While the US stock market has been plunged into turmoil in recent weeks, the country’s apple industry is quietly confident that its stable of varieties can weather the economic downturn. Shippers across the pond have high hopes for the next few months, thanks to expectations for a high-quality crop.
The Washington apple harvest is approximately seven to 10 days later than normal.The Gala harvest is complete, Golden Delicious is very close to completion and, as FPJ went to press, sights were set on full swing harvest for Granny Smith, Red Delicious, Fuji, Braeburn and Cameo last week.
Washington Apple Commission (WAC) export operations director Todd Fryhover tells FPJ: “The next two to three weeks will be extremely busy for Washington’s 3,000-plus growers, as more than 50 per cent of the crop remains to be harvested and stored. The expectation is for an excellent quality crop of Washington apples.”
Washington crop volume has been estimated at 99.6 million bushel cartons for 2008-09.“With only the Gala harvest complete, most growers feel we should be very close to this overall Washington apple estimate,” says Fryhover.“The cool weather in September has provided Washington with exceptional colour, as well as the perfect growing conditions for sizing.”
Galas that were originally estimated to end up smaller in size this season have in fact increased in size, providing a more normal distribution for all markets, he adds.“Granny Smith, Golden Delicious and Fuji are also sizing up very nicely, with an expectation of meeting estimated crop volumes, if not exceeding estimates slightly.Red Delicious harvest is in full swing, with slightly smaller sizes predicted.
“However, as was seen with Gala, the cooler weather could make up the small sizes, providing a crop on estimate.This could be a vintage season for Red Delicious, with the cooler September temperatures providing excellent colour.”
Volumes of Gala continue to increase, says Fryhover, as new plantings come into full production. Honeycrisp will see the biggest increase in Washington production this season as a percentage, but the fruit will remain a minor player in the overall Washington apple varietal mix. “Red Delicious continues to decrease in volume as growers move into the newer consumer demand-driven varieties,” says Fryhover.
There are also several club varieties in the works for Washington, although the focus will remain on the ‘big nine’, says WAC - Red Delicious, Golden Delicious, Granny Smith, Gala, Braeburn, Fuji, Cameo, Cripps Pink and Honeycrisp.
In Washington, more than 3,000 apple growers are members of WAC, which aims to promote and market the region’s apples internationally on behalf of its membership.
George Smith, WAC Europe and Middle East representative, believes fruit sizing this season will be more suited to UK customer needs. “The trade has expressed excitement at the preferred fruit sizing being available this season after the challenges of the past two seasons,” he says.
Washington shipper Domex Superfresh Growers is hoping the estimates for a similar-sized crop to last year come to fruition. “We certainly would like to see several million more boxes, as demand has increased a great deal over the past few years,” says marketing and communication manager Loren Queen. “Sizing will be smaller than average this season by one to two sizes, depending on variety. In most cases, this means medium-sized apples - sizes 88 and 100 - will be our peak sizes. The quality is very good overall this year. The shape of the fruit, particularly Red Delicious, will likely be off this year, but the eating quality will be terrific across the board. The Granny Smith and Golden Delicious crops have a bit more blush than we normally see, but they look and taste great.”
Domex Superfresh has a very large crop of both Gala and Granny Smith apples this season, due to increased plantings over the last few years. “These varieties are always in high demand and store well for year-round availability,” says Queen. “Of course, the newer varieties like Honeycrisp and Cripps Pink are seeing large volume increases, primarily because of all the new orchards that are coming into maturity, as well as new plantings. Red Delicious has mostly settled into a holding pattern, but down significantly from 10 years ago. We have been pulling out older Red Delicious orchards and in some cases are replacing them with newer, better-eating strains of red.”
Washington may be the US’s primary apple exporter to the world, but New York and New England also export significant volumes to the UK market. The US Apple Export Council represents 11 apple-producing states -Virginia, Pennsylvania, New York, Michigan and California, plus all of the New England states - and around 40 per cent of the country’s total production and 10 per cent of exports.
New York is the second-largest apple-producing state in the US and, after Washington, the largest in terms of exports to the UK. Some New England states also market apples to the UK and Ireland. McIntosh and Empire - a Red Delicious and McIntosh cross - are the key varieties sent from these regions, and they fill an important niche in markets such as Ireland and Scotland.
Kristine Marceca, executive director of the US Apple Export Council, says it has been an “interesting season” so far. “The US economy is quite a distraction at the moment, but it looks like people are drowning their sorrows by eating apples - the domestic market is doing really well,” she tells FPJ.
Hail in Michigan and New York has affected crop volume, but the quality of the fruit is expected to hold its own. Jim Allen, president of the New York Apple Association, says that the season to date is progressing well. “We are right in the middle of the harvest. The crop is picking out heavier than we first estimated - we had hail in June which reduced sizes and damaged fruit, but we are seeing more fruit than we thought we would after that.
“Despite the hail the end quality of the fruit is high, with good sizes and colour and a balanced sugar/acid ratio.”
The McIntosh crop this season is “outstanding”, says Allen, due to excellent pollination and cool nights helping the flavour and condition of the fruit. Empire is also faring well, and most volumes of Empire will head to the UK, while Red Macs will be sent to Ireland and Scotland.
