Cherry growers worry about rising imports

By KALEY FECH
Capital News Service

LANSING – Michigan is the nation’s top producer of tart cherries but increasing imports from foreign countries worry the state’s growers.

“Michigan grows 75 to 80 percent of the U.S. supply of tart cherries every year,” said Kevin Robson, a horticulture and industry relations specialist for the Michigan Farm Bureau.

The Michigan crop is worth $54 million, according to the Farm Bureau.

Imports have rapidly increased over the past decade. Ten years ago, the U.S. imported approximately 24 million pounds of cherry juice concentrate annually, said Phil Korson, president of the Cherry Marketing Institute. In 2016, the U.S. imported 200 million pounds of cherry juice concentrate.

“We can’t even come close to competing with imports coming in, especially from Turkey,” said Mike DeRuiter, a third-generation farmer from Hart in Oceana County.

The average industry price last year was around 18 cents per pound. Depending on the chemicals used to protect the trees, that can be five to 10 cents under the cost of production, he said.

Turkey sells its tart cherry juice concentrate for roughly $14 a gallon, while U.S. growers are currently at $28 a gallon. The break-even point for a U.S. grower is about $32 a gallon, DeRuiter said.

U.S. farmers have incurred increased production costs in recent years due to the introduction of the spotted wing drosophila, an invasive species that destroys fruit trees, including tart cherry trees.

“That pest has been a huge challenge for growers because it’s driven up costs,” Korson said. “The profit margins are down because the costs have gone up.”

The tart cherry industry has made a massive effort to grow the market.

“Tart cherries were traditionally a bakery ingredient,” Korson said. “In the early years of our industry, most of the cherries that were produced were produced for pies and pastries.

“We started 20 years ago investing in health benefits research. There was always folklore for cherries being good for arthritis and gout, but we had no science to support that,” he said.

After 10 years of research, quite a bit of scientific support emerged regarding health benefits, he said. The Cherry Marketing Institute doubled the assessment growers pay and hired a Chicago-based agency and a new marketing director to take that research message to the national market.

“Our focus was on juice, dried and frozen, and our goal was to reposition tart cherries from a bakery ingredient to be one of America’s superfoods,” Korson said.

The Farm Bureau’s Robson said the industry has done a remarkable job of rebranding itself as a health food product.

The effort was largely successful in increasing demand. The problem for U.S. farmers, however, is their domestic sales stayed flat while imports skyrocketed.

And grower DeRuiter said, “The U.S. consumption of tart cherries has definitely gone up since we started the promotion program. And that’s grower-funded. Every grower in the U.S. is essentially paying into this promotion program.

“Statistically we have grown the markets in the U.S. so it’s a huge positive. We just have to stop other countries from dumping in here.”

Korson said the problem stems from unfair trade. If a farmer in Michigan grows tart cherries and exports them to Turkey, the tariff is 58 percent. On the flip side, if a Turkish farmer grows tart cherries and ships them to the United States, there’s no tariff at all.

“At the end of the day, I think the U.S. government has really let us down,” Korson said. “Farmers have been put in a position where the government has allowed foreign countries to take advantage of the funding and the work that U.S. growers have done in not only growing and protecting their crop, but also in trying to market their crop by giving some other competitor duty-free access to that market.“

Even with the industry’s problems, those closest to it sound optimistic.

“Growers will tighten up their boots and weather the storm with the hope and the belief that the industry will come back around,” Robson said.

DeRuiter continues to plant trees with the hope that the market will rebound.

“In the fruit world, it’s a long term commitment,” he said. “The trees I planted today, it’ll be seven years before I take the first crop off of them, and then they’ll last for about 35 years.”

DeRuiter said growers are working hard on the issues, and he said he thinks they’ll be able to fix them.

“It’s hard to shed positive light when we’re going through a low period. It’s tough but you have to be optimistic,” he said.

Farmers eye tariff as potential trouble

By KALEY FECH
Capital News Service

LANSING – Many Michigan farmers are worried about a potential backlash as a result of higher federal tariffs and new international trade policies.

