CONTENTS 4 8 12 16 19
Cherries
23 26 30 34
Apples
38
Agriculture overview Viticulture overview Exports
Labor & immigration Potatoes Hops Juice grapes Organic grapes
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Focus | Agriculture + Viticulture in the Columbia Basin 3
Agriculture powerhouse Crop value high amid trade threats BY ROBIN WOJTANIK
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ersistent issues with international trade have been threatening Washington’s most successful crops. Ongoing trade issues with Asian markets and North American neighbors are “making farmers nervous,” said Michelle Hennings, executive director of the Washington Association of Wheat Growers. “We have to have trading partners,” she said. With $6.7 billion in food and agricultural products sent overseas, the Washington State Department of Agriculture estimates about a billion dollars’ worth of the state’s agricultural exports are at risk from retaliatory tariffs. More than 300 different crops are grown in Washington across nearly 36,000 farms, which keeps Washington atop the list for growing the most apples, sweet cherries, hops, Concord grapes, raspberries, blueberries and pears in the nation. In addition to being one of the
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most productive growing regions in the nation, Washington is known worldwide for its outputs, with a total value of $10.6 billion in 2017, according to the U.S. Department of Agriculture. This is up 4 percent year over year, but just shy of the $10.7 billion record set in 2015. Apples still command the top spot for all agricultural commodities in the state, with a 2017 value of $2.4 billion. Toni Adams, spokeswoman for the Washington Apple Commission, credits progressive growing techniques combined with automation and high-density planting to maintain state dominance for its most famous crop. Apples make up just under a quarter of the state’s total agricultural value and more than double the commodity with the secondhighest value: milk. The demand for Washington apples remains strong and to stay successful, the industry must export the fruit without restrictions. “International trade is a crucial
component. Distributing worldwide helps stabilize domestic supply and demand,” Adams said. The state’s apples are shipped to 60 countries across the globe, with most going to Mexico. A 20 percent tariff imposed in June 2018 was eliminated in midMay but threats of more retaliatory tariffs loom. Apple exports still face a 50 percent tariff in China, and India is threatening to implement new tariffs, as well. Adams pointed to China as another market where retaliatory tariffs are hurting the sale of Washington apples. Thanks to its growing middle class, China had become the sixth largest consumer of the state’s popular fruit. “People there are willing to pay a higher price for a quality product,” said Adams, of the state’s growing market share for international apple exports. Washington attributes much of its success for quality crops to diverse climates and rich soils, but also its large-scale irrigation delivery system to harness water flowing from u
Photo by Karen Sowers To offset the challenges presented with the sale of wheat, some farmers have begun a crop rotation with canola, which produces a vibrant yellow flower as it grows.
mountains and rivers. Irrigation demands can be high for some varieties of wheat, a crop that moved forward two spots recently to round out the top three agricultural rankings in the state, according to 2017 USDA figures. The value of wheat rose 5 percent year over year, to $691 million in 2017. Washington is not just known for its large-scale production of soft white and club wheat, but also maintains a reputation for quality, with standards that can’t always be replicated in Canada or Australia, which are also top wheat producers. “We don’t just make a lot of it,” said Scott Yates, director of communications and producer relations for the Washington Grain Commission. But the price of wheat is falling and trade issues have the potential to “devastate” the industry, Hennings said. The industry is estimated to contribute $1.2 billion in production value to the state’s economy and has created a trade surplus in the past. While Mexico is the top
market for American wheat overall, Japan is Washington’s biggest consumer. “They’re Washington’s most devoted customer,” said Yates, who pointed out that Japan is willing to pay a premium for top quality wheat. A staggering 90 percent of Washington wheat is sent overseas, with $532 million in white wheat exported to spots like Japan, the Philippines and Indonesia. Hennings said its lobbying group has traveled to Washington, D.C., a number of times to educate the Trump administration on the impact trade issues are having on Washington’s wheat industry. Hennings also cited “huge concerns” about the U.S. pulling out of the Trans-Pacific Partnership with Japan and the trade cutoff with China. “China could be an emerging market, but we have zero wheat going there now,” she said. Yates said China bought $66 million in Pacific Northwest soft white wheat between June u Focus | Agriculture + Viticulture in the Columbia Basin 5
Courtesy Washington Apple Commission Apples maintain their hold as Washington’s largest commodity, making up a quarter of the state’s agricultural value at $2.4 billion in 2017.
2017 and May 2018. Because of the tariffs, China is unable to buy any Washington wheat. Officials with the Washington Grain Commission pointed out, “You can’t go any lower than zero.” Wheat is primarily an Eastern Washington crop, with a quarter of the state’s wheat production based in Whitman County, home to the Palouse agricultural region. Whitman County produces more wheat than any other county in the U.S., according to the grain commission, with no single county even producing half of what Whitman County does as a dryland farming area. Combined, Adams and Walla Walla counties grow about a fifth of Washington’s wheat crop. Benton and Franklin counties are less dominant producers of wheat, but combined, still make up about 6 percent of the wheat grown in the state. To offset the challenges presented with the sale of wheat, some farmers have begun a crop rotation with canola seed, which produces a vibrant yellow flower as it grows. 6 Tri-Cities Area Journal of Business
“They’ve told me that growing canola has made them better wheat farmers,” said Karen Sowers, executive director of the newly-formed Pacific Northwest Canola Association. Sowers said farmers who grow canola between their wheat or barley crops don’t just see an economic boost, but usually find benefits like natural weed or pest control, and an increase in their primary crop yield without the need to buy new equipment to grow or harvest canola. “The current price of wheat is not doing anybody any favors,” Sowers said. “Farmers tell me, ‘In four to five years, I make more money off my canola than my wheat.’ ” Production of the state’s canola tripled between 2012-14. Based on the most recent USDA data, the value of canola rose 64 percent from the previous year to $15.1 million. The 2018 USDA forecast is $20.2 million. Nationwide acreage dedicated to canola appears to be decreasing, but in Washington it was up 7 percent year over year, with acreage predicted at 75,000 for 2019, according to the USDA.
Sowers said the number could be as high as 85,000 acres. Either amount still would be the thirdhighest in the nation, behind North Dakota and Montana. Considered an oilseed, canola generally is used for cooking oil, biofuel or livestock feed. A canola seed processor in Warden has encouraged additional plantings of canola by offering Eastern Washington growers a place to send the crop. Sowers also cited the “intangibles” behind the recent boost in canola: “Farmers say it does something to their wheat, ‘I don’t know what, but it does something.’ ” While many states rich in agricultural resources also are dense with industrial farms, this is not the case in Washington, where 95 percent of the state’s farms are family-owned, with a similar percentage having sales of less than $250,000 annually. Trade issues aren’t just affecting agricultural conglomerates, but also smaller farms, totaling fewer than 50 acres. Two-thirds of the state’s farms are below this size. While Franklin County might hold the perception of the area’s agricultural hub, Benton County boasts more farms than its neighbor, by nearly a 2:1 margin. Combined, there are just under 2,400 farms across the two counties, which doesn’t come close to the 3,100 farms in Yakima County alone. Farming and food processing employ more than 164,000 people across the state and continued trade issues have the ability to affect local livelihoods for those in the agricultural industry. “Soft white (wheat) exports are actually up over this time last year,” Yates said. “But prices remain in the doldrums. I like to imagine where prices would be if China was in the market.” l
Fine vines Photo by Andy Perdue The Washington wine industry has blossomed from its beginnings to become a major player in U.S. wine production, and the number of wineries has increased from 300 in the mid-1990s to about 1,000 wineries across the state today.
