Washington apple producers, who reaped record returns on Washington apples the last couple of seasons, are reinvesting in orchards and packing plants.
While growers are ordering trees for updating or expanding their orchards, packers are gearing up to handle larger volumes of apples.
Washington Fruit and Produce Company in Yakima, Washington, is about to double its packing capacity with a new sorting and packing line at River Road. The facility will be able to process 500,000 bins of apples (about 10 million packed boxes) per season when it’s completed next year.
Jon DeVaney, executive director of the Yakima Valley Growers-Shippers Association, said investing in facilities makes sense when interest rates are so low. There’s no incentive to put money in the bank, and borrowing money is cheap.
Several packers in the Yakima district have recently built new packing facilities, upgrading packing equipment so it can handle a greater volume of fruit, or built more controlled-atmosphere storage.
An economic study commissioned by the Washington Apple Commission shows that orchard proprietors’ direct income statewide rose from $260 million in 2010-2011 to $642 million in 2012-2013, the season when the state sold a record apple crop at record prices.
Packing proprietors’ direct income increased from $108 million to $251 million during the same period, according to the study, which was compiled by Globalwise, Inc., and Belrose, Inc.
“They’ve had several very good years, and there’s been enough profit margin and cash flow to make some investments for the future,” DeVaney said.
Charlie Pomianek, manager of the Wenatchee Valley Traffic Association, said it’s been a similar scenario in the Wenatchee district, with several packers updating or expanding their plants and building more storage. In addition, a number of companies have been looking for storage to rent for the coming season because they don’t have enough for the crop they’re expecting to handle.
The last survey of fruit tree acreage in Washington, compiled in 2011, showed that there were 167,500 acres of apples planted in the state. Based on that survey, agricultural economist Dr. Desmond O’Rourke predicted that the state’s apple production would reach between 115 and 128 million packed boxes by the end of this decade—volumes that were actually reached within just one year.
In 2012, Washington produced a record 129 million packed boxes, which sold at record prices, largely because of crop failures in other growing regions.
“It surprised everyone we got there as quickly as we did with the 2012 crop,” DeVaney said.
The 2013 crop, estimated at 115 million boxes, is considered the off year, so 2014 is expected to be another on-year with the potential to set a new record of 140 to 150 million packed boxes, or more.
With growers around the state busy planting more orchard this spring and most nurseries sold out of trees for the next two to three years, production looks set to increase even further as those trees come into production.
Scott McDougall, a partner at McDougall and Sons, Wenatchee, said his company has been building its own apple tonnage over the past few years to reduce its reliance on outside growers and to boost production of its proprietary varieties, such as Ambrosia and the New Zealand varieties Jazz, Pacific Rose, and Envy.
Last year, the company built an additional CA storage facility north of East Wenatchee, and this year, it will add a high-capacity packing line.
McDougall said he assumes that with the amount of planting that’s gone on, Washington crops will increase further but the industry is in a better situation than it was 15 years ago when the crop was heavy to Red and Golden Delicious.
“It’s definitely improved that we have this mix of varieties, but the other thing that’s improved is we have fewer people selling the fruit,” he said. “There used to be a tendency where we had a lot of people selling in big crop years and, particularly with limited varieties, somebody would keep lowering the bar and the rest of us would have to follow.”
Todd Fryhover, president of the Washington Apple Commission, said even with the prospect of more fruit to sell in the future, planting and replanting is a positive trend.
“Everything that’s going in the ground now and has been going in the ground for probably the last five to ten years are the newer and better varieties,” he said. “They’re planting them because there’s perceived demand for the tastes and textures consumer want. It’s a very positive thing for our industry.” •