On Sept. 16, members from Giorgio Fresh Co., J-M Farms, Kennett Square Mushroom Operation, Modern Mushroom Farms, Needham’s Mushroom Farms and Sher-Rockee Mushroom Farms filed an antidumping and countervailing duty petition with the U.S. Department of Commerce and the U.S. International Trade Commission under the Fresh Mushrooms Fair Trade Coalition.
The growers allege that Canadian producers export mushrooms into the U.S. at prices below fair value and benefit from countervailable subsidies provided by the Canadian government.
“These practices have resulted in significant negative impacts on U.S. mushroom growers and packers, including lost sales, depressed prices, and declining profitability,” the petitioners allege.
While the petitioners did not respond to opportunities to comment, Amy Wood, president of the Mushroom Council, says the North American mushroom industry is entering an exciting chapter of growth and opportunity.
“The Mushroom Council represents all North American mushroom growers with a focus on expanding consumer demand for fresh mushrooms,” she says. “Though trade issues are complex, our industry is aligned on a vision for reaching new consumers and expanding fresh mushroom consumption.”
A Symbiotic Relationship
Ryan Koeslag, executive vice president of the Canadian Mushroom Growers’ Association, says the relationship between the Canadian and the U.S. mushroom industries is much more symbiotic than just imports and exports.
The Canadian Mushroom Growers’ Association represents more than 90% of the commercial growers in the country, primarily in Ontario, with growers in British Columbia as well as Alberta, Manitoba and Quebec. The industry exports about 40% of its mushrooms to the U.S.
Koeslag says Canada supplies about 100% of the peat moss used by mushroom growers in the U.S., and the U.S. predominantly supplies the North American mushroom industry with mushroom spawn. Ontario exports sugar beets to Michigan to become sugar beet lime, which is used in production.
“This is an industry that has been a prime example of awesome and amazing trade, and it’s unfortunate that people aren’t seeing that,” he says. “Instead of focusing on how to try and expand the market and find more consumers of mushrooms, we’re in a situation where we might be squabbling amongst each other.”
Koeslag says the Canadian and U.S. mushroom industries have worked together for about 50 years to grow consumption, research the best growing techniques and more.
“It’s really been this great relationship that, you know, we have been privileged to walk into from past generations of seeing that foresight and seeing the benefits of cooperating together,” he says. “So, it’s quite unfortunate that there is this coalition trying to deteriorate some of that relationship and partnership building.”
Koeslag adds that’s because Canadian growers directly support the U.S. mushroom industry.
“Every time a Canadian mushroom crosses the border, there is a levy that goes to the American Mushroom Council in order to help promote the consumption of mushrooms and help to encourage increased consumption of mushrooms,” he says.
Grower Response
A spokesperson for Kennett Square, Pa.-based South Mill Champs, which has production in British Columbia and Manitoba as well as in the U.S., says “the allegations against our company are baseless, and the petitions themselves lack merit,” adding that the petition will cause prices to go up, reduce quality and slow the modernization of the U.S. mushroom industry.
The spokesperson told The Packer that many Canadian and U.S. growers have adopted modern European mushroom growing techniques, which have helped produce consistent products that consumers and retailers have come to expect. And as far as the notion that there is an unfair playing field, the spokesperson told The Packer that it is untrue.
“The mushroom market is currently a fair and level playing field. Producers of better products are winning customers in an open and competitive market,” the spokesperson said. “This has nothing at all to do with pricing strategy. Producing from older-generation infrastructure simply does not enable a grower to deliver the best quality and most consistent product. And customers recognize the difference.”
What’s Next
U.S. and Canadian producers must submit an antidumping and countervailing duty investigation questionnaire, which is due Sept. 30. A hearing will be held on Oct. 7. Following the hearing, the parties will submit briefs due on Oct. 10. The International Trade Administration will vote on the case on Oct. 31.
“We are managing everything we can in order to make sure that we can continue to manage and sell into the United States, providing as much information as possible and cooperating as much as we can,” Roeslag says. “We’ve been actively engaging our membership. We’ve been organized and had our legal team engaged. We’re very much engaged in this process and hope to represent Canada well in every stage.”
Koeslag says the Canadian Mushroom Growers Association has already provided input to the investigation questionnaire and examination of the products. He says tariffs, duties or anything else that could raise the cost of mushrooms and drive consumers away would harm the mushroom industry in North America.
“We continue to recognize that the biggest issue we have with expanding our market is inflation and increased costs,” he says. “So, I don’t believe it’s in the best interest of farmers in Canada or farmers in the United States to have the price of food increase at all.”
And the spokesperson for South Mill Champs echoes that sentiment, noting that customers have expressed concern at the potential price hike if the antidumping duties were to be imposed.
“What is more worrying are the long-term consequences for the mushroom industry, as a whole,” the spokesperson told The Packer. “Simple economics would tell us that higher prices lead to reduced consumption of a fabulous product, with less presence on menus and in stores. This petition also serves as a disincentive for older operators to modernize, resulting in less reliable supply, more issues with insects, and lower overall quality.”