Wine industry has come into its own BY ANDY PERDUE
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hen a young grapevine begins growing in the sandy soils of Washington’s Columbia Valley, it takes a few years to establish itself and build a foundation of strong roots before producing fruit. After a period known as the juvenile years, the vines mature, and with the right care and coaxing, they will produce wines with the potential for greatness. The past two decades have been that period of maturing, and now the hard work is paying off with an industry that is beginning to reveal its full potential, just as mature vines can. Twenty years ago, the Washington wine industry was in a juvenile stage. In the mid-’90s, it was spunky with ambition and 300 wineries scattered across both sides of the Cascade Mountains and a few thousand acres of vineyards, primarily within an hour’s
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drive of the Tri-Cities. Today, the Washington wine industry is on the verge of boasting 1,000 wineries, 16,000 acres of vineyards, 15 federally-recognized American Viticultural Areas, and a reputation for quality that far exceeds the boundaries of the Pacific Northwest. Washington stands firmly in second place in U.S. wine production, well behind California in production, if not fame. Washington makes 7 percent of the nation’s wine. Some in the Golden State have taken notice and have invested in Washington wine. Meanwhile, the Washington wine industry is going so strongly, it’s on the verge of displacing apples as the state’s most important agricultural industry, said Steve Warner, director of the Washington Wine Commission in Seattle. The state apple industry is worth about $2.4 billion, while
the wine industry is worth about $2.1 billion, Warner said. He estimates the wine industry will overtake apples in the next 12 to 18 months. In an ironic twist, two older, larger vineyards in Finley were recently sold and the vines torn out to make way for Cosmic Crisp, a new apple variety that is scheduled to go into the retail market this fall. Why is it important that wine becomes our leading agricultural industry, supplanting apples? Washington wine has slowly been making its reputation on the world wine stage, not only for quality but for value. Taking its place ahead of apples means more attention from our leaders in Olympia, as well in the other Washington. And this could spur more attention for growth opportunities, more support from within the state to bring more tourism, more jobs. Earlier this year, California u
wine giant Gallo bought Hogue Cellars in Prosser, one of the state’s top 10 producers from Constellation Brands, which bought Hogue in 2005. Constellation, based in New York, still has a large stake in Washington, having bought Charles Smith Wines in Seattle in 2016. The Hogue acquisition expands Gallo’s Washington footprint. The Modesto-based company bought Columbia Winery in Woodinville in 2012, giving the longtime winery a brand makeover, expanding production and increasing distribution nationwide. Putting Hogue on a similar path isn’t unexpected. “The force of Gallo on not only the national but the international stage out there saying that Washington wines are amazing and, to the point that they’re adding to their portfolio, I think that’s a win,” Warner said. “Gallo is en-
gaged in our marketing programs locally and nationally. So I think it’ll be a positive move for us.” Not every California winery to come to Washington is a megaproducer, however. In 2013, Napa Valley darling Duckhorn Vineyards decided to create a Washington brand, called Canvasback. Duckhorn, started in 1976, has serious winemaking chops, with its 2014 Merlot named No. 1 wine in the world by Wine Spectator magazine. Duckhorn came to Washington intent on creating a luxury brand based on cabernet sauvignon from Red Mountain. It planted 20 acres of grapes high up the slope of Red Mountain, bought grapes from top Red Mountain vineyards and hired a local winemaker to produce the wines in Walla Walla. What the folks at Duckhorn found in Washington was ample,
affordable land, plentiful water, abundant sunshine and friendly, helpful people, a combination not often found in Napa Valley. What started as one wine sold in every state has been expanded to 10 wines that will be released over the next year. The winery also opened a tasting room south of Walla Walla near MiltonFreewater, Oregon. The quality of wines has not only driven increased production of its Washington wines, but also the expansion of the brand and tasting room, said Carol Reber, senior vice president of marketing for Duckhorn. “The wines that are coming out of Washington overall are remarkable, noteworthy and wines of distinction,” she said. “But the wine community in Washington is really special and something that we’re excited to be a part of. When you go to u
Focus | Agriculture + Viticulture in the Columbia Basin 9
Photo by Andy Perdue Washington’s environment sets the foundation for growth in the wine industry. Not only has the number of wineries grown, state law creates space for further growth by allowing each winery to have four tasting rooms.
a new place you get a real feel for the people and the level of excitement and the level of wanting to work together to bring something special to the rest of the country and perhaps the rest of the world. And that feeling is really palpable in Washington,” Reber said. The new wines, she pointed out, will be sold primarily to wine club members and tasting room visitors, with little going into general distribution. Known as “direct to consumer,” this segment of wine sales is key to winery success. The more wine a winery sells direct to consumers, the more money and profit a winery keeps versus selling through a distributor for retail stores or restaurants. Currently, wineries sell about 77 percent of their wine directly to consumers. That means a lot more profit going to small business owners. Part of this is helped by the state Legislature, which now allows a winery to have up to four tasting rooms. This means a winery could have a presence in Seattle, Spokane, 10 Tri-Cities Area Journal of Business
Leavenworth and in the TriCities, with more opportunities to sell directly to consumers. All of this adds up to mean that Washington’s wine industry still has room to grow, regardless of the 1,000 wineries. It all begins with the grapes, that raw material that goes into making the wine. Washington has no shortage of sunshine, no shortage of space and no shortage of water. Getting ripe isn’t an issue, not with the warm summers and temperate falls. Consistency is key to winemaking success, and that is plentiful in the Columbia Valley. Retired Ste. Michelle CEO Ted Baseler believes Washington has the capacity for 200,000 acres of vineyards. With that in mind, there’s much more room to grow. Where will all this wine be sold? A lot of it stays in state and a lot is sold throughout the country. And a surprising amount is going to export markets. Washington wine, it turns out, is big business beyond our borders.
