Exports are likely to assume increasing importance for Canadian growers facing woes in their domestic market, in particular spiralling US imports.
They are currently considering whether to formally call for anti-dumping protection measures against the US through the Special Imports Measures Act, following concerns over the high volumes coming in from Washington State.
Anti-dumping measures were imposed on US Red Delicious apples between 1989 and 1994, and again between 1995 and 2000.
However, the Canadian Border Services Agency, which holds the power to impose such measures, has not as yet launched an official investigation regarding the current concerns.
According to figures from the Washington Apple Commission, Canada imported five million boxes over the 2004-2005 season; second only to Mexico at 8.2m boxes.
“The bumper crop in Washington State has driven prices down,” says Farid Makki, senior market development advisor at Agriculture and Agri-Food Canada (AAFC). Providing market information and development initiatives, research and financial support, AAFC shares responsibility for the apple industry at government level with the Canadian Food Inspection Industry, which manages food safety, plant health and quality issues.
Fresh apple imports for 2004-2005 increased by almost eight per cent year-on-year to 146,297 tonnes, according to World Trade Atlas, with US apples largely accounting for the hike - up 20 per cent to 115,002t.
The rise saw the US boost its market share of Canadian apple imports by nine per cent to 79 per cent. Washington State sent over 30 per cent more apples across the border, at 101,836t or 89 per cent of total US exports to Canada.
Imports from the next three consecutive suppliers - Chile, New Zealand and South Africa - were down, while Chinese supplies were static. Canada also imports small volumes from France, Italy, Switzerland and Poland, albeit totalling a collective 269t for 2004-2005.
The Canadian apple industry accounts for less than one per cent of global production but even the top two global producers - China and the US - are reporting decreasing acreage over recent years.
A Canadian sector report by the US Department of Agriculture (USDA), dated September 15, forecasts a three per cent year-on-year drop in the Canadian apple crop to 360,000t for 2005. If realised, the figure will represent a 15 per cent drop on the 2000-2004 five-year average.
According to the Foreign Agricultural Service Global Agriculture Information Network (GAIN) report, of the five key producing provinces - Ontario, British Columbia, Quebec, New Brunswick and Nova Scotia - only the latter expects to increase production this year.
Statistics Canada reports a decrease of almost 17 per cent in apple production area since 2000 to 20,766 hectares.
Although partly attributed to improvements in yield per hectare, the production area is thought to have decreased as a result of higher costs, low commodity pricing and retail consolidation pushing some farmers out of business.
Climate conditions and competition have also taken their toll on production, with growers facing price pressure from discount retail chains, fast food chains and the domestic market where less than 10 per cent of income is spent on food. Urban pressure on orchard land is another cited factor.
Producers are struggling to receive a fair return on their crop, according to AAFC, and produce environmentally-responsible, safe, high quality food for domestic and export markets when returns are, in some cases, below costs of production.
However, the sector is responding to changing market demands with investment in new varieties and technology.
The provincial government of Nova Scotia awarded orchard renewal funding of CN$235,000 to growers in the region in April, following on from the renewal of a larger project in British Columbia.
In early 2005, its Provincial Orchard Replant Program was assigned an additional CN$4.65m to replace old trees with high-density, added-value varieties.
While not exclusively benefiting the apple industry, forecasts suggest the initiative in British Columbia will have totalled 10,625 acres of replanting by the end of the current year. Program organisers also say the replanted varieties now account for 50 per cent of market returns with the Gala variety a particular success for the region.
Farmers in Ontario and Quebec are among growers supporting development of a national revitalisation plan to replace out of date varieties.
And meeting new market requirements is one of the motivations behind the Canadian Horticultural Council’s Integrated Fruit Production (IFP) initiative. Developed to reflect international systems such as EurepGAP, the initiative was kick-started in 2002 through CN$151,500 of Canadian Adaptation and Rural Development funding.
IFP guidelines have been developed for the economical production of high quality fruit, giving priority to ecologically sound methods and minimising use of agricultural chemicals.
“This project is one component of a comprehensive, multi-year effort by the apple industry in all four producing regions (Maritimes, Quebec, Ontario and British Columbia) to collaborate on a national strategy to ensure the long-term viability of growing apples in Canada,” according to the Canadian Horticulture Council. “Canadian apple production is among the most advanced in the world.”
