Commerce Correctly Calculated Production Costs in Argentinian Honey Investigation, DOJ, Intervenors Argue at CIT

The Commerce Department correctly calculated production costs in its final determination in an antidumping duty investigation on raw honey from Argentina, DOJ said in its March 3 response to a motion for judgment at the Court of International Trade (Nexco v. United States, CIT # 22-00203).

The response, along with a similar brief by defendent-intervenors -- the American Honey Producers Association and the Sioux Honey Association -- defended Commerce's use of both high inflation and alternative cost averaging methods in a case involving difficult-to-obtain production data.

Nexco asked for the case to be remanded to Commerce in a November motion for judgment, arguing that the department erred by not basing Nexco’s costs of production on verified actual costs of producing raw honey from beekeepers. The department also should have used quarterly, instead of monthly, average costs in calculating price comparisons, Nexco argued.

Nexco's argument that Commerce "impermissibly deviated" from using cost data from unaffiliated growers falls flat, DOJ said. Early in the investigation, Nexco pushed for Commerce to use acquisition costs after the department explained the difficulties of obtaining production costs from actual honey producers, which were "scores of small unsophisticated beekeepers" with limited records. Commerce provided a lengthy explanation of its practice based on "[Nexco]'s own request to use its acquisition prices," DOJ argued. Nexco failed to exhaust its administrative remedies regarding production costs because it failed to raise them during the investigation, DOJ said.

Nexco's argument that Commerce should not have used monthly price-to-price comparisons is without merit, DOJ argued, saying that the relevant statute is "silent concerning the time periods used to calculate weight-average U.S. prices ... ." Commerce’s regulations "explicitly" allow it to depart from the standard period-wide weighted averages when normal values or U.S. prices change significantly, DOJ said, "for example, in a market experiencing high inflation."

DOJ also defended Commerce's use of its high inflation methodology in conjunction with its alternative cost averaging method, arguing that the combination "minimizes the extent to which calculated dumping margins are overstated or understated due solely to inflation." Commerce determined that the cost of raw honey was "the primary driver" of the overall change in cost of manufacturing. Because Nexco’s honey acquisition costs were driving the sales price changes, the use of the alternative cost averaging methodology was warranted, DOJ argued. Even though both the comparison market and the U.S. market sales were conducted in U.S. dollars, high inflation methodology was warranted because "[Nexco]’s sales prices were affected by high inflation ... because of the impact on its cost of production," DOJ argued.

Nexco brought the case in August, when it initially argued that Commerce inappropriately applied its affiliated supplier methodology, even though the beekeepers and middlemen were not related to Nexco (see 2208090054).