Canada is a big market, which makes sense. Washington wine ends up in Europe. Asia is big for red wines right now. South Korea, it turns out, has a thirst for Washington wines. Sales there have grown 200 percent in the past three years, turning South Korea into Washington wine’s No. 1 international market. The Wine Commission in Seattle helps wineries work through the process of exporting, especially to Korea, Japan and China. Warner now has 40 Washington wineries exporting internationally. These wineries are doing the heavy lifting, plowing the road for future wineries. “If your strategy is to compete in or be known as one of the better or the best or one of the top wine regions in the world, you’ve got to compete on the global stage,” Warner said. “And so we’re taking who wants to be out there and competing and creating opportunities.” All of this means bright opportunities for Washington wine moving forward. l
Turbulent trade
Courtesy Washington Grain Commission
State’s exports remain steady BY JENNIFER L. DREY
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ashington’s agricultural exports held steady in 2018, demonstrating both strength and missed opportunity, as some industries suffered under new trade policies while others made gains during the year. Exports of Washingtonproduced agricultural goods totaled $6.7 billion in 2018, the same amount exported in 2017. The flat growth followed a roughly 10 percent increase in exports of Washington-produced agricultural goods from 2016-17. “The overall message of the year was lost opportunity because typically we are expanding exports and exports are growing,” said Rianne Perry, international marketing program manager for the Washington State Department of Agriculture. But 2018 was different due to retaliatory tariffs imposed by China in the ongoing trade war, the United States’ lack of trade agreements with countries that formed the Comprehensive and Progressive Trans-Pacific Partnership, or CPTPP, and ongo-
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ing negotiations for a new trade deal in North America, each of which took their tolls on various industries. China remained the third largest export market for Washington-produced agricultural goods in 2018, but the dairy, wheat, apple and cherry industries were among those that took significant hits in the Chinese market. Dairy exports to China dropped by 72 percent from the prior calendar year, while wheat exports to China dropped by 81 percent, according to the state Department of Agriculture. No wheat has been exported to China since May 2018. “(China) was a growing market so we were excited about that, and it was going to be something we could look forward to,” said Scott Yates, director of communications and producer relations for the Washington Grain Commission. “At the same time, I do believe there will be an agreement, but the timing is crucial because it can’t go on forever.” About $66 million in soft white wheat was exported to China
from Washington in the year since China stopped buying U.S. wheat. For the cherry industry, which reported a 32 percent decline in exports to China in calendar year 2018, the drop followed significant growth in the prior year. China was the top export market for Washington cherries in 2017, purchasing $99.7 million during that calendar year, as the buying power of its middle class continued to expand. Cherry exports were up by 75 percent in 2017 over 2016. “Overall, the sectors that were on the tariff list did decrease their exports to China, some of them pretty substantially,” Perry said. However, there were exceptions. Washington seafood, hops and frozen french fries all increased their exports to China in 2018, despite being targets of Chinese tariffs, Perry said. One possible explanation is that such niche products aren’t available in the same quantity and quality from other markets, she said. Chris Voigt, executive director of the Washington State Potato u
Commission, said the growth of U.S.-based quick-serve restaurants such as McDonald’s and KFC helped keep market demand for frozen french fries strong both domestically and in China during 2018, despite tariffs being imposed during the year. Washington exported $798 million of frozen french fries to China in 2018, up from $756 million in 2017. But like many of the other industries that rely on the export market for their agricultural goods, the retaliatory tariffs being imposed by China are merely one among a number of trade concerns, Voigt said. For potato growers, the bigger concern is that the United States gets a trade agreement in place with Japan, which always has been a top market, not just for potatoes but for Washington’s agricultural products as a whole. Japan is now part of the CPTPP, a trade agreement that will gradually lessen tariffs for the 11 countries that signed the deal, which the United States did not sign. Washington exported $1.1 billion of agricultural goods to Japan in 2018 but is likely to see its market share erode in some sectors as the tariff reductions included in the CPTPP move forward. Japan also is a top market for Washington wheat, and that industry is hopeful that a bilateral agreement with the country will be in place soon, Yates said. The wheat industry was able to maintain exports of soft white wheat to Japan in 2018 because of the specialty nature of the crop, but another year without an agreement would likely hurt, he said. “U.S. negotiations for a bilateral trade agreement with Japan have begun to take place, and seeing an agreement there is of the utmost importance,” Perry said. For the Washington apple u
Photo by Kimberly Teske Fetrow
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industry, which exports a third of its fresh apple crop, ongoing trade negotiations in North America have been the primary concern in the past year, said Todd Fryhover, president of the Washington Apple Commission. U.S. apple exports to its top market Mexico were hit with a 20 percent tariff in June 2018 after the United States imposed tariffs on imports of Mexican steel and aluminum. The U.S. and Mexico reached an agreement in mid-May to eliminate them, but threats of more retaliatory tariffs loom. Apple exports still face a 50 percent tariff in China, and India is threatening to implement new tariffs, as well. The Washington Apple Commission has responded by focusing on trade promotions and by diverting some volume to new markets such as Indonesia, Thailand and Vietnam. “As an industry, we’re always looking at these different alternatives to maximize revenue for growers and trying to stay away from those markets that have the least return, whether they are impacted with a tariff or not,” Fryhover said. Despite the current challenges, Washington continues to build on its strengths and invest in its export market. The Northwest Seaport Alliance, which manages the marine cargo business and facilities for the ports of Seattle and Tacoma, is preparing to begin a $500 million modernization project that will allow Terminal 5 at the port of Seattle to more quickly and efficiently handle the largest marine cargo vessels being deployed on the Asia-Pacific trade route. Eight of the top 10 markets for Washington’s agricultural exports in 2018 were in Asia. “The exporter community in Washington state relies on The 14 Tri-Cities Area Journal of Business
Courtesy Northwest Seaport Alliance Domex Superfresh Growers of Yakima exports fruit grown by farmers in the region.
Northwest Seaport Alliance to get our goods to foreign markets,” said Mark Anderson, CEO and president of Ellensburg-based Anderson Hay & Grain Co. Inc., in a statement. “Without a robust import trade, our export trade becomes much more difficult. Investments like the Terminal 5 modernization end up supporting well-paying jobs all across the state.” Construction on Terminal 5 will begin this summer and will be carried out in two phases, with the first phase expected to be complete in the spring of 2021 and the second in 2023, said Katie Whittier, spokeswoman for Port of Tacoma and The Northwest Seaport Alliance. The U.S. Small Business Administration’s Seattle District Office also continues to support and invest in Washington’s export market across all industries. The agency is the coordinating member of the 12-agency Washington Export Outreach Team, or WEOT, an active consortium
of organizations working to assist Washington businesses with expanding into international markets or further growing their presence in them. WEOT, which hosted a halfday, “Grow Your Business Internationally” export workshop at the Tri-City Development Council in May, provides resources including technical assistance and potential funding for small businesses to enter or further expand into foreign markets, said Kerrie Hurd, district director for the U.S. Small Business Administration, Seattle district, which covers most of Washington and a part of Idaho. More information about WEOT is available by contacting the U.S. Small Business Administration’s Seattle district offices or any other agencies involved with WEOT. “I do feel like this is an environment where there is opportunity. It’s just that people have to know the resources to go to and be able to take advantage of those opportunities,” Hurd said. l
Fruitful summer Courtesy Northwest Cherry Growers The Washington cherry crop is consistently among the top 10 agricultural commodities in the state with predictions of this year’s crop reaching 25 million boxes of fruit.
