United States apple growers are harvesting a big crop—the third largest ever—but that’s a small part of the big picture. The U.S. crop is only about 6 percent of world production, and there are lots of apples elsewhere, especially in China.
And, more than usual this year, political events are affecting plans for selling those apples.
Decisions by European and American leaders designed to punish the Russians for their activities in Ukraine resulted in Russian retaliatory moves, including the banning of produce imports from the United States and the European Union.
The ban led to an appeal for help from Poland—the largest apple producer in Europe with Russia as its major market. In an act of patriotic defiance, the Poles urged their people to consume more apple juice to make up for the market loss. But they also asked for help from other countries to share the burden placed on Polish growers.
Meanwhile, the Chinese are managing their apples in ways that will allow them to export more to Russia, and growers in South America are tuning their exports to send more apples to Russia as well.
All said, there is a lot of market turmoil, but the Russians will probably eat as many apples as they would in normal times.
All this was grist for the mill during the U.S. Apple Association’s Outlook and Marketing Conference in Chicago August 21-22.
What U.S. growers know about Chinese apples depends in large measure on one man—Michael Choi, president of Zhonglu America Corporation, a wholly owned U.S. subsidiary of Zhonglu Fruit Juice Company, China’s oldest and one of the world’s largest apple juice concentrate producers.
Each year, Choi reports on the size of the Chinese apple crop and how they intend to market it. For several years, he has reported crop size growing at about 6 percent per year, and this year is no exception.
Choi expects the Chinese crop to top 40 million metric tons for the first time; he pegged the number at 41 million, which is more than 2 billion bushels and some 54 percent of world production.
“I think they’ll sell more to Russia,” Choi said. “Somebody’s unhappiness becomes your opportunity,” he added, philosophically.
The Chinese eat 83 percent of their apples fresh. They import very few apples, but they like American Red Delicious, which are favored as gifts because of their shape and color.
They like sweet apples and grow mainly Fuji, but are planting more Gala. Because the Fuji and Gala crops in China are short this year, Choi said, growers are managing more of their processing blocks for fresh market, and he expects export of apple juice concentrate will follow the declining trend it has been on for a few years now.
What Choi is to information about China, Philippe Binard is to information from Europe. Binard reports each year from his position as secretary general of the World Apple and Pear Association in Brussels, Belgium.
The apple crop in Europe last year was medium in size. This year it’s larger, about 12 percent above average, he said. He pegged the crop size at 12 million metric tons, or 624 million bushels. About 30 percent of the crop is grown in Poland.
The market is facing “severe geopolitical challenges,” he said, referring to the embargo on produce imports by Russia.
The Polish crop is expected to be 3.5 million metric tons (186 million bushels), up 13 percent and its largest crop in decades. Even before the situation in Ukraine, the Russians were showing some political dissatisfaction with the Poles, Binard said, and initially banned apple imports from Poland for phytosanitary reasons. The Poles responded with an “eat more apples” domestic campaign before appealing to other countries for help marketing their apple crop.
Donald Werden, who manages sales and logistics for the Norfolk Fruit Growers Association in Simcoe, Ontario, reports each year on the apple crop in Canada. He put the Canadian apple crop at 22 million bushels, slightly larger than last year and the largest crop since 2007.
Breaking it down by province, he put the Ontario crop at 9 million bushels, which is down 6 percent from last year. Ontario produces about half of Canada’s apples.
The British Columbia crop he estimated at 4.5 million bushels, up 16 percent from last year.
Quebec production is down 2.5 percent to 6 million bushels. Nova Scotia growers suffered a massive fire-blight infection this year, as foliage was damaged by Hurricane Arthur on July 4, and some fruit bruising may have resulted from that. The crop is expected to be up 6 percent to just over 2 million bushels. New Brunswick will contribute 170,000 bushels.
Canadian growers, always heavy to McIntosh and related varieties, are changing over to modern varieties like Honeycrisp, Ambrosia, and Gala, and to high-density plantings. Interestingly, however, Ontario’s top variety this year will be Northern Spy.
Production in Mexico last year was a record “and a major disaster,” according to Leighton Romney, who reports each year from his position as CEO of Paquime Group in Chihuahua, Mexico. The group produces, imports, and distributes apples, peaches, and other fruits.
The 2013 crop of 24.5 million bushels, 50 percent larger than normal, was met with a shortage of labor, bins, and controlled-atmosphere storage space, Romney said, and poor quality apples were being marketed from common storage late in the marketing season.
Prices are low now, he said, but he expects them to recover by November when the smaller 2014 crop comes to market. He estimated the crop size at 16 million bushels.
There are essentially two markets for apples in Mexico—one for imported apples from the United States, which might sell for $18 a box while a box of domestic fruit sells for $5. An impending increase in the minimum wage in Mexico should make imported fruit more affordable to shoppers there.
Rene Alarcon, South American manager of Carlos Steffens, Inc., a brokerage company located in Santiago, Chile, reported that freezes cut this year’s South American production to 695,000 metric tons (36.5 million bushels) in Argentina, 1.2 million metric tons (64 million bushels) in Brazil, and 1.6 million metric tons (84 million bushels) in Chile, he said.
South American growers export to markets all over the world. Only Chile sends a significant share to the United States.
“South American growers will likely send more apples to Russia,” he said, but that would be from the next crop that will be harvested in March, 2015, and not from the 2014 crop.