An Integrated Pest Management strategy has also been implemented by the sector in conjunction with the Pest Management Regulatory Agency, aiming to optimise the use of biological, cultural and chemical measures to control pest and disease pressures.
And responding to consumer demand for greater information on production, a Traceability Task Force was created in 2002 to produce a best practice road map for industry.
“A quality management program based on HACCP principles, the Canadian Partners in Quality program, is being developed as a voluntary alternative to traditional inspection methods for fresh fruit and vegetables,” said AAFC.
McIntosh remains by far the predominant Canadian-grown variety, accounting for 25 per cent of the total 2004 crop (Statistics Canada). Following are Red Delicious at 11 per cent; Empire, eight per cent; Gala, seven per cent; Spartan, six per cent; Cortland, five per cent; and Golden Delicious, four per cent.
Over the past five years, production increases have been noted in the varieties McIntosh, Gala, Spartan and Golden Delicious, while a number of niche varieties are also in ascent with Fuji accounting for two per cent; Ambrosia, 0.5 per cent; and Granny Smith, 0.4 per cent.
Last season, 2004-2005, saw total production falling five per cent year-on-year to 395,018t, a decrease of 19.4 per cent on the previous five-year average of 489,858t.
Statistics Canada also reports a 10.4 per cent decline in the farm gate value of Canadian apples to CN$137m for 2004-2005, down by 20.3 per cent on the previous five-year average of CN$172m.
By province, production fell by 2.4 per cent to 128,367t in British Columbia and by three per cent to 140,614t in Ontario, down 41.4 per cent on the previous five-year average.
In Quebec, production - at 87,090t - was 6.6 per cent below the five-year average, and in Nova Scotia, a 7.9 per cent year-on-year decrease resulted in production totalling 33,430t.
The only increase - from a low base - was noted in New Brunswick, which reported production rising 8.8 per cent to 5,035t in 2004-2005.
USDA’s GAIN report states: “Despite the reduced production potential this year, quality is reported to be good. In Ontario, hot dry conditions affected apple orchard yields, but colour and flavour are reported to be very good.”
AAFC estimates from early August forecast a 2005-2006 crop of 23m bushels with Ontario leading the way at 8.3m, followed by British Columbia, 6.8m; Quebec, 5.3m; Nova Scotia, 2.4m; and New Brunswick, 200,000 bushels.
Overall a fairly good crop is expected this year, said Makki, with some variation by province and overall production slightly down. The crop is well below the five-year average but still good and won’t exert a downward pressure on prices, he said.
According to Norfolk Fruit Growers’ Association (NFGA) general manager Tom O’Neill, the Ontario Empire crop is expected to be down one per cent year-on-year.
“I would estimate at this time (in late September) that the crop will pick up close to last year as there are more individual fruits still off one size,” he says. “The crop flowered well and had good pollination weather. The summer growing season was completely opposite to 2004 with hot dry conditions most of the summer. Rainfall, while significantly less than 2004, appears to have been enough to finish the crop.
“Crop condition is excellent at this time with maturity delayed about five days from what we would normally expect. Sugar and acid levels appear to be in a good balance this year and brix indication are excellent for fruit to meet UK specifications. Colour development on the fruit has been good and continues to develop as cool nights of fall take over.”
NFGA growers, which counts UK importers Empire World Trade and Worldwide Fruit among its customers, is expecting a good season in the UK.
“The size of fruit in Ontario continues to suit the UK market with fruit from 60mm to 75mm in plentiful supply. While increased freight costs and stronger Canadian dollar will increase costs, it is anticipated that the value of the Ontario Empire will continue to attract demand from the major supermarkets,” says O’Neill.
“The Ontario industry has continued to adopt new technology in storage regimes and the product SmartFresh is used extensively in the Empire variety where it has been proven to excel.
“Ontario will continue to support their sales with individual promotion efforts. Growers have completed the EurepGAP process and certification takes place annually. Packhouses are working to the BRC higher standard as well.”
McIntosh continues to be Ontario’s number one variety and its harvest is in full swing, with abundant supplies of UK size available.
“In new varieties, Ontario has a limited production of Honeycrisp and Ambrosia. Both varieties have been planted and volumes will continue to increase in the years ahead,” says O’Neill.
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