Cherry crops a sweet success BY ROBIN WOJTANIK
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he 2019 Washington cherry crop is expected to reach nearly 25 million
boxes. These initial estimates come from about 2,100 cherry growers who are part of the Northwest Cherry Growers/Washington State Fruit Commission, a fivestate group covering orchards in Washington, Oregon, Idaho, Montana and Utah. Before cherries are picked, “there are still plenty of opportunities to have a wreck,” said Bill Michener, who has a small cherry orchard on his farm in Grandview. “It should be a fantastic crop,” said James Michael, the Washington State Fruit Commission’s vice president of marketing for North America. One of the gauges of a successful crop is the number of
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flower blooms. A recent year that saw a record number of cherries included four to six flowers per bud, compared to a two- to threebloom average. “This year, we’re seeing more twos than fours,” Michael said. “The crop will be spread widely throughout the trees and the fruit will be good dessert quality.” Northwest cherries boast large, firm fruit, with 80 percent coming in at one inch in diameter or larger. This is superior to some of the nation’s other cherry markets. “It’s important we maintain this size while maintaining a world-class product,” Michael said. “It’s not just a processed product. It’s still a cherry. It’s a taste of summer.” Producing more than 20 million boxes in a season has become the norm after Washington first broke that threshold in 2009. A box holds 20 pounds of cherries. American cherries are affected
by 40 percent retaliatory tariffs placed by China, a country that had grown from receiving its first shipment of Northwest cherries 13 years ago, to becoming the crop’s largest export market as recently as 2017. That was before sales suddenly dropped due to the trade war. Industry estimates say Chinese tariffs cost cherry growers $96 million across Washington, Oregon and Idaho just last year. Michael said Northwest growers export about 30 percent of their crop each year and despite the retaliatory taxes, 30 percent still left the country. “One million boxes that would have gone to China were shipped elsewhere in the world,” Michael said. This included other markets like South Korea, where Washington cherries are increasing in demand. It’s critical cherries have an intended destination since, u
unlike other crops, cherries are highly perishable and need to be kept cold throughout the process of getting them from the tree to consumer. The stone fruit must be picked, packed and shipped within 24 hours, holding the fruit at 32 degrees while it’s prepped for boxing. Labor demands also can be a threat to growers when it’s time to get the fruit off the trees. Local cherry farmer Patrick Sullivan said he lost more money last year from a labor shortage than he did from the impact of Chinese tariffs. “I was short on labor last year and the years before that also. We spend all this money developing this crop, getting it to harvest and then you don’t have somebody to pick it,” he said. Sullivan is watching potential changes to the H-2A program, which provides visas to foreign nationals to serve as temporary agricultural workers. Sullivan called the program “pretty essential” and said Washington has had trouble in the past establishing its own residential workforce. He is concerned about the prospect of additional fees connected to the use of the visas. “If that’s the case, I’ll have to rely on local and some California labor for harvest,” he said. The labor demand for cherries is huge for the crop that’s consistently part of the top 10 agricultural commodities in Washington, valued most recently by the U.S. Department of Agriculture at $479 million for 2017. This was a 4 percent drop from the previous year’s bumper crop when cherries were the sixth highest crop in the state, but still a significant increase from the $447 million value in 2015. The USDA’s 2018 crop overview for the state showed a sweet cherry production of 215,000
tons, which generally are eaten fresh, and include varieties like Bing, Rainier and Chelan. The state also produced about 23.8 million pounds of tart cherries, which often are used for juice. The Northwest cherry season begins in early June and runs through the end of August. This year’s season the trees were later to bloom due to the extended amount of time snow was on the ground in early 2019, but Michael said the crop gained about 10 days on growth due to the steady spring warmth. Thanks to microclimates within the Northwest, cherries are able to ripen at different times, which can lengthen the overall season. Michael said growers need to be risk-tolerant if they’re going to grow cherries — known as a gambler’s crop. “Mother Nature can give or take away a quarter of our crop in one weekend,” he said. He said weather remains the greatest threat to cherry farmers when compared to other external factors, like labor issues or trade wars. “There are a lot of other crops that will let you sleep better at night,” Michael said. Though cherry growers might suggest the key to a more restful sleep is consuming some of their fruit about an hour before bedtime. Sleep cycle benefits from cherries were cited as part of a larger study commissioned by local growers to tout the health benefits of the fruit. The industry group was behind a paid review of 30 previous studies which summed up various nutritional claims for sweet cherries, including anti-inflammatory benefits, reduction of gout attacks and lowering blood pressure. The study pointed to the fruit’s high concentrations of nutrients like fiber, vitamin C and potassium. u Focus | Agriculture + Viticulture in the Columbia Basin 17
Courtesy Northwest Cherry Growers Rainier cherries are among the sweet cherry varieties grown in Washington that usually are eaten fresh.
More than 42,000 acres of land are dedicated to growing cherries in Washington. Michael said a lot of families in the business, like the Sullivans, have been growing cherries for years. There still are new growers in the industry, some intrigued by the volatile crop and others
18 Tri-Cities Area Journal of Business
interested in the disruptions new technology can bring to the field. Sullivan’s family has been growing cherries since the 1960s. The three generations of farmers have 160 acres north of Pasco “We’re not getting rich, but we’re supporting our livelihood,” he said.
Still, Michael said growers have to prepare for a total crop loss once every four years. “You’re lucky if you break even because whatever it is doesn’t come close to what you owe the bank,” he said. When asked if he ever considers getting out of the business, Sullivan laughed. “I think about it daily,” he said. He said the last five years have been especially difficult due to rising costs for everything from fuel, labor and chemicals. “Our returns stay pretty much the same,” he said. Sullivan said big retail stores have more ability than they once did to push around the little guys when it comes to pricing, but he stays with the industry, believing in the strength of the product. “The Northwest raises the highest quality cherries in the nation, if not the world,” he said. l
Apple action
New variety coming as tariff threats loom BY ROBIN WOJTANIK
A
Courtesy T. DuPont/Washington State University Tree Fruit Extension
s the state’s apple growers strategize to overcome international tariffs, they’re also looking ahead to introduce to the world a highlyanticipated variety — the Cosmic Crisp. The end of the 20 percent tariffs on apples shipped to Mexico in mid-May was welcome news to the state’s apple industry, which saw overall exports down 32.7 percent over the previous season. But more retaliatory tariffs loom. “We are facing tariff situations in our top apple markets,” said Toni Adams, spokeswoman for the Washington Apple Commission. This includes Mexico, where more Washington apples are sent than any other country worldwide. Mexico leveled a 20 percent tariff on Washington apple imports in June 2018 in response to a 25 percent tariff placed on steel and aluminum products brought into the U.S. from Mexico. It amounted to a hefty blow, as Mexico averaged a demand of 13 million boxes of fresh Washington apples annually in recent years. Apple exports still face a 50 percent tariff in China, and India is threatening 25 percent tariffs. The potential for new import taxes on apples also sent to Canada is something Adams called “intimidating.” The country is the second-largest importer
of Washington’s fresh apples, and considered an extension of the domestic market due to its proximity. Our neighbor to the north is Washington’s largest export destination for organic apples. As demand increases, growers in the state produced about 16 percent more organic apples than the previous year. As the industry depends on international trade, a dozen people around the world are focused on marketing Washington apples. With 2019’s projected apple crop forecast to come in 12 percent lower than last year’s and recent exports to Mexico down 29 percent, the industry has cause for concern. “We’re not sure if the reason is just crop volume or because of the tariffs,” Adams said. Knowing that retaliatory tariffs are being placed on apples following U.S. actions against other countries, the federal government handed out money to groups like the Washington Apple Commission to help promote the fruit. The commission received $8.4 million from a total of $200 million in available grants. This was part of an Agricultural Trade Promotion program from the U.S. Department of Agriculture designed to mitigate harm to the industry. The money is considered a one-time, nonrenewable allocation. Adams said the grant program is “pretty rigid” on how u
Focus | Agriculture + Viticulture in the Columbia Basin 19
the money can be spent, as it was approved based on the market it’s intended for and also by individual activity. The commission will use some through a market facilitation program that includes direct payments to farmers and also a buyback program to give apples to schools. In growing markets, the commission will use the grant to increase consumer advertising, with a goal of building on the reputation of U.S. products being “healthy and safe,” especially to customers in southeast Asia. The grant money will be distributed to the commission in 2019 and spending is expected to be spread out over two years. One of its uses will be to market the highly-anticipated Cosmic Crisp apple variety, which is set to be released in fall 2019. 20 Tri-Cities Area Journal of Business
