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Agricultural economist

Agricultural economist

Two decades ago, at a time when the industry had yet to produce more than 60 million boxes of apples and Red Delicious made up almost 75 percent of the crop, agricultural economist Dr. Des O’Rourke warned that it would be difficult for Washington to hold onto its market share because of the predominance of Red and Golden Delicious.

He saw a need for the industry to focus on quality and for scientists to engineer quality into new varieties through bioengineering, which would require more investment in research.

And, with the prospect of much larger crops, he saw the need to invest more in export promotions in order to keep the volume of fruit going to the domestic market at a profitable level.

Since then, Washington’s fresh crop has grown to more than 100 million boxes, while Red Delicious has slipped to about 30 percent of the crop.

Here are O’Rourke’s predictions of what’s in store for the industry during the next decade:

1 The rate of change in society, economics, and business will continue to speed up. Only firms that are well-financed and can respond rapidly to change will survive.

2 Demography is destiny. Populations are aging and beginning to fall in the developed world. However, in the next decade, the world will add a billion people, almost all in the developing countries of Asia and Africa, and almost all in urban areas. Exporting will become even more vital to the apple industry.

3 Competitors such as Chile, New Zealand and China have caught up with Washington State in tapping world fruit markets. Other challengers like Turkey, Brazil, and Poland will also get stronger. Chinese apples will gain access to the U.S. market. Washington State will have to keep improving in every facet of its business to retain its share of domestic and export fruit markets.

4 Traditional fruits such as apples, pears, bananas, and oranges will continue to lose ground against competing fruits and berries without a major, sustained promotional effort.

5 The next generation of consumers will place many new demands on producers and marketers of apples. The apple industry will need to invest heavily in understanding and reaching this new generation.

6 The United States and many other countries have been on a borrowing and spending binge. Within the next decade, the piper will have to be paid in higher taxes, higher inflation, and devaluation of the U.S. dollar.

7 The number of growers and marketers in Washington State will continue to shrink at a rapid rate. The small, commercial grower will truly be an endangered species.

Without a radical rethinking of how to face these challenges, the apple industry in Washington State will face continual struggles.