure how far the tariff will extend to other cherry products, but will create an opportunity for other countries to introduce their cherry products into Mexico. The Cherry Marketing Institute said competitive products from China and Chile are "poised" to grab market share from the U.S.
"Anybody else can enter that market at a lower price," he said. "Right now, restricting global trade is hurting both sides."