It is a new variety of apple created and patented through Washington State University’s apple breeding program. The apples will be harvested in late September and early October but won’t arrive at stores until Dec. 1. “Cosmic Crisp tastes better when it sits for a while,” said Kathryn Grandy, spokeswoman for the company hired to promote the new apple. “It’s harvested at one starch level and then shipped at another starch level.” Grandy said the current target date is considered “conservative,” and it’s possible the apple could ship sooner once it’s re-evaluated after harvest. “We want to make sure it’s the best it can be,” she said. The apple is described as “remarkably crisp, sweet, sharp,
tangy and unbelievably juicy.” It is a cross between the Enterprise and Honeycrisp varieties and promised not to brown easily. The projection for available boxes of Cosmic Crisps is 500,000 in the first year, Grandy said. Adams expected most of those apples to be gobbled up by domestic demand before another two million boxes are expected to go on the market the following year for apples harvested in fall 2020, with a whopping 17 million boxes grown in five years’ time. As a means of extending the apple’s dominance right from the start, Grandy said it’s “far more than just major retailers who have been sent samples” to build immediate interest in the fruit. Part of the federal grant money awarded to the apple u
commission also will be used for sampling Cosmic Crisp in the Canadian market, where it’s expected to take off by spring 2020. Adams said the process to develop the new variety has been “unprecedented,” so the actual volume and demand are unknown factors. Washington growers have the exclusive license for the first 10 years. Despite the growing excitement for a new apple, the Red Delicious variety still reigns supreme for global apple demand. “It’s definitely an export-heavy variety as part of many gifting traditions,” Adams said. “Red Delicious are always going to be a popular variety that people rely on for its shape and color.” India, in particular, is a big importer of the variety. Of the eight million Washington apples
shipped to India last year, seven million were Red Delicious. As the state’s top apple, Red Delicious accounted for a quarter of the state’s total apple shipment in the 2017-18 growing season, followed by Gala apples at 23 percent. This amounts to about 1.3 billion pounds of Red Delicious apples, filling 33 million boxes. This season’s entire crop is projected at 118 million boxes, with about 40 pounds to a single box. The crop is down slightly from the previous season’s 133 million boxes. About 1,300 growers in Washington are responsible for 3 percent of apple production across the globe. Adams credits the “ideal environment” found in Washington for the success of its apple industry, citing a dry, arid climate that keeps pests down, combined
with nutrient-rich soil, a strong water supply and “progressive” growers. Two out of every three apples produced in America are grown in Washington. While about a third of the fresh apples grown in the state are shipped out of the country, this still accounts for about 90 percent of all U.S. apple exports. Adams calls international trade a “crucial” component of the success of the industry, with worldwide distribution helping to stabilize the domestic supply and demand. Still, there remains a marketplace described as “highly competitive,” and Adams emphasized the continued mission of the apple commission to market the fruit, despite the trade threats, as a vital key to its continued success. l
Focus | Agriculture + Viticulture in the Columbia Basin 21
Looking for laborers
Courtesy Andréa Johnson Photography/Washington State Wine Commission Farmers’ participation in the H-2A temporary agricultural worker program has increased 1,000 percent in 10 years, while federal funding has remained flat. A legislative advisory committee will review the budget over the next two years.
Guest worker program seeks funds BY JENNIFER L. DREY
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ith a growing number of Washington farm owners turning to the H-2A guest worker program to meet their labor needs, the cost of administering and providing oversight of the program now exceeds the federal funding provided for it. It’s a scenario that pushed the state Employment Security Department to turn to the Legislature this year for help. Use of the temporary agricultural worker program, which allows agricultural employers to legally use foreign labor to temporarily fill employment gaps, has increased by more than 1,000 percent since 2009, while the federal dollars to administer the program have remained flat, according to the Employment Security Depart-
ment, which processes H-2A applications, as well as partners with other state agencies to conduct field checks and other forms of oversight. The state Legislature responded to the situation by passing E2SSB 5438 in April 2019, legislation that established an Office of Agricultural and Seasonal Workforce Services within the Employment Security Department, as well as authorized the agency to create a 12-member advisory committee that will take two years to review budget, procedures and policies related to administering the program. The original version of the bill looked to gain additional funding by imposing a state fee on farmers who use the H-2A program, but that fee was later removed after pushback from farmers and in-
dustry groups. Instead, the Legislature authorized the Employment Security Department to spend about $3.5 million from another account to address the needs during the two years of the panel review. However, that funding is not a sustainable solution, said Suzi LeVine, Employment Security Department Commissioner. During its two-year tenure, the advisory committee will further consider the cost of the program and provide key advice as legislation is implemented. The committee will include agricultural worker and employer representatives, as well as officials from other state agencies that the Employment Security Department partners with to support the agricultural sector. “This bill helps us better implement the program to meet the u
Focus | Agriculture + Viticulture in the Columbia Basin 23
needs of farmers, farmworkers and the people of Washington state overall. It brings the voices of the farmer and farmworker communities into the room to advise the program, ensures better oversight in the fields and organizes our resources more efficiently to deliver a win-win scenario for our state,” LeVine said in a statement. The bill also sheds light on the severity of the agricultural worker shortage in Washington, said Bre Elsey, associate director of government relations for the Washington Farm Bureau. The Employment Security Department expects Washington growers to request about 30,000 temporary agricultural worker visas this year, a figure that highlights the severity of the worker shortage in the state, she said. “I think a lot of folks are just unaware of how big the situation is with labor and with agricul-
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ture,” Elsey said. “This program allows us to find those 30,000 workers so we can harvest the food that everybody eats or else we just don’t harvest it.” Even more so, the bill sheds light on a misguided federal funding structure under which the federal government does not grant money to states in a manner that scales the funds to need, she said. Washington is the third largest user of the H-2A visa program but receives one of the lowest amounts of federal funding to implement it. Figures provided by the Washington Farm Bureau show that the state received $19.97 in federal funding per capita in 2016, while Rhode Island, the state that used the lowest number of H-2A workers that year, received $19,036 in federal funding per capita that year. Washington had 13,689 H-2A
workers in 2016, while Rhode Island had four. However, charging farmers a fee to bridge the funding gap would make it harder for small farms to compete for limited local labor, while having little effect on the largest farms, Elsey said. “There’s really large unintended consequences when you mess with the H-2A program. The people who are impacted the most are not the big corporations that can afford the inflated wages and can afford to use the H-2A program,” she said. “It’s the little farmer that you were trying to save ends up not having any labor.” In its current form, employers using the H-2A program spend about $766 per worker on application fees alone, according to the Washington Policy Center. They are additionally obligated to pay all of their farmworkers $15.03 per hour, rather than the state u
minimum wage of $12, and they have to provide housing for workers and cover other costs including travel expenses, food, child care and other social services. “The H-2A program is incredibly expensive already and it is a last resort for farmers and ranchers. They are not seeking H-2A workers first, they’re seeking them last, so adding additional fees to what is already an expensive program essentially prices ag labor out of being an option in Washington state,” said Pam Lewison, agricultural research director for the Washington Policy Center. By providing qualified workers who are guaranteed to stay for a predetermined length of time, H-2A serves as an insurance program that guarantees work for both sides, Lewison said. But Andrea Schmitt, a farmworker attorney with Columbia Legal Services, believes that provision of guaranteed labor can actually create an unfair work structure and power imbalance between the employer and employee. As guaranteed laborers who have their visas tied to their employer, H-2A workers are especially vulnerable to retaliation if they voice complaints, she said. That retaliation can be immediate or it can be more subtle, sometimes coming in the form of an employee being marked as a “trouble maker,” rendering it virtually impossible for them to work under the program in the future. “Some of these companies are scary to people. Beyond not giving work, people feel intimidated by the degree of control that the companies end up having in communities where huge percentages of the people are working on H-2A visas,” Schmitt said. For that reason, it is crucial
Courtesy Washington Apple Commission The Washington Policy Center reports a shortage of laborers on Washington farms, especially when it comes to labor-intensive jobs such as harvesting apples.
