High hopes for apple deal, despite hail
This could be a strong season for apple growers whose crops escaped damage.
Though hail devastated the crops of many orchardists in Washington State this summer, the apple industry as a whole is looking for a banner year.
Prices soared towards the end of the 2005-2006, setting a positive tone for the coming season.
“The last twelve weeks of the season have been phenomenal,” said Reggie Collins, general manager of Chelan Fruit Growers Cooperative, a major fruit shipper in Washington. “Every week, the price continued to go up.”
Prices for most varieties began to edge up in May. The average price of Red Delicious rose from about $13 a box in mid-May to $22 by the end of August, according to the Washington Growers Clearing House Association. Similarly, the average price of Golden Delicious increased from around $13 a box in May to $24 by the end of the season. Prices for most varieties followed the same trend.
Dan Kelly, assistant manager at the Clearing House, said the volumes of apples shipped before May exceeded those of the previous season, when the state had a record 105-million-box crop. Even though this was the second-largest crop ever, at 100 million packed boxes, prices went up as supplies decreased.
Collins said Chelan Fruit was fortunate in that it had a large inventory to sell in the last three months of the season, because of the high quality of the fruit harvested in 2005. “We probably had 30 to 25 percent of our Red [Delicious] crop, and on the Goldens, we probably had 40 percent. It was very beneficial to our growers, and so our returns are much better than they were last year, and we’re very happy about that.”
However, returns for the average grower and below are still not meeting growing costs, he noted. Growers Clearing House reports show the average season-long Red Delicious price at $14.87, up from $10.50 for 2004-2005, and the Golden price at $15.32, up from $11.55 the previous season.
“While it’s better, it’s still not enough,” Collins said.
The Manson area at Lake Chelan was one of many parts of the state that were badly hit by hail this summer. Collins said Chelan Fruit estimates that 90,000 bins of its members’ fruit were affected, which represents 20 percent of the cooperative’s volume. About 60 percent of that fruit will be diverted directly to the processor.
Collins said his cooperative will not attempt to pack the fruit if it has more than 50 percent hail-damaged fruit in the bin, as it’s not known whether hail-grade fruit will sell or at what price.
To compensate for the lost throughput, Chelan Fruit has acquired an additional 30,000 bins of fruit from other parts of the state and is looking to reduce packing and handling costs. For example, it will move product from its facilities in Brewster and Pateros to Chelan for shipping, so trucks have just one pick-up point.
This is not the first year that the Chelan area has had to deal with extensive hail damage. There were storms in 1997 and 1995, also.
Overall, the industry is expecting a good year, Collins said. While the hail will hurt individual growers, it’s resulted in a manageable crop, and prices have started out strong for the 2006-2007 season. The predicted 92-million-packed-box crop would be Washington’s sixth largest, but down considerably from the volumes the industry has moved in recent years.
“We’re very optimistic because the pipeline is dry, there were very few imports left, and the crop cleaned out real well, and cleaned out on a high note,” he said in early September.
“As an industry, I think we should be optimistic, and if we communicate and work together as much as possible, we have an opportunity this year to sell this fruit for a profitable return for the grower.”