KENNETT SQUARE, PA — South Mill Champs says a preliminary U.S. trade ruling targeting Canadian mushroom imports could increase costs for buyers and establish a legal precedent with implications that extend beyond the mushroom industry to agricultural producers across North America.
The Kennett Square-based mushroom producer is challenging a preliminary countervailing duty determination issued by the U.S. Department of Commerce involving fresh mushroom imports from Canada. The trade case was initiated by competitor Giorgio Fresh Co.
Under the preliminary ruling, U.S. importers of affected Canadian mushrooms became subject to cash duty deposit requirements, which began on May 18. Those additional costs could ultimately be passed on to consumers through higher prices at grocery stores and restaurants.
South Mill Champs argues the Commerce Department’s determination is based largely on provincial tax exemptions available broadly to Canadian agricultural producers rather than benefits targeted specifically to mushroom growers.
The company also raised concerns about a separate Commerce inquiry examining cash-basis taxation, an accounting method widely used by farmers in both Canada and the United States.
According to South Mill Champs, treating cash-basis taxation as a subsidy could have broader implications for agricultural producers whose operations depend on matching tax obligations with seasonal revenue cycles.
Chief Executive Officer Lewis Macleod said the company intends to challenge the determination throughout the review process.
“The suggestion that our Canadian operations are propped up by targeted government subsidies is wrong on the facts and wrong on the law,” Macleod said.
The dispute highlights tensions within the North American mushroom industry as producers compete for market share while navigating trade rules governing cross-border agricultural commerce.
South Mill Champs contends that Canadian mushroom production complements rather than displaces U.S. supply, helping meet demand that domestic growers do not fully satisfy.
The company employs more than 600 people and operates across the United States and Canada. Pennsylvania remains the center of the U.S. mushroom industry, accounting for roughly 69% of mushrooms sold nationally, according to the company.
The Commerce Department’s determination remains preliminary. The U.S. International Trade Commission must separately determine whether imports caused material injury to the domestic industry before duties can become permanent.
If the commission finds no material injury, the duties would be terminated regardless of Commerce’s subsidy findings.
Final countervailing duty and antidumping determinations are expected in December 2026.
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