that the Employment Security Department have adequate funding to carry out oversight of the program, she said. In its current form, the department is responsive to complaints but may not be catching situations where H-2A workers are too intimidated — or don’t know how — to file a complaint. “What you have to have is people who can affirmatively get out there and in a culturally appropriate way build trust with the guys who are working in these places and actually figure out whether there’s anything wrong because they’re not going to volunteer that information the first time you talk to them for five minutes,” she said. Columbia Legal Services was supportive of the original H-2A bill that included a state fee to be charged to employers. Although not supportive of a
user fee, the Washington Farm Bureau also agrees that adequate funding is crucial to proper oversight and administration of the program. The agency is hopeful that the new advisory panel will provide a chance for various groups to rally behind the common goal of pressuring the federal government into allocating more money to the state to administer the program. If a funding solution isn’t determined during the advisory committee’s two-year tenure, the topic of the state fee likely will be revisited, Lewison said. In the meantime, stakeholders said they view the creation of the working group as a positive first step toward beginning to address the problems. “We’ve got to be talking about it because it shows no sign of slowing down in terms of growth,” Schmitt said. l
Focus | Agriculture + Viticulture in the Columbia Basin 25
Popular potatoes Courtesy Washington State Potato Commission The demand for frozen potato products such as french fries and tater tots has increased so much that the Washington Potato Commission says that overseas exports have been rationed. The state’s potato farmers grew 10.5 billion pounds in 2018.
Spuds stay big business for state BY KEVIN ANTHONY
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he sweetest words a potato farmer in Eastern Washington can hear aren’t about crop yields or perfect weather or the opening of new processing plants. Nah. What really rings golden is: Taco Bell is bringing back Nacho Fries. Or: McDonald’s now has allday breakfast. And then there’s “loaded” fries, those deep-fried potato strips slathered in all manner of toppings, from cheese to bacon, that are all the rage in fast food. Yes, these tasty taters are music to the ears of Eastern Washington potato farmers, the biggest suppliers of frozen french fries,
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tater tots and those little hash brown patties Americans can’t stop ordering with their all-day breakfasts. “Whoever thought that dipping french fries in cheese sauce …?” pondered Chris Voigt, executive director of the Washington State Potato Commission. Demand has been hard to meet. “Literally, the last five years, customers overseas have been rationed. We have not been able to meet the tremendous demand overseas” because of the increased domestic demand. Processors are expanding, and that’s good, but it also can be challenging for us, too,” he said. It’s big business. Washington farmers grew 10.5 billion pounds of potatoes on
165,000 acres in 2018, worth $700 million. Processors take those hundreds of millions of dollars of potatoes and turn them into billions in frozen product. The entire industry is worth about $7.4 billion to the state, Voigt said. McCain Foods recently announced a $300 million expansion to its Othello plant, which will give the Columbia Basin another 14 potato processing lines. The addition, expected to be completed in 2021, will add 180 jobs and require an additional 11,000 acres of potatoes. And it comes on the heels of Lamb Weston opening new plants or lines in Boardman in 2014, Richland in 2017 and Hermiston this year. u
“Guess what?” Voigt asked. “We’re out. We can’t grow any more potatoes.” Voigt went on to add a caveat to his comment. Eastern Washington growers can’t get there … yet. It’s not as simple as planting more acres, he said. Potatoes can’t be grown in the same field year after year. They need a four-year rotation: grow potatoes one year, then switch to another crop for three years, then get the potatoes planted again. The biggest reason for the rotation is fungal growth. Verticillium wilt is a dire concern. Also, because of the huge investment to get started — tens of millions of dollars of specialized equipment to plant and harvest potatoes — don’t expect a sudden influx of new farmers breaking ground in new areas. “We think we’ll see some increases in acres,” Voigt said, “but it will put pressure on rotations.” The big push now is figuring out how to increase yields and possibly find a way to shorten the rotation. In other words, soil management. In that vein, farmers and processors are working with Washington State University, investing $3 million to aid in research. Voigt said every farmer can tell the same story: plant in a field that hasn’t grown potatoes in 10 years, and the return is huge. Come back three years later, and it’s down a bit. Same thing three years later. “How can we replicate that field that has not had potatoes in it for 10 years?” he asked. The belief is it boils down to microorganisms — bacteria, fungi and the like. Think of it like probiotics in the human digestive system. The push is to find the right “yogurt” to help make those 10-year yields occur more frequently.
The other area of focus is irrigation: more potatoes need more water and that water comes from the Columbia River. Voigt said the industry is working with state and federal lawmakers in this area. Last year was a “disappointing” year for Eastern Washington growers. Disappointing in that it didn’t turn out to be the huge bumper crop expected after such a great start to the growing season. “It didn’t turn out nearly as well as we had hoped and thought it was going to do,” said Dale Lathim, executive director of Potato Growers of Washington, as well as president of the Potato Marketing Association of North America. “It was shaping up to be the best crop ever. However, the heat and the smoke (from wildfires), all those things have impacts.
You can’t put a finger on any one thing, but the full-season varieties harvested in September and October, in some cases, were disappointing. Not bad, just disappointing.” When it comes to potatoes in the Columbia Basin, “disappointing” is a relative term. “When we talk about having an off year,” Lathim said, “the rest of the world is hoping for that as their best year. It wasn’t the economic home run that we had hoped. But there were a lot of singles and doubles.” This year’s crop is taking a different path from last year’s. The season started late because of all the snow in January and February. Homeowners may be able to shovel their driveway, but that doesn’t work so well in the fields. “Usually we start planting the crop in the latter few days u
Focus | Agriculture + Viticulture in the Columbia Basin 27
“ ” I’ve never seen another industry like the potato industry.
-Dale Lathim, executive director Potato Growers of Washington
Courtesy Washington State Potato Commission A rough winter with heavy snowfall in January and February pushed back 2019’s potato crop planting until mid-March. Despite a delay of several weeks, no major losses are expected as 90 percent of the tubers go to area processing plants.
of February, and by the first of March you’re going,” Lathim said. “This year, I don’t believe a single potato was put in the ground until the 18th or 20th of March, a good full three weeks behind.” What really threw farmers for a loop was that those closer to Othello were planting sooner than those near Pasco — an unheard of schedule. Though it sounds like a dire forecast, the weather broke, temperatures hit above normal later in the spring and — very importantly — there were a lot of warm nights. Suddenly three weeks late became five to seven days behind schedule. But what really eases any 28 Tri-Cities Area Journal of Business
weather-related pain is the fact that 90 percent of the potatoes grown in the Columbia Basin go to processing at one of the 13 (soon to be 14) plants in the area. The processors anticipate delays and move back startup times, Lathim said. Though there likely is no bumper crop, major losses, if any at all, are unlikely. That’s because for the farmers and the processors, it’s in their own best interest for each to succeed. “The potato industry is unique,” Lathim said. “It’s a symbiotic relationship between the growers and the processors.” It’s simple, really. Farmers have tens of millions
of dollars invested in equipment that does one thing and one thing only: plant and harvest potatoes. Processors have hundreds of millions invested in equipment that does one thing and one thing only: process potatoes. “I’ve been in the industry for 26 years, and I’ve been all over the world in agriculture,” Lathim said. “I’ve never seen another industry like the potato industry, especially here in the Columbia Basin.” Because of the relationship between processors and farmers, and the world’s seemingly endless fascination with frozen potatoes, the trade battles and tariffs in recent years haven’t taken much of a bite out of the industry’s bottom line. Any international loss of market was easily displaced by domestic demand — thank you Nacho Fries and all-day breakfasts. Also, despite tariffs, the international market is still growing — exports to China are up 6 percent, Voigt said. However, the European Union’s exports have increased by 19 percent, so competition is growing. Still, Voigt said, Columbia Basin growers have an edge — a Walmart-like edge. “We have the highest yields in the world,” he said. “That makes us the low-cost provider. That’s why we have all the potato processors in this state.” l
Hop crops Courtesy Hop Growers of America The Yakima Valley — the world’s largest producer of hops — had only a slight increase of 1 percent in hops acreage last year compared to explosive growth in previous years.
