Growers, Tropicana at odds over citrus 'dumping'
By SARA KENNEDY
skennedy@bradenton.com

BRADENTON --
Florida citrus growers and their biggest purchaser - Tropicana Products Inc. - are embroiled in a dispute over whether the U.S. citrus industry was damaged as a result of underpriced orange juice imported from Brazil.

A coalition of Florida growers and processors estimate losses of $100 million or more to domestic growers during two crop seasons. The growers contend that foreign suppliers "dumped," or sold juice at a price lower than domestic whole prices. Tropicana contends the marketplace was not affected by the foreign imports.

Tropicana purchases 40 percent of the state's orange crop each year. But when domestic supplies run low due to freezes, hurricane, drought or disease, the Bradenton juicemaker supplements with juice imports from Brazil, the world's largest citrus producer.

The U.S. International Trade Commission investigated growers' complaints and concluded that several Brazilian orange juice importers undercut domestic sales and through selling or dumping lower-priced juice on the market, "significantly suppressed domestic prices" between 2001-02 and 2004-05.

The irony of the dispute is that citrus growers are opposing Tropicana, their biggest citrus customer and, at the same time, Tropicana is siding with its Brazilian suppliers of orange juice, part of its secondary market. The Brazilian firms have been required to post deposits and are being monitored by U.S. officials.

Appeals in the case are continuing. The commission has consistently ruled against Tropicana and the Brazilian orange juice producers and in favor of a coalition of U.S. growers and processors, although by the thinnest of margins.

On Feb. 5, an appeals court again ruled against Tropicana and Brazilian orange juice importers.

Florida Citrus Mutual, which represents 8,000 Florida citrus growers, said Brazilian frozen concentrate juice sold for 37 percent less than the cost of its production, and not-from-concentrate juice sold at 78 percent less than what it cost to produce during the 2003-04 season.

Tropicana has argued from the beginning that the U.S. citrus industry suffered no injury. The company noted that commission votes in the case, many of which ended in 3-3 ties, have been far from decisive. And a court that reviewed the commission's analysis found the original determination "arbitrary and capricious," Tropicana officials point out.

"From the outset, Tropicana has believed there is no evidence demonstrating a connection between imports of Brazilian orange juice and injury to the domestic citrus industry," according to a memo from the company.

"Ultimately, Tropicana and the citrus growers are in this together," it said. "We want to resolve this matter so we can dedicate our collective efforts toward helping the Florida citrus industry rebound. Tropicana will be exploring our legal and commercial options for a favorable resolution."

Using calculations from the U.S. Commerce Department, Florida Citrus Mutual estimates that dumping reduced Florida farm-gate revenues by about 9 percent, or $70 million.

"Based on our investigation and examination of the data, we believe that the loss may have actually been $100 million or more," said Michael Sparks, chief executive officer for Florida Citrus Mutual, which led the domestic citrus industry coalition in the legal fight against Tropicana and the Brazilian companies.

"If we didn't make this anti-dumping challenge, and they continued to import low-value orange juice, it would be bad for the grower, bad for the state. If we lost the citrus industry, that would be terrible for the consumer," Sparks said.

"Brazil and Florida are the two big players. If Brazil basically destroyed the (U.S.) citrus industry, I believe the consumer would have to pay higher prices. It would be a monopoly - you'd be at the risk of wherever the Brazilians would set the prices."

As the case grinds on, it has left several growers, who said they had once revered Tropicana as a company, somewhat disillusioned.

When asked about any change in its relationship with growers, Tropicana Vice President for Citrus Procurement Bill Ferrari replied: "That's something I'm not aware of. I've continued to meet with all our growers. They understand our position."

Sara Kennedy, Herald business reporter, can be reached at (941) 748-0411, ext. 4500.

Source: http://www.bradenton.com/business/story/454014.html

How opposing sides view the issue of citrus 'dumping'
By SARA KENNEDY
skennedy@bradenton.com

BRADENTON --
When Colin Carter takes his kids to the grocery store to buy a gallon of orange juice, he tells them at the check-out counter: "We're being taxed to benefit the growers in Florida."

Carter, who holds a doctorate in agricultural economics and is a professor at the University of California-Davis, contends that U.S. trade policies mean consumers pay more for orange juice because they must pay for protective tariffs.

"Every time you grab a gallon of orange juice, you're paying well above the world price because of protection for the industry," he said.

Under U.S. law, there is a "tremendous bias" in favor of the U.S. citrus industry over foreign producers, Carter says. In 90 percent of court cases, domestic producers win when the U.S. Department of Commerce decides whether "dumping" or selling of underpriced juice on the U.S. market has occurred.

In about half the cases before the U.S. International Trade Commission, which decides whether "dumping" has injured a U.S. industry, the commission rules in favor of the domestic industry, said Carter, who testified as an expert witness for Brazilian firms in the case involving Tropicana and Florida growers.

"The empirical evidence is clear. Any fluctuation in imports of (orange juice) from Brazil has affected the domestic price by an economically insignificant amount," according to Carter.

On the opposing side of the debate is Tom Spreen, who also has a doctorate in agricultural economics and is chair of the Food and Resource Economics Department at the University of Florida. Spreen briefly served as an unpaid consultant to a coalition of U.S. growers and processors who successfully petitioned for relief from Brazilian dumping.

"You have this great big crop in 2003-04, a billion gallons in a typical year, but in 2003-04, Florida produced about 1.3 billion gallons of orange juice. It was so big the U.S. did not need to import any orange juice that year," he said. "There was enough production from Florida to fulfill the demand."

"There were imports, anyway, and in a simple way, that's why there was an anti-dumping suit filed against the Brazilian industry. There was more produce processed in the U.S. than we needed," Spreen said.

Spreen acknowledged the trade commission is a "somewhat political entity," but has shown its independence in other decisions, for example, one involving Mexican tomato dumping in the 1990s.

As for doing away with the whole tariff system, Spreen said he would feel better if tariffs were not in place but if they were eliminated, Florida's citrus industry would face lower production and prices and higher production in Brazil.

"It wouldn't kill it (the citrus industry) but it would cripple it," he said.

Source:
http://www.bradenton.com/business/story/454015.html