Washington apple growers are pinning their hopes on a successful export season as the forecast for the new crop volume continues to rise, putting downward pressure on prices, according to a report by Capital Press.
The Washington State Tree Fruit Association now estimates the crop at 142.3m 40lb cartons, an 8.7 per cent increase on the forecast issued on 1 August.
This would make it the second biggest harvest ever after 2014’s record 143.6m carton crop. That was a year of poor grower returns, but this year it is hoped that lighter crops in Europe and elsewhere will fuel overseas demand for Washington apples.
“The large crop means marginal downward pressure on prices but exports are doing well, and if that continues it will really help,” said Desmond O’Rourke, retired Washington State University agricultural economist and world apple market analyst.
A substantial part of the crop is Red Delicious, which Asian countries like, O’Rourke said. Nonetheless, he suggested that marketers would struggle to maintain current prices for the next couple of months. Prices have slid some in the last month or two, typical after being higher in August at the start of harvest.
“The wild card is how soon will the European crop wind down. They’ve had a much smaller crop and that will shift exports our way,” said Tom Riggan, general manager of Chelan Fresh Marketing, one of the state’s leading sales desks.
The shift will come in January and already European and Middle East customers are inquiring more about Washington apple availability and prices than they typically do this time of year, Riggan said.
“That tells us supply is tight over there. One customer wanted a certain volume and price and we said we needed another price. They came back a week later and were OK with it,” he said.
Exports got off to a slow start because this year’s crop was later than those of the last two years, O’Rourke said. As of 1 December, the industry had exported 8.3m cartons of apples compared to 8.8m at the same point a year ago. But the pace is picking up with good movement to Mexico and India, he said.
Season-to-date, domestic and export shipments totaled 29.6m cartons as of 1 December. That’s 20.8 per cent shipped this year versus 25.6 per cent a year ago.
There’s already significant pressure on Red Delicious and Gala prices. Pressure will increase on Granny Smith, Honeycrisp and Fuji due to large volumes, O’Rourke said.
The 1 December estimate shows 34.4m cartons of Red Delicious, 32.8m of Gala, 20.9m of Granny Smith, 18.7m of Fuji, 11.9m of Honeycrisp, 7.7m of Golden Delicious, 5.4m of Cripps Pink, 1.8m of Ambrosia, 1.3m of Braeburn and 504,000 of Jonagold. The rest of the crop consists of minor varieties and a growing amount of proprietary varieties.
The estimates for Gala, Granny, Honeycrisp and Ambrosia would be record highs. The estimates for Fuji and Cripps Pink are the second highest, O’Rourke said.
The Granny Smith volume is OK because there is tremendous demand and movement domestically and overseas, Riggan said. Prices will stabilise at the end of January and climb a little as the crop shrinks, he said.
Good weather allowed harvest to run to the end of November with some marginally profitable apples left on trees due to not enough pickers, Riggan said.
The national fresh crop on 1 December was 131.1m 42lb cartons, 9 per cent more than the previous year. The total fresh and processing crop was 182.5m cartons, up 12 per cent from last year and 18 per cent from the five-year average for that date, according to the US Apple Association.
The larger national inventory pressures prices, but the smaller crops in Europe, Mexico and Canada help, O’Rourke said.
Washington growers are barely breaking even on Reds, Gala, Goldens, Braeburn, Cameo and Jonagold and making money on Honeycrisp, Granny, Fuji and proprietary varieties, he said.
“Overall, it will be a breakeven year on profitability for growers unless they have premium varieties,” O’Rourke said. “Integrated companies will have more packing and marketing fees with a larger crop so they will do OK, but they have big investments on new orchards.”
As of 8 December, USDA tracking of average asking prices among Yakima and Wenatchee shippers for extra fancy (standard grade) medium size 80 and 88 apples per packed box: US$14-17 for Red Delicious, basically unchanged from November and October; Gala was US$18-24 on 80s, down from US$20-26 a month ago and US$24-28 two months ago; Gala was US$16-22 on 88s, stable from a month ago and down from US$22-26 two months ago.
Generally, US$17-18 per box is breakeven on major varieties.
Honeycrisp was US$44-52, mostly US$48-52, on premium 80s and 88s, down from US$54-62 for both a month ago and US$70-76 for premium 80s two months ago and US$65-75 for premium 88s two months ago.
Granny Smith was US$34-38 for 80s, down from US$36-40 a month ago, and was US$28-34 for 88s, down from US$32-38 for 88s a month ago. They were US$42-46 for 80s and US$40-44 for 88s two months ago.
Fuji was US$24-28 for 80s and US$22-26 for 88s, down from US$26-30 for both a month ago.
Golden Delicious was US$24-28, close to the same as a month ago but down from US$30-34 two months ago.