Market slows after rapid growth BY KEVIN ANTHONY
T
he most recent hops data paints a picture that could be interpreted as an end to the recent boom for Washington hop farmers. But that does not point toward a fall back to earth, said Ann George, a Moxee farmer and executive director of the Washington Hop Commission, which serves double duty as the Hop Growers of America national organization. “Growth in the crop sector certainly has slowed,” George said. “There was a period of time from the mid-teens when we had 18 percent year-over-year growth. Now it’s 4 percent. It’s still healthy growth for the industry sector. It’s just where we are now, some varieties caught up with and exceeded demand.” Overall, hop production was up 1 percent in 2018, according to U.S. Department of Agriculture numbers. In Washington — in particular in the Yakima Valley, where more hops are grown
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than in any other area in the world — harvested acreage was up to 39,170 acres, a 1.4 percent increase, compared to the 3.2 percent growth in 2017. Of the 108.4 million pounds of hops harvested in the U.S., less than 2 million pounds came from outside the Pacific Northwest. Washington totaled nearly 78 million pounds, worth $427.5 million. However, hop prices took a hit, on average losing 30 cents a pound down to $5.50, according to USDA numbers. That 5.2 percent price drop combined with a slight decrease in yield per acre led to a pretty big fall in the production value of the 2018 crop. That $427.5 million in production was down $31.2 million, or 7 percent, from 2017. The previous year saw a record production of $458.7 million, a 20 percent gain from the 2016, which likewise saw double-digit growth from 2015. A slowdown was bound to happen, coming on the heels of nearly
doubling of U.S. hops since 2012, thanks in large part to the explosion of the craft beer market. Over a six-year period, hop acreage grew from less than 30,000 acres to 57,772, up 94.6 percent. “All in all, the market is relatively in balance,” George said, adding that most of the price drop came in public varieties of hops while proprietary — or trademarked — varieties remained stable. Indeed, among hop aficionados, 2018 may best be remembered as the year proprietary became king, as the Citra variety became the top seller in the nation, pushing the Cascade hop off the top spot it held since at least 2013. “It’s something we’ve been moving toward for a long time,” George said. While public hops like Cascade are free for anyone to plant — you just have to pay for the seed — proprietary hops require the farmer to pay a royalty to the patent holder, often another grower. It can take 10 years or longer u
to develop a new variety of hop, and there is no guarantee it will be a hit with brewers or the beerdrinking public. Obviously, the cost of growing public varieties is less than proprietary. However, when a hop is in demand — like Citra, which as its name suggests has a citrus profile and is popular in IPAs — it’s worth the added expense. “Citra has been working its way up the ladder since 2013,” George said. The Cascade hop, used in pale ales like Sierra Nevada, still is popular — it fell to No. 2. But if it follows the trend of other previous top varieties, the next few years could see it fall further as the market balances out. “Every year now, we need to continue to fine-tune,” George said. Hops are sold primarily two ways, with most being locked into five-year contracts. Most of the rest go to the “spot” market, where they are sold on the spot, often to smaller or newer brewers. Farmers are hesitant to sign a contract for fewer than five years. It costs about $10,000 an acre to put in a new hop yard. Even putting in new plants into a current field can cost up to $6,000 an acre. The first year’s harvest is considered “baby hops” — a smaller yield. It isn’t until the second year the farmer gets a full yield. All those costs must be amortized over the lifetime of the contract. That means a farmer would have to have a big incentive — and a premium price — to replant a field for a two- or threeyear contract. “The five-year contract is the industry gold standard,” George said. But that also means a variety of hop that is in high demand five years ago can start to fall out of favor, leaving a glut on the
Courtesy Hop Growers of America The popularity of the craft beer market brought with it an explosion in hop crops with the amount of U.S. hop acreage increasing 94 percent in six years.
market. Farmers still get paid on the contract, but any overage they might sell on the spot market will be for much less, if it sells at all. One of the strengths of the hop market also can create a potential headache for farmers. Because there are so many varieties of hops — 46 are grown in Washington — it’s a good bet there will always be great demand for some kinds, even while others flag. However, many of those varieties have the same picking window during harvest season from late August to early October. Farmers might have as many as 14 varieties in the field, but they likely don’t have the resources to harvest all their fields at once. That means contracts might be passed up if they require varieties that conflict with those already planted. Still, hop farmers are buoyed by the sheer number and selection of brewers in the U.S. and around the world. According to the Brewers Association, there were 7,450 breweries in the U.S. in 2018 — nearly all of them small craft breweries or pubs. That’s more than four times the number 20 years ago, and astronomically higher than the 150 in the U.S. in 1987. Statewide, beer production
has surged from 283,400 barrels in 2005 to 582,400 in 2017, according to the Washington Beer Commission. In Washington alone there were 391 brewery licenses in 2018, according to the Washington Brewers Guild. Eighty percent of those were independently owned, “neighborhood” breweries producing less than 4,000 kegs a year. All that beer contributes to the state’s economy. In 2017, beer production and related activities supported a total of 11,000 jobs and more than $1.4 billion in business revenues across the state. That includes 3,100 jobs and $477.9 million in business revenues supported through induced impacts, according to the Washington Beer Commission. That’s a lot of money for beer featuring diverse and different hop flavors. “A little bit they’re the victim of their own success,” George said. “There’s so much selection out there now, customers aren’t very loyal. Therefore, there will always be room for new experimentations and trying new varieties. The old standbys will always be there, but they lose ground to the new competition. “But we’ll continue to work on five-year contract cycles.” l
Focus | Agriculture + Viticulture in the Columbia Basin 31
Washington production, by the numbers APPLES
POTATOES
Year
Bearing Acres
Value
Year
Acres Planted
Value
2017 2016 2015 2014 2013
165,000 165,000 156,000 148,000 148,000
$2.43 B $2.38 B $2.31 B $1.89 B $2.13 B
2018 2017 2016 2015 2014
165,000 165,000 170,000 170,000 165,000
$688.51 M $888.03 M $813.31 M $772.31 M $771.21 M
WINE GRAPES
JUICE GRAPES
Year
Bearing Acres
Value
Year
Bearing Acres
Value
2017 2016 2015 2014 2013
53,000 52,000 49,000 48,000 45,000
$277 M $313.2 M $254.1 M $251.9 M $233.1 M
2017 2016 2015 2014 2013
20,000 21,000 22,000 24,000 24,000
$41.8 M $46.4 M $34.5 M $49.8 M $44.4 M
Source: USDA National Agricultural Statistics Service
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Juicy fruit State dominates U.S. for Concords BY ANDY PERDUE
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hile the Washington wine grape market booms, even approaching the state apple industry in size and economic importance, there’s another grape industry that tops the nation in size: juice grapes. Last year, Concord grape growers brought in nearly 200,000 tons of fruit — 3 percent over the prior year, valued at $41.8 million. Though the industry got its start on the East Coast — the original Concord grape was developed in Massachusetts in the mid-1840s — and while states such as New York, Michigan and Pennsylvania are large growers, Washington has long been the nation’s No. 1 grower, with the Yakima Valley and Burbank areas in Walla Walla County being favorite areas for growers. Concords in Washington date back at least a century, first planted near Outlook, in 1904.
