NEWS AND A TRADE VISIT TO
WISCONSIN BY VICE PRESIDENT MIKE
PENCE.
THE VICE PRESIDENT APPEARED AT
U-LINE, A DISTRIBUTOR OF
PACKAGING MATERIALS IN PLEASANT
PRAIRIE.
HE USED THE OCCASION TO
ENCOURAGE SUPPORT FOR THE
U.S./MEXICO/CANADA TRADE
AGREEMENT.
THE PLAN AWAITS CONGRESSIONAL
APPROVAL.
MEANWHILE, THE U.S. TRADE WAR
WITH CHINA IS HITTING WISCONSIN
GINSENG PRODUCERS IN A BIG WAY.
TONIGHT, HOW CHINA'S RETALIATORY
TARIFFS AND VALUE-ADDED TAXES
HAVE ROCKETED TO A 41% ADDED
FEE, MAKING THE COVETED PRODUCT
MORE EXPENSIVE FOR BUYERS, MANY
OF WHOM SAY THE FARMERS SHOULD
ABSORB THE INCREASED COST.
SO WHERE DOES THIS LEAVE
WISCONSIN GINSENG GROWERS WHO
EXPORT 85 BERS% OF THEIR CROP TO
CHINA.
WE CHECK IN WITH WILL HSU WHO
OPERATES A GINSENG FARM NORTH OF
WAUSAU.
SO WHAT HAS BEEN THE EFFECT OF
THE U.S. TRADE WAR WITH CHINA ON
YOUR GINSENG FARM?
>> WELL, I THINK FOR THE OVERALL
INDUSTRY, WHAT IT'S MEANT IS THE
PROCESSORS AND PURCHASERS IN
CHINA HAVE REALLY ASKED THOSE OF
US HERE IN CENTRAL WISCONSIN TO
ABSORB THE BRUNT OF THE TARIFF,
MEANING THE PRICES THAT FARMERS
ARE RECEIVING HERE ARE ABOUT 30%
TO 40% LOWER THAN THEY WERE THE
LAST COUPLE YEARS.
>> SO WHAT KIND OF LOSSES DOES
THAT REPRESENT?
>> FOR OUR INDUSTRY, A 30% TO
40% PRICE DECREASE PROBABLY
MEANS THAT THE LOCAL ECONOMY
HERE IS LOSING SOMEWHERE BETWEEN
$10 AND $15 MILLION THAT'S
INFUSED DIRECTLY TO THE FARMERS.
AND THOSE FARMERS BUY A LOT OF
THEIR EQUIPMENT LOCALLY.
WE BUY VEHICLES, TRUCKS,
TRACTORS AND WE EMPLOY A LOT OF
PEOPLE HERE IN CENTRAL
WISCONSIN.
AND SO IT DOES MEAN THAT WE'VE
HAD TO FIND WAYS TO MAYBE TRIM
COSTS AND NOT USE AS MUCH LABOR
OR NOT HIRE AS MANY PEOPLE.
>> WHAT DO YOU THINK OF THE U.S.
TRADE POLICIES THAT BROUGHT YOU
TO THIS PLACE?
>> I THINK MOST OF THE FARMERS
HERE IN CENTRAL WISCONSIN,
REGARDLESS IF YOU'RE TALKING
ABOUT GINSENG FARMERS OR OTHER
PRODUCERS, UNDERSTAND THE NEED
TO HAVE FAIR TRADE, AND THEY MAY
SUPPORT THE REPUBLICAN
ADMINISTRATION IN TERMS OF WHAT
THEY'RE TRYING TO DO TO LEVEL
THE PLAYING FIELD WITH CHINA.
I THINK THE DIFFICULT PART OF
THAT IS HOW IT IS IMPACTING US
PERSONALLY AND FINANCIALLY.
I THINK A LOT OF FARMERS FEEL
THAT PINCH.
THEY FEEL THE BRUNT OF THE TRADE
WAR.
AND THEY'RE HAVING TO TAKE IT IN
THE POCKETBOOK BECAUSE OF OUR
BROADER NATIONAL POLICY AND
TRADE STRATEGY.
>> NOW, PRESIDENT TRUMP
ANNOUNCED A TRADE DEAL WITH
CHINA EARLIER THIS MONTH.
HOW OPTIMISTIC ARE YOU THAT THAT
MIGHT BRING SOME RELIEF HERE?
>> I GUESS IT'S HOPEFUL
OPTIMISM.
WE'VE HEARD IT BEFORE.
I DON'T KNOW IF I CAN
NECESSARILY COUNT ON IT AND BANK
ON IT.
I THINK, YOU KNOW, YOU HAVE A
DIFFERENCE IN REGIME.
YOU HAVE CHINESE PREMIERE, WHO
FOR LACK OF BETTER WORD DOESN'T
HAVE TO FACE REELECTION AND YOU
HAVE A PRESIDENT THAT'S GOING TO
HAVE TO FACE REELECTION NEXT
YEAR.
