WI Ginseng Co-op officials head to China on trade mission with USDA under secretary
Members of a Wisconsin ginseng cooperative officials concerned that newly placed tariffs will impact their ability to compete in the China market are heading overseas to plead their case with potential customers.
Randy Ross, a board of director for the Ginseng & Herb Co-op in Marathon County confirmed that the group is traveling to southern China with U.S. of Agriculture Under Secretary for Trade and Foreign Agricultural Affairs Ted McKinney.
The under secretary is joined by a diverse delegation of agribusiness and state government leaders looking to establish new business connections in Guangzhou and Shenzhen, China, May 21-May 25.
Southern China is a major import hub and a growing market for U.S. agricultural exports, which already average $8 billion annually.
"Not only do we need to secure more sales in China, but we need to discuss with officials from the USDA some of the trade barriers and issues that we are facing in trying to do that," Ross said.
It's critical to have U.S. government officials on board to help American businesses navigate the complicated journey in establishing trade inside of China.
"It's difficult to deal with China directly because they have import requirements to meet and strict laws about getting money out of China, so the financing of sales becomes complicated," Ross said.
A recently authorized tariff of 15 percent tariff placed on top of existing tariffs have ginseng growers like Ross concerned about the impact it will have on Wisconsin growers competing with other producers around the world for China's business.
Bob Kaldunski, president of the Ginseng Board of Wisconsin, says China is the largest consumer of American ginseng - of which 95 percent of the root crop is grown in Wisconsin.
"American ginseng is regarded as the best in the world," Kaldunski said. "Chinese consumers may opt to buy Canadian ginseng because of the larger price differences that result from the tariff. Wisconsin ginseng is already commanding a higher market price. Another 15 percent and the consumer will shy away."
The Ginseng Board of Wisconsin estimates that exports of the root totaled 586,430 pounds, or about $20 million dollars, in 2016. And according to the USDA, over 40 percent of that crop—almost all grown in Marathon County—was sent overseas to China.
For nearly 75 years, the lion's share of ginseng heading to China was produced in the U.S., until the 1990s when its northern neighbor, Canada, jumped into the market.
"Not only do we have to compete with this, but we also have to compete with the ginseng grown inside China," Ross said. "In addition to our ginseng having to be the best quality out there, it has to be sold at a better price so it's more economical for them to purchase."
The cooperative, which represents over Wisconsin 180 growers, hopes to make good connections with potential customers while on the mission trip. In-country staff from USDA’s Foreign Agricultural Service will help arrange meetings between U.S. delegates and representatives of Chinese companies in Guangzhou and Shenzhen.
"We're hopeful that in addition (to making headway) on the tariff that was just implemented, that the other tariffs would be either eliminated or reduced to that it would be easier for companies in China to buy our ginseng," Ross said.
Ross says the mission trip will also give cooperative representatives a chance to speak with Terry Branstad, former governor of Iowa and now U.S. ambassador to China.
"He's familiar with our ginseng organization and we're hoping that we can play on both sides of the ocean and get a positive response regarding our issues that obviously concern us," Ross said. "The more information and education we can provide to our U.S. representatives and government people about our industry and the impact the tariffs have on it is important. And, of course, we'll make every effort to help this venture."
A Madison-based organic skincare company is also among the 25 companies and organizations traveling to China.
According to its website, Quatrefoil Skincare is the first skincare company from the Midwest focusing on developing natural and organic skincare products with ingredients from local farms.
USA TODAY NETWORK - Wisconsin also contributed to this article.