“The big concern in agriculture right now is that by leveling steel and aluminum import tariffs against some of our key trading partners, like China, it could levy a retaliatory tariff, and often retaliation targets agriculture,” said Chuck Lippstreu, a publicist for the Agricultural Leaders of Michigan.

That could to lead to unintended consequences and a retaliation against Michigan agriculture and U.S. agriculture that would hurt farmers, he said.

One of the biggest concerns is the effect a backlash from the tariffs could have on soybeans.

“Michigan produces over 100 million bushels of soybeans annually, or three million tons,” said David Williams, the president of the Michigan Soybean Promotion Association based in Frankenmuth. “Michigan exports over 60 percent of its soybeans.”

China is one of the country’s top customers for soybeans, Williams said. U.S. exports to China are worth around $14 billion a year.

China is also one of the major targets for the new steel and aluminum tariffs imposed by President Donald Trump.

“If these tariffs cut our market access, that could really hurt the U.S. economy,” Williams said.

The price farmers get for agricultural commodities is lower than in the past, and retaliatory tariffs on commodities would only increase their problems, he said.

Soybeans are a versatile crop, Williams said. The main product is soybean meal, which is used as feed for animals. The oil is also extracted and used in carpet backing, the foam in car seats, plastics and a multitude of other products.

Milk is another commodity that could feel a backlash because of retaliatory tariffs.

“Dairy has become part of the global economy,” said Ken Nobis, the president of the Michigan Milk Producers Association. “And agricultural products are usually the No. 1 target of trade disputes.”

The Novi-based group has plants in Constantine, Ovid, Mt. Pleasant and Middlebury, Indiana.

Michigan produces 11 billion pounds of milk each year, and while most of that milk is sold in the United States, Michigan dairy farmers could still be adversely affected by retaliatory tariffs.

“Exports for the country as a whole are about 15 percent of milk produced,” Nobis said. “Retaliatory tariffs would affect the prices of milk for all U.S. farmers because they would make the U.S. less competitive in the global market.”

Plenty of dairy is produced globally, Nobis said, so other countries can simply go elsewhere to get their milk.

“Tariffs can really knock things out of whack,” he said.

Got Lakes? Try cycling around them

By JACQUELINE KELLY
Capital News Service

LANSING — As a professor of politics at Ithaca College in New York, Thomas Shevory knew that his decision to bicycle around each of the Great Lakes would lead to numerous observations of environmental and economic conditions.

But he was surprised to learn how central the lakes are to much of the development of the United States.

“I just never put it together how early exploration and settlement in what is now the U.S. occurred in the north, along the Canadian border,” he said. “I tend to associate colonial America with places like Plymouth Rock, Jamestown, the Puritans, et cetera. But it was hunters and trappers who drove the economy, and they were able to easily get around because of the lakes.”

Shevory has put together an enticing read of what it’s like to travel around the Great Lakes on two wheels. “The Great Lakes at Ten Miles an Hour,” published this fall by the University of Minnesota Press, is available online for $16.95.

Born and raised 25 miles from Lake Erie, Shevory was no stranger to the Great Lakes.  The idea that there was still so much he could explore in his own backyard didn’t even cross his mind until he was more than 6,000 miles away in Ulan Bator, Mongolia.

“I had just got to thinking that we sometimes travel long distances in search of the mysterious or exotic, and that in doing so, we might miss those amazing places that are closer to home,” he said.  “And the Great Lakes struck me as being like that – not that far from me, but in many respects very mysterious.”

Shevory first decided to make a hobby out of cycling in the summer of 1989 after participating in RAGBRAI (the Register’s Annual Great Bicycle Ride Across Iowa), a seven-day bicycle ride across the state. Heading into its 45th year, RAGBRAI is the oldest, largest and longest recreational bicycle touring event in the world, although Shevory wouldn’t call it a true cycling tour.

“There was plenty of food and beer,” he said. “I remember some great pulled pork. It wasn’t the most vigorous cycling trip I have ever been on, and it didn’t involve much training. But it definitely sparked my interest.”

The following summer he took his first tour from his home in Ithaca to the northern border of New York. He was hooked.

