The true value of Washington apples
For many years, statisticians have used “farm gate value” as a term to describe how well farmers, or groups of growers, are doing. Generally, price multiplied by production volume gives a number, and numbers can be compared from year to year.
Perhaps surprisingly, the phrase “farm-gate value” does not appear in the new report entitled The Washington Apple Industry: Contributions to the State Economy and the Important Role of Exports.
Yes, you can find the value of the crop. For the year 2010-11, the value of apple orchard production in Washington State was almost $1.4 billion, according to the report. That’s what growers got for all the apples they sold.
But the bigger number the report wants to give its readers is $7.0 billion, the total value “induced” to the Washington economy by growing, packing, processing, and marketing of apples.
The last paragraph of the 25-page report explains why growers want people to know that bigger number.
The apple industry “needs continuing supportive policies from local, state, and federal governments if it is to achieve its full potential as an engine of economic growth.” In other words, apples are not just about apple growers.
Apples make up 80 percent of Washington’s fruit crop. The industry provided 59,650 jobs—in orchards, packinghouses, and elsewhere—paying workers $959 million.
This $7 billion industry’s economic activity generated tax revenues—$189 million to state and local governments and $300 million to the federal government—and revenues of $2.1 million for public land leased to orchardists.
“The Washington apple industry is large, progressive, and poised for further growth if current favorable conditions continue,” the report says. “However, the industry’s ability to maintain or expand its contribution to the state economy will depend heavily on its ability to maintain robust domestic sales and strongly expand exports.
“The industry faces many challenges, include numerous competing fruits, regulatory hurdles, trade barriers, rising costs for energy and other inputs, and a wide array of international competitors.”
The report was commissioned by the Washington Apple Commission and compiled by Globalwise, Inc., of Vancouver, Washington, and Belrose, Inc., of Pullman, Washington. Commission President Fryhover contacted apple industry companies to encourage their support, and more than 20 of them provided information usually kept confidential to help generate the study’s financial data.
Fryhover, in an interview with Good Fruit Grower, said, “the study was aimed at everybody not in the apple industry. Agriculture is taken for granted, and we want people to know we create jobs and opportunity. We decided to tell our story.”
The state is not helped by the barrier created by the Cascade Mountains, which puts people and political power on the west side and much of the fruit on the east side. People can’t easily see the apple industry.
The report was sent to Washington growers, to members of Congress, and to the media electronically, so there are no printed copies of the report unless made by those who received it.
“The message is, we’re a great industry,” Fryhover said. “Agriculture is a bright spot in the economy. We’re part of the solution.”
One key motivation for the study is the need to export more apples. While a third of Washington’s production is exported, the industry’s capacity to produce new varieties in high-density orchards suggests there will be many more apples to market. If these need to be sold in the domestic market in the future, grower income is at risk, the report says.
“Growers, packers, processors, and marketers of Washington apples are optimistic and growth oriented. Their contributions to the Washington economy are very significant. Future prosperity very much depends on continued industry competitiveness in both domestic and global markets,” the report says. “However, there are persistent obstacles such as shortages of labor and higher regulatory costs that could restrict future business growth. Supportive government policies will be invaluable to keeping the Washington apple industry on an upward growth path.”
The apple industry is challenged in several significant ways, the report says. “An adequate supply of harvest labor ranks very high among necessities for this industry to grow and prosper. As annual production increases, it has become more difficult for Washington growers to secure enough qualified workers. Federal policy regarding immigration has not yielded a viable solution for growers to attract the workforce that is needed.”
Another challenge is food safety regulations. New produce safety rules are coming, and if these are not practical and flexible in their application, the apple industry could see its food safety compliance costs rise sharply, the report says.
“The apple industry is also an intensive user of water, energy, and transportation. There are many competing claims on these services. It will be a continual challenge to secure adequate supplies of these services at affordable prices.”
The report is also a compilation of historical data about the Washington apple industry—its growth in production and the gradual movement to better returns to growers through new varieties, higher prices, and better packout, the growth of storage capacity and the adoption of controlled atmosphere storage, and apple treatment with Smartfresh and its impact on the industry.
The industry has an outstanding record of progressiveness, the study says. The Washington Apple Commission has made the Washington apple logo recognized around the world. The Washington Tree Fruit Research Commission, created in 1969, has supported funding and research and led the way to Congressional approval of the Tree Fruit Technology Roadmap.
A year ago, apple and pear growers agreed to assess themselves $27 million over the eight years to support additional research at Washington State University. This gift is the largest in WSU history and will expand emphasis on research and development to help the apple industry keep a global competitive edge for growing and shipping apples into the future, the report says.
The Washington Apple Education Foundation, which awards several hundred thousand dollars in scholarships and grants each year, helps contribute skilled and well-educated people to the community.