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Through the years, they’ve been used to make juice, jelly, candy – even wine. Concords were the first grapes in Washington that were mechanically harvested in 1968. The Concord gets its name from the town of Concord, Massachusetts, where Ephraim Bull propagated the original vine after selecting a single vine from the 22,000 he planted. It was developed from wild vines growing in North America and was brought to market in the 1860s by Thomas Welch. After it was pasteurized, it wouldn’t ferment, so it was used for church communion services. Bull’s original Concord vine is alive and well at his home in Concord, still producing grapes each season. Washington tends to lead the way, not only in quantity but in quality. The reasons for this are myriad, but it comes down to the same reason Eastern Wash-
ington’s Columbia Valley produces world-class wine grapes: climate and irrigation. Well-draining sandy soils and scant precipitation mean farmers apply water through irrigation, giving them control over the plants and their vigor. Also important is the perpetually blue skies that help the plants convert sunshine into sugar. In the grape juice game, it’s all about sweetness. Typically, Concord growers aim for grapes that are around 15 percent sugar, said Dick Boushey, a grower north of Grandview who also is on Welch’s board of directors. For grapes to make red wine, the target often is 24 percent sugar. Boushey, more famous as one of Washington’s top wine grape growers, planted Concords along County Line Road in 1980. He now farms about 90 acres of juice grapes, along with 220 acres of u
Washington is the nation’s largest producer of Concords — used primarily as a juice grape. More than half of the nation’s supply is grown in the state, according to the U.S. Department of Agriculture.
his own wine grapes and an additional 300 acres he manages for others, primarily on Red Mountain. The mix works well for Boushey, primarily because he can use the same crews and the same farming equipment for juice and wine grape varieties. Concords are a heavily mechanized crop. Today, everything from pruning to harvesting is done by machines, helping to make the crop less labor dependent and more profitable. According to the U.S. Department of Agriculture, Washington produces more than half the nation’s half-million tons of Concords annually. Concords are hearty vines, meaning they can withstand Washington’s occasionally harsh winters with little to no damage. Boushey said the only year he saw damage was in the late 1970s, when severe cold caused wide-
spread damage to the relatively tender wine grapevines. Farming Concords vs. wine grapes is quite different. Wine grapes typically are grown at low tonnage. Winemakers like their tonnage low, often as low as two tons of fruit per acre. Concords, meanwhile, can be grown at upward of 10 tons per acre, harvested when the fruit reaches the desired level of sweetness. One of the challenges of growing Concords is changing market needs. Most East Coast Concords are crushed and used for juices, jelly or other products. In Washington, the fruit is processed in the Yakima Valley, and much of it converted to concentrate then shipped to Asia, where it is used for juice, jelly and other products sold in Japan and Korea. In recent years, the juice grape industry has seen a string of bumper crops, meaning lots of grapes
and lower prices. One option left for companies like Welch’s is to convert grape juice to concentrate, then store it until the market needs the product. The grape juice market is a bit depressed right now because consumers are buying less pure juice, primarily because of concerns over calories and sugar intake, Boushey said. Sodas are typically processed with 10 times the amount of sugar as Concord grape juice. Not only is grape juice naturally sweetened by sugar in the fruit, but Concords also have the advantage of providing the same heart-healthy benefits as red wine, thanks to polyphenols found naturally in the grape skins. Converting grape juice to concentrate is a benefit at a time when there is an oversupply in the market. If you’re driving through the u
Focus | Agriculture + Viticulture in the Columbia Basin 35
education • winery • agriculture • professional medical • office • religious • food service • retail
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36 Tri-Cities Area Journal of Business
Yakima Valley, how can you tell if a vineyard has Concords or wine grapes? Wine grapes are grown more vertically to expose the clusters to sunshine and the leaf canopy is managed to allow for air flow. Concords often appear rather shaggy, and you can’t see the grape clusters until you get up close and pull back the leaves. During harvest time in September, roll down your window to catch the familiar aroma of Concords. Welch’s is a cooperative, collectively owned by more than 900 farmers and growers nationwide, controlled by the National Grape Cooperative, of which Boushey is a member. He also serves on the board of the Auction of Washington Wines and the Washington State Wine Commission. He’s also a past chairman of the Washington Association of Wine Grape Growers, now called the Washington Winegrowers. He and other juice grape growers have found a new market for their juice: wineries on the East Coast and in the Midwest states that want juice to blend with other grape varieties to make wine. Brands such as Manischewitz and Mogen David, the maker of Mad Dog 20/20, and other flavored wines are typically made with Concord juice, whereas all Washington wines are made with classic European grape varieties. Boushey was surprised a wine market opened up for Concord juice, but he is pleased with the margins growers get for the product. He added that new Concord vineyards are not being planted in Washington because the supply is balanced with the demand. He added that although Washington’s juice grape market is in good shape, it’s not in a growth mode right now. l
Photo by Andy Perdue Sarah Hedges Goedhart, head winemaker for Hedges Cellars on Red Mountain, walks through their organically farmed estate vineyard.
Organic grapes
A natural tourist attraction BY FOCUS STAFF
T
he growing number of organic grape-growing regions in the Northwest provide new opportunities for wine marketing around the popular buzzword “terroir,” according to a new study by a Washington State University Tri-Cities researcher. Derived from the French word “terre,” meaning “land,” “terroir” is used to denote the special characteristics of a place, said Byron Marlowe, WSU TriCities program coordinator and clinical assistant professor of hospitality and wine and beverage business management. Older wine growing regions in Europe have capitalized on marketing terroir characteristics like climate, storytelling and the history of their region. For newer wine regions like Washington and Oregon, an opportunity also exists in devel-
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oping wine tourism by marketing terroir characteristics such as natural vineyards, organic practices and the wineries that call them home, according to a study Marlowe published in Beverages, an international peer-reviewed journal on beverage research and development. This kind of marketing may be currently underutilized in the region, he said. Marlowe said Washington wine country in the Tri-Cities, Prosser and Walla Walla already highlight the sensory terroir experience stemming from unique storytelling attributes of the region. He said Badger Mountain Vineyard in the Tri-Cities and Hedges Family Estate on Red Mountain both feature biodynamic farming practices, which have attracted a new brand of wine tourists to the area. That market, he said, only stands to grow as awareness of sustainable practices continues to spread
around the world. Marlowe said terroir can drive consumers to wine regions for the sense of place and environmental experience of wine, in addition to classic wine country attributes. In Oregon, more than 50 percent of grape growing operations are certified organic, he said, which presents a unique wine cultural experience. “There is a theme that is being set first among terroir factors in Oregon, and that theme is sustainable agricultural practices,” he said. “It has everything to do with how they treat the vines, the soil. These are vineyards that aren’t manipulating or pressuring the growing process, and people are responding to that by wanting to visit the sites of these vineyards and wineries, and by wanting to observe the sensory experiences of more natural vineyards.” While it is harder to achieve a consistent flavor profile using natural practices, Marlowe said the attention to the growing process is what fascinates and excites tourists about the wine region and ultimately leads to them buying the state’s wines. He said within the beauty of natural wine lie flaws and inconsistent vintages, yet it is what is closest to the historical practices of traditional winemaking and true to the terroir of a region. “There is a real new movement toward natural wines,” Marlowe said. “Organic vinicultural practices seek to preserve and protect the natural environment, as well as maintain the naturalistic qualities of the wine produced from the region. Both Oregon and Washington could capitalize on these characteristics in how they market their wine regions, which gives them a unique attraction point that stands to grow their wine economy.” l