In the summer of 2011, Shevory began his Great Lakes journey in Sarnia, Ontario. This first leg of his five-lake trip allowed him to see Lake Huron in a different light. Readers feel like they’re accompanying him through bike-friendly tourist towns in “the Thumb” of Michigan. They accompany him past the industrial Essar Steel Algoma plant as they cross the Sault Ste. Marie Bridge into Canada.

Shevory makes observations about the economic, environmental and historical backgrounds of each area he cycles through. Commentary about the bankruptcy of Detroit and loss of jobs in Buffalo not only gives the reader perspective about the deindustrialization of many cities but also casts an optimistic light on their revitalization with new ways to stimulate their economies.

“We know that it is not likely for these industries to be rebuilt as they once were,” Shevory said. “That’s what made it so much more inspiring that these big cities weren’t giving up and are finding new ways to develop the economy by capturing their rich histories, and bringing tourism into beautiful cities.”

As he comments on how each Great Lake played a role in the creation of the United States, he advocates for worldwide environmental stability.

Shevory’s journey ended June 27, 2014 after cycling around Lake Ontario. Each leg of the trip took two to three weeks over a three-year period.

He’s now moved on to rivers and his sights are set on the Colorado River for next summer.

His advice for aspiring cyclists: “You don’t need too much experience to start touring, but you always need to be prepared for the unexpected. Make sure you have proper clothing, and you should be able to change a flat tire or a broken chain.”

Jacqueline Kelly is a reporter for Great Lakes Echo

Major recycling scam ends in indictment

By ERIC FREEDMAN
Capital News Service

LANSING — A bogus scheme to build an eco-friendly “green energy” waste processing facility in Detroit defrauded lenders and investors — including Chinese investors hoping to qualify for U.S. visas — of $4,475,000, according to a federal grand jury.

Project promoter Ronald Van Den Heuvel promised the victims that his Green Box-Detroit would build and operate a facility to recycle paper, process other waste and produce synthetic fuel, the indictment charged.

He also sought approval from the Michigan Economic Development Corp. (MEDC) to issue $95 million to $125 million in tax-exempt bonds toward the project’s $200 million price tag, legal documents said.

In a related civil suit against Van Den Heuvel and Green Box-Detroit, the Securities and Exchange Commission (SEC) said, “He claimed that he had developed a breakthrough recycling process that could turn post-consumer waste into usable products. He represented that the Green Box process would be both environmentally friendly and profitable, and would allow Green Box-Detroit to repay investors.”

But it was a scam because Van Den Heuvel never acquired the promised facility or equipment and used the money for other purposes, the indictment said.

The Detroit scheme was disclosed in a broad indictment accusing Van Den Heuvel of fraudulently obtaining more than $9 million in investments and loans in Wisconsin and Michigan between 2011 and 2015. He promised to “turn post-consumer waste from sources like fast food restaurants completely into usable consumer products and energy,” the U.S. Attorney’s office in Milwaukee said in announcing the indictment.

“As represented by Van Den Heuvel, the Green Box business plan was to purchase the equipment and facilities necessary to employ a proprietary process that could convert solid waste into consumer products and energy, without any wastewater discharge or landfilling of byproducts,” the indictment said.

Van Den Heuvel, who lives in De Pere, Wisconsin, diverted more than $3.9 million of the $9 million for personal uses, the indictment and SEC suit said. Among them: $44,000 for Green Bay Packers football tickets; $57,000 for court-ordered support for his ex-wife; $89,000 for a new Cadillac Escalade; $16,570 for his children’s private school tuition; and $33,000 for his wife’s dental work.

He also falsified financial statements that “grossly inflated his personal wealth and his companies’ assets,” the indictment said.

His defense lawyer, Robert LeBell of Milwaukee, didn’t respond to requests for comment.

The primary victims of the Detroit project were nine investors from China who poured $4,475,000 into the failed endeavor. They’d hoped to become permanent residents — green card-holders — by investing at least $500,000 each under the U.S. Citizenship and Immigrant Services EB-5 Immigrant Investment Program.

Van Den Heuvel worked through Green Detroit Regional Center, which is owned by a Georgia law firm that is authorized to operate in Wayne, Livingston, St. Claire, Lapeer and Macomb counties, court documents said. The center finds “foreign clients, mainly from China and South Korea, to invest in large alternative energy projects,” according to its website.

