The Washington State apple industry is reflecting on a stellar season that has seen record packouts and strong FOB prices across all varieties. And the high prices look set to continue in the coming months as stocks are running short while the new season is crop running late.
“We’ll be entering the new season with `distribution` pipelines all but empty,” Dave Martin of Stemilt Growers told Fruitnet.com. “With the 2011/12 deal running at least two weeks late, there will no new crop of Red Delicious available probably until early October.”
Thanks to unprecedented demand from both domestic and international markets, the industry expects to market more than 109m (18.1kg) cartons for the 2010/11 season, eclipsing the previous record of 108.3m cartons set two years ago. With FOB prices already hovering at stratospheric levels and likely to climb even higher during September, some marketers are concerned the Washington industry may risk repeating the dilemma of the start of the 2008/09 season.
That season also began with FOB prices at record levels coming off a relatively short 2007/08 crop. As the 2008/09 crop turned out to be a record setter, the Washington industry needed to set about moving product out of bulging cold storages. That didn’t happen, however, as marketers, looking to do their best by their growers, hung on to the high FOB prices. But that strategy backfired as market demand suddenly tanked due to the on coming global recession and a rapidly appreciating US dollar. The Washington industry ultimately moved its record crop into the marketplace but at far lower prices than those of the year before.
“There needs to be a transition to more realistic prices as the new season gets going,” said an export manager for a major Washington apple marketer. “If not, we could see a repeat of two seasons ago where the industry fell way behind in moving the crop. It’s particularly important this year as we’re likely to lose a couple of weeks of selling with the crop being so late.”
Lighter crop forecast
Heading into the new season, it doesn’t appear that the 2011/12 crop will be a limb-buster, however. According to the industry’s initial estimate for the coming season, the 2011/12 Washington apple crop is put at approximately 106.3m cartons - or about 3 per cent down on the 2010/11 crop now just winding down.
The industry is still weighing up the impact of chilly spring, with some local media reports indicating that fruit sizes could be smaller and sugar levels lower, but trade sources said that the situation would not be clear for another couple of months.
Among the highlights of the industry’s crop estimate is that Red Delicious packout will drop slightly from 34.1m to 33.5m cartons; Gala will continue to be the second leading variety in volume with an estimated 22.3m cartons; Fuji packout is forecast to drop by 9 per cent to 13.7m cartons, while Granny Smith is estimated to total 12.6m cartons – down by approximately 3 per cent on last year’s levels.
If the industry’s pre-season forecast of 106.3m packed cartons is on the mark, it will be the third-largest crop in its history. Not that many years ago, the prospect of a 100m-carton season would have been a daunting prospect to the Washington industry, but that’s no longer the case.
According to Randy Eckert of Yakima Fresh, 100m cartons is now considered a relatively light crop. “One of these years, everything will come together and we’ll see that 120 million crop that we all know is out there,” he told Fruitnet.com.
Export markets key to future growth
“A 120m carton season for our industry is imminent,” agreed Todd Fryhover, president of the Washington Apple Commission (WAC). “That makes it all the more imperative that we continue to develop export markets to find homes for that future production.”
The Washington industry appears to be making headway toward that goal.
“This last season may turn out to be an all-time record for exports for the industry,” said Charles Pomianek of the Wenatchee Valley Traffic Association. “All we need is 1.3m cartons shipped during August and we’ll top 36.14m cartons that were shipped in 2008/09.”
According to industry sources, India registered the biggest increase in imports over the last year, jumping by 143 per cent to 3.34m cartons and making the South Asian country the largest destination for Washington exporters. China’s official imports, while officially down slightly from the year before at 713,000 cartons, are probably closer to the 2m-mark thanks to continued movement of product through “grey-channels” via Hong Kong and Taiwan. Indonesia also continues to impress as a market, jumping by over 49 per cent to 2.4m cartons last season. Other Asian markets showing substantial increases in volume last season include Vietnam at 547,800 cartons (up 78 per cent); Malaysia at 462,000 (up 32 per cent) and Thailand at 920,000 (up 23 per cent).
“We plan to focus more of our promotional efforts on high growth markets for the coming season,” said Rebecca Baerveldt, manager of strategic planning for the WAC. “India, China and Indonesia are all being targeted as their retail sectors continue to develop.”
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