Honey Exporter Takes Umbrage at Commerce's Continued Use of Its Acquisition Costs as Proxy for COP

The Commerce Department failed to show on remand that antidumping duty respondent Nexco's acquisition prices are a "reasonable proxy for the cost of production of raw honey" as part of the AD investigation on raw honey from Argentina, Nexco said in remand comments at the Court of International Trade. Commerce's policy regarding unprocessed raw agricultural products where it bases cost of production on the cost of making the raw goods, even when the respondent isn't the producer, stands "in contrast to Commerce's policy regarding processed agricultural products where the exporter is the producer," the brief said (Nexco v. United States, CIT # 22-00203).

Nexco said the raw honey it exports "already meets the definition of the foreign like product at the time of its purchase" since it is identical to and made in the same country as the subject goods. As a result, the agency "has clearly determined that the beekeepers and middlemen, and not Nexco, are the producers of the foreign like product," making their costs, and not Nexco's acquisition costs, the cost of production.

Instead of using the beekeepers' costs, Commerce improperly continued to rely on Nexco's acquisition costs, the respondent claimed. Nexco said that the agency's remand attempts to dodge the analysis required by the trade court. The court in June ruled that it was reasonable for Commerce to shed its traditional practice of collecting cost data directly from the beekeepers, but remanded the use of Nexco's acquisition costs as a substitute for the suppliers' costs. Commerce stuck with its position on remand, employing a "reasonableness test" to find if the collected costs suggested that the beekeepers might be contributing to the dumping of raw honey below their own costs (see 2310130049).

The agency said that it doesn't matter whether the acquisition process "substantially overstate the beekeepers' actual costs" since the agency is only concerned with capturing all costs. Nexco said this rationale "stands on its head Commerce's longstanding practice regarding unprocessed agricultural products, which Commerce confirmed, before this court. It will virtually always be the case that exporters who are not producers of raw agricultural goods will not know the actual production costs of the growers or gatherers supplying them with the product." The agency's explanation that use of Nexco's acquisition costs is "reasonable" since they don't exceed Nexco's own production costs "is entirely non-responsive to the Court's instructions" and should be scrapped.

Commerce also said that it doesn't agree that the beekeeper costs establish that all supplier costs are necessarily much lower than the acquisition costs. "Once again, the issue on remand is not whether the beekeeper costs on record are 'necessarily' representative of 'all' beekeeper costs," the brief said. "Rather, the issue is, given these verified costs, which indisputably are only one-half and one-third of the prices those producers charged to Nexco, whether record evidence supports the conclusion that acquisition prices are a reasonable proxy for such beekeeper costs."