The Green Box-Detroit project was portrayed as creating 35 direct and indirect jobs per each Chinese investor.

“Green Detroit Regional Center promoted the EB-5 investments in Green Box Detroit based on Van Den Heuvel’s representations,” the SEC suit said. It said the chief executive officer of the Green Detroit Regional Center, Georgia lawyer Simon Ahn, marketed the project to investors through immigration consultants in China.

Neither Ahn nor Green Detroit Regional Center have been charged or sued by the SEC.

Ahn said, “If the charges are true, it is completely shocking to learn about the extent that Ron Van Den Heuvel hid the truth from me,” the center and investors.

“All of us visited the plants in Wisconsin many times, including the potential site in Detroit, and everything checked out fine. All the financials from a recognized accounting firm indicated that everything was proceeding on track, Ahn said.

The SEC suit said Van Den Heuvel falsely told investors that the MEDC had approved tax exempt bonds for the project. However, the MEDC rejected the request after discovering five tax liens, one construction lien, two state tax warrants, four civil judgments and three civil lawsuits, according to court documents.

“Van Den Heuvel did not satisfy MEDC’s concerns. He did not provide additional information to the MEDC, and did not provide a satisfactory explanation for the issues that it had raised,” the SEC suit said.

MEDC vice president of marketing and communications Emily Guerrant said “Yes, they did approach us. No, we never engaged with them.”

Ahn said it is likely that a receivership will be established to help Chinese investors recoup their money. He said it is “hard to determine at this point” whether they will qualify for green cards.

The grand jury accused Van Den Heuvel of wire fraud and illegal financial transactions. If convicted, he faces a maximum penalty of five years in prison and a $250,000 fine. In addition, the federal government is seeking to recoup the proceeds of the alleged fraud.

Earlier this month, Van Den Heuvel pleaded guilty under a separate 2016 indictment in a bank fraud conspiracy case. Charges against his wife and a bank loan officer in that case are still open.

DACA workers would leave a hole in economy if forced to leave

By STEPHEN OLSCHANSKI
Capital News Service

LANSING —  Veronica Thronson, director of the Immigration Law Clinic at Michigan State University, said the economic impact to ending DACA is uncertain, but it could have detrimental effects on those already benefiting from it.

Thronson said she knows of DACA participants who are research assistants at Michigan State.  Another created her own business, she said.

“She started a business where I think she has four or five employees so not only are they [DACA recipients] contributing, they’re also employing other people,” Thronson said. “And so the impact is just going to be tremendous.”

Michigan’s economy could lose hundreds of millions of dollars if the children of undocumented immigrants are deported, according to some analyses.

However, much uncertainty remains on the scale of the potential loss as the result of the Trump administration’s push for a plan to end the Deferred Action for Childhood Arrivals program.

That program — enacted under former President Barack Obama — protects children brought to the United States by undocumented immigrants. To qualify, most had to enter the U.S. before they were 16 and live here since June 15, 2007.

A liberal think tank, the Center for American Progress, based in Washington, D.C., pegs the economic loss at nearly $390 million for Michigan and nationally at $433.4 billion over the next 10 years. The conservative Cato Institute, also in Washington, puts the national figure at $280 billion over the next decade.

DACA allows these undocumented immigrants to apply for a two-year period of deferred action on deportation and to apply for a work permit. It does not give them legal status as a citizen.

Trump moved to end DACA Tuesday, giving its nearly 800,000 participants a six-month delay before they are eligible for deportation.

The onus is now on Congress to replace the program before the six-month delay ends.

The Center for American Progress estimates there are 5,982 Michigan DACA participants and that 5,204 of them are employed.

The Washington, D.C., Migration Policy Institute estimates that 15,000 Michigan residents are eligible for the program.

Experts say that the loss to the economy comes from losing potential workers.

Many participants are also pursuing high -evel degrees which will translate into employment in high skilled jobs,  Thronson said.

Much of the uncertainty shinges on how or if Congress adopts a new law regarding DACA.

“In that case the effects are likely to be small,” said Charles Ballard, an economist with the Institute for Public Policy and Social Research at Michigan Statey.