SO IF YOU LOOK AT THE SHORT TERM
VERIZONSHORT TERMVERSUS THE LONG TERM WE'RE
LOOKING AT TWO DIFFERENT GAMES.
>> HOW DOES THE CROP LOOK?
>> THIS YEAR BECAUSE OF THE
WEATHER, WHICH NO ONE CAN
CONTROL, THE CROP YIELD IS NOT
AS GOOD AS IT HAS BEEN IN RECENT
YEARS.
THE OVERALL POUNDAGE MAY BE DOWN
A LITTLE BIT.
YOU'RE SEEING MORE FARMERS SAVE
ROOTS FOR AN ADDITIONAL ROOT,
MEANING SAVING THREE-YEAR-OLD
ROOTS YOU WOULD NORMALLY
HARVEST, WITH THE HOPE THAT A
TRADE DEAL IS DONE AND THAT
PRICES ARE BETTER AND RECOVER
NEXT YEAR.
>> HAVE YOU SOLD YOUR GINSENG
CROP?
>> MOST OF THE CROP THAT WE
HARVEST OURSELVES IS USED
INTERNALLY WITHIN OUR OWN
OPERATION FOR OUR OWN CUSTOMERS.
I WOULD SAY THAT THERE ARE A FEW
FARMERS THAT STILL HAVE CROP
LEFT OVER FROM LAST HARVEST, SO
2018 HARVEST, AND SOME OF THE
NEW CROP IS JUST STARTING TO
COME ON THE MARKET.
AND WE ARE SEEING SOME SOFTNESS
AND WEAKNESS IN PRICE AS THE
TRADE WAR DRAGS ON AND IT
CONTINUES TO HAVE A DOWNWARD
PRESSURE ON THE OVERALL MARKET
PRICE FOR GINSENG, ES PECIAL LYL
FORESPECIALLYFOR THE NEW 2019 CROP.
>> I KNOW FOXCONN SIGNED AN
AGREEMENT WITH THE GINSENG BOARD
AND YOURSELF TO PROMOTE
WISCONSIN GINSENG IN FOREIGN
MARKETS AND PRODUCE THE
COMPANY'S OWN BRAND OF GINSENG.
WHAT HAS BEEN THE OUTCOME OF
THAT AGREEMENT?
>> SO I THINK IN SOME REGARDS TO
THE TRADE WAR, WHAT WE'RE SEEING
WITH FOXCONN IS THAT THEY ARE
DOING THAT AGREEMENT IN TAIWAN.
SO THEY ARE PURCHASING PRODUCT
FROM US, EITHER HERE IN
WISCONSIN OR FROM OUR OPERATIONS
IN TAIWAN, AND MARKETING AND
SELLING THAT ROOT IN TAIWAN.
BUT BECAUSE OF THE IMPACT OF THE
TARIFFS ON ON ON IMPORTS INTO CHAIN
THAT, THEY AREN'T PURSUING IT IN
CHINA, ONE OF THE BIGGEST
MARKETS.
SO IT IS A MISSED OPPORTUNITY
WITH THAT TRADE AGREEMENT WITH
FOXCONN BECAUSE OF THE TRADE
WAR.
BUT IT'S A SIDE EFFECT OF WHAT'S
GOING ON NATIONALLY.
>> DID FOXCONN END UP INVESTING
IN HIGH-END INSPECTION
TECHNOLOGY AT YOUR FARM TO
PRODUCE ITS GINSENG?
>> NO.
THEY HAVE NOT.
TO DATE, THEY HAVE NOT.
AND I THINK PART OF IT IS JUST
BECAUSE THE VOLUME THAT THEY
NEED TO SATISFY THE TAIWAN
MARKET IS VERY SMALL VERSUS HOW
BIG THEY EXPECTED THE CHINESE
MARKET TO BE.
>> JUST VERY BRIEFLY, SHOULD THE
TRADE DEAL WITH CHINA BE
REALIZED, CAN YOUR LOSSES AND
MARKETS BE RECOVERED?
>> I THINK SOME OF THE MARKET
LOSSES WILL BE RECOVERED
IMMEDIATELY, BUT THE LONG-TERM
EFFECT IS PRETTY DAMAGING.
IT TOOK US 20 YEARS TO DEVELOP
THE CHINA MARKET.
THEY ARE STILL OUR PRIMARY
CONSUMER.
THEY WILL STILL COME BACK.
BUT WHAT IT HAS ALLOWED IS THE
PRODUCERS OF AMERICAN GINSENG IN
CHINA AND CANADA TO REALLY STEP
IN WITH WHAT ISN'T NECESSARILY
LOWER COST, BUT IT'S LOWER COST
TO THE CONSUMER.
MEANINGMEANING BECAUSE OF THE
ADDITIONAL 40% TARIFF IT GIVES
THEM A MARKET TO OPERATE BECAUSE
THEY DO NOT HAVE TO PRICE
COMPETE WITH US.
>> ALL RIGHT.
WE NEED TO LEAVE IT THERE.
WILL HSU, THANKS VERY MUCH AND
GOOD