The Washington Apple Commission is strengthening its export efforts in anticipation of larger volumes of apples coming onto the U.S. market in the next few years.
This season, Washington State produced 129 million packed boxes of apples—about 20 million more than ever before. Yet the industry has enjoyed one of its best seasons ever with f.o.b. prices averaging more than $25 a box so far.
Washington’s good fortune has been largely at the expense of apple growers in other parts of the country, such as Michigan and New York, whose 2012 crops were decimated by spring freezes. Michigan harvested only about 3 millions bushels, compared with a normal crop of 25 million and New York picked 14 million boxes, barely half its average production, giving Washington an opportunity to fill the market.
“We dodged a bullet,” said Todd Fryhover, president of the Washington Apple Commission. “It’s been a fantastic year—the best year we’ve ever had.”
Though the 2012 eastern crops might be an aberration, large crops in Washington are not. Production is expected to continue to increase because of new plantings.
The Apple Commission is gearing up for a 120-million-box fresh crop in the coming season. With Michigan expecting to produce 40- to 45-million-box crops within the next five years and New York forecasting 50 million boxes within three years, Washington growers could find themselves in a much more crowded domestic market, Fryhover said. A portion of Michigan and New York apples go to processors, but the trend is to ship more into the fresh market.
“We’re going to have to increase demand,” he told the commission’s board at their annual meeting on March 28.
The domestic market, which has been fairly flat, has taken 73 million boxes of Washington apples on average over the past decade. If the total Washington crop is 120 million boxes, the industry will need to ship 47 million boxes into the export market—10 million boxes more than ever before.
The commission is putting an additional $500,000 from reserves into export promotions for the coming year. The total export budget will be $6.65 million, of which just over $2 million will come from grower assessments and $4.6 million from federal Market Access Program funds.
Rebecca Lyons, the commission’s international marketing director, said no single market can absorb the increasing apple volume. The commission’s strategy will be to increase immediate export sales while building the Washington brand in order to expand markets for the long term.
Mexico is Washington’s largest export market, taking more than 10 million cartons in the 2011-2012 season. This season, Mexico’s own growing region, Chihuahua, had a short crop and shipments could be even higher. Mexico is a good market for Red Delicious and the only significant market for Golden Delicious, but Gala and Fuji are increasing in popularity there. A promotion in the coming season will tie in with the 2014 World Cup soccer tournament.
The commission will also place a big focus on India, which is considered a prime market for development. India imported 4 million boxes of Washington apples last season.
No promotions are planned in China, which has been closed to Washington apples this season because of detections of postharvest diseases. Closure of the market is thought to be linked to China’s pending request to ship its apples to the United States, Jim Archer, manager of Northwest Fruit Exporters, told the commission’s board. Direct shipments to China totaled 413,000 boxes during the 2011-2012 season. Some of the 2 million boxes shipped to Hong Kong would also have gone on to China.
Shipments to Indonesia have been limited since November because of restrictions and quotas placed on foreign food imports to that country. Exports this season are down 50 percent from last year.
Indonesia took almost 2.5 million boxes last season, and Mark Powers, vice president at the Northwest Horticultural Council, said the industry was hoping it would become a 3-million-box market. The restrictions affect other countries and other types of produce, but not U.S. cherries or pears. Powers said the situation appears to be linked to internal political issues and power struggles in the run-up to the 2014 presidential election, so it cannot be easily resolved at the trade level. “The reasons have nothing to do with the outside world,” he said.
Since diplomatic efforts have failed, the U.S. government is looking at litigation, a process that could take another year or year and a half. As Washington looks to export larger volumes, market access will be critical, Fryhover said. “If we don’t have access, we can’t have promotional programs.”