The approximately 6,000 Michigan DACA participants could have a small economic impact in a state of 10 million residents, Ballard said. It would fall more so on the individual than on the economy as a whole.

As for highly skilled workers being removed from the economy, Ballard said he believes it wouldn’t be “devastating” to the economy in Michigan but would present a challenge to employers.

“If you’re an employer and you have a few of your top workers and all of a sudden they’re gone, that hurts your business — no question about it,” Ballard said.

Canada might be a benefactor if Michigan DACA workers are deported, he said. Many might choose to move there instead of facing deportation to a country which doesn’t speak English as a primary language.

“If we basically export thousands of highly skilled workers to Canada, that’s a win for Canada and a loss for the United States,” Ballard said.

Removing potential skilled workers harms the economy, Ike Brannon, a visiting fellow at the Cato Institute, wrote in an email.

“We’d basically be taking almost a million potential workers, all of whom have or are receiving post-high-school education, and are consigning them to the informal/underground work force,” Brannon wrote. “When the unemployment rate is below 4.5 percent, the issue isn’t that we have skilled people who are looking for jobs

“It’s that we have occupations that are wanting for skilled people, and we’re removing people who fill those needed positions, Brannon said.

Michigan universities offer help for undocumented students

By CHAO YAN

Capital News Service

LANSING — Several public university officials in Michigan said they will continue to work to keep tuition rates lower and campuses friendly for undocumented students, even as the federal government launches policies that are viewed as unfriendly to many immigrants.

President Donald Trump ordered the construction of a Mexican border wall on Jan. 25 and is expected to curtail immigration, which has caused stress among undocumented students.

In 2012, President Barack Obama launched the Deferred Action for Childhood Arrivals (DACA) program, which granted undocumented immigrants work permits and temporary residency, a status that must be renewed every two years.

As of September 2016, Michigan had nearly 11,000 approved DACA recipients and was ranked 24th in the nation, according to U.S. Citizenship and Immigration Services. Continue reading

State’s ag exports to China skyrocket

By MICHAEL KRANSZ
Capital News Service

LANSING — In the past five years, more and more of Michigan’s dairy products and prepared fruits and vegetables have been on their way to China, according to export data from Euromonitor International Ltd.

From 2010 to 2014, the dollar value of dairy product exports to China skyrocketed 688 percent, according to the London-based economic analysis firm. In that same time period, the dollar value of prepared fruit and vegetable exports, which include dried tart cherries, rose almost four-fold.

Chris Wolf, a professor of agricultural, food and resource economics at Michigan State University, said U.S. dairy products — specifically powdered milk — took hold in the Chinese market following that country’s baby formula scandal in 2008.
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International students with startups face visa difficulties

By YUEHAN LIU
Capital News Service

LANSING—International students face daunting challenges starting a business.
But as more and more international students enroll at Michigan universities, more and more keep trying to open businesses in the state.

And the Small Business Association encourages their idea.

For example, Grand Valley State University has 400, Western Michigan University has more than 1,800, and Michigan State University has more than 7,000 international students.
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Michigan aims to capture Chinese tourist market

By ZHAO PENG

Capital News Service

LANSING — The number of Chinese travelers and the amount of money spent per visitor are the highest among all groups of international visitors, according to the U.S. Travel Association.

This potential tourism market is capturing the attention of Michigan’s government.

For the first time, Gov. Rick Snyder included tourism in the agenda of his recent investment mission to China and touted Michigan’s potential as a destination for international travelers.
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New visa rules mean increased efforts to attract Chinese visitors to Michigan

By CHEYNA ROTH
Capital News Service

LANSING — The U.S. is making it easier for Chinese residents to visit the United States, and Michigan is working hard to take advantage of this new economic opportunity.

Leisure visas into the United States from China are now good for 10 years, which makes it cheaper and easier for Chinese tourists to come and go. A rising economy and growing upper middle class mean Chinese visitors can stay longer and spend more than they used to, tourism officials said.

About 1.8 million Chinese tourists traveled to the U.S. in 2013, according the U.S. Office of Travel & Tourism Industries. In 2014, a little over 1.9 million had visited by October.
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