Newer varieties grown in New York state - Honeycrisp, Ambrosia and Cameo - are still limited to the domestic market, and varieties such as Gala and Jonagold, which have been around for some time but are still not as established as Empire or McIntosh, will be limited to the local market for the foreseeable future.
Kaari Stannard, owner of New York Apple Sales, sources fruit from 10 facilities in the state. “Mother Nature has not been especially nice to us this year, with recurring hailstorms from May,” she says. “But we do have good-quality Empires thanks to warm sunny days and cold nights. There has been a lot of negative press but I am optimistic - we have good fruit size, excellent quality and good brix levels and overall we are expecting a good season.
“But it will be a slightly later start for exports this year - last year there was a little more volume going to the UK in October and November.”
Donald F Green III of New York McIntosh grower Chazy Orchards says the quality of apples is much superior to last year, but volume is down.“We were lucky to have a beautiful growing season this year,” he says. “The key to McIntosh’s popularity is its unique flavour that is unlike any other apple - a blend of tart and sweet. Also, being bi-coloured, they differentiate themselves from all the single coloured apples.”
New York is primarily focused on shipping to the UK market in time for the post-January period, to avoid clashing too much with home-grown fruit. “There are some early volumes to the UK but the rush will come after Christmas,” says Marceca. “The UK is a world-class market - it always pays and meets its commitments. This season the exchange rate is not as good as it was last season and for us it will be a shorter season - plus the domestic market is really strong at the moment. But the UK market is important enough for our exporters that they will service it even in a small season - we are committed to the UK market and we want to understand it and invest in it.”
Allen agrees: “For more than two decades now we have exported Empire there and it is a critical market for us, because it keeps our supply in a manageable position. The UK likes medium-sized fruit, whereas the US likes larger fruit for displays. Empire is naturally a medium-sized fruit.”
Allen is confident that despite the economic downturn, New York apple shippers can hold their own in the UK. “Every market goes through difficult conditions but we have been in the UK for so many years. We have built a level of consumer acceptance for Empire, and we do not compete against UK product really because our lines are so different.”
Stannard believes the promotional campaigns organised by the US Apple Export Council in the UK are “very valuable” to the industry. “We are not in the market 12 months a year, so we have to remind consumers each season that Empire is back,” she says.
“What we send to the UK this season depends on so many market factors - the world is topsy-turvy right now and there are a lot of exchange rate issues. But it is important to stress that we want to be in the UK, we support it and we will be there this year,” she says.
The UK has always been an outstanding market for Washington apples, according to Smith. “Reds and pinks have a good following from both major retailers and the wholesale sector, while organic enjoys support across all retail platforms.
“The organic season and shipments have started at a good clip and we are waiting for new season reds and pinks to be harvested and shipped.”
WAC will be using a mix of promotional activities to market the fruit in the UK this year, including sampling, trolley posters, women’s press and on-pack offers at retail, among other initiatives. “In the markets we will be holding coffee mornings, merchandising visits and distributing point of sale for the independent trade,” says Smith.
From a grower’s perspective, supplying the UK market is difficult in terms of achieving the correct fruit size, skin condition and pressures, says Smith - whereas for packing stations and export managers, the major difficulty in shipping to the UK comes from the cost of transport and availability of containers and container space on vessels. “The uncompetitive nature of shipping lines with subsequent price hikes as a result is a challenge,” says Smith.
The UK is a very important market for Washington apples, agrees Fryhover. “But our increase in production costs, the escalation of ocean freight rates and the increasing awareness of carbon miles are just a few of the many issues affecting the UK market,” he says. “I wouldn’t say these are ‘difficulties’, but rather challenges facing the tree-fruit industry of which the UK is the leading example.”
Logistics is the single biggest challenge for growers, according to Queen. “With increasing worldwide demand for apples and ever-escalating transportation chain costs, we are always looking for solutions. We have a dedicated in-house logistics company that is analysing solutions such as inter-modal, freight forward distribution, in addition to the traditional transportation methods,” she says.
“The various certification programmes, especially for organics, that we deal with as a part of doing business in the UK, or anywhere else, are also some of our biggest hurdles.”
Growers are facing a number of tough challenges, agrees Allen. “The weather is always a problem and input costs have skyrocketed. There is also the issue of inadequate farm labour. We have antiquated immigration policies in the US and the government refuses to tackle the problem - the politicians would rather run for office.” Most temporary farm labour in the US is recruited from Mexico or offshore islands such as Haiti or Jamaica, says Allen.
But the biggest challenge in supplying the UK is that product is not in the marketplace for the entire season, he continues. “If it was an ideal world we would be there year round, but we are not. There is competition from European fruit and cheaper varieties, and Canada also supplies the UK with Empire.”
However, the New York industry fulfils an important niche in the UK market. “New York and the other states grow different varieties to Washington, and we are also close to the US population, which means we can take a more local approach in the domestic market,” says Marceca. “But it is in our interests to support WAC - we have to work together and start looking at ourselves as one massive supplying industry.”
US states club together to apply for government funding for promotion of US apples in export markets. “Our group matches this dollar for dollar and that helps us hire someone like Andrew Brown on the ground in the UK to organise promotions,” says Marceca.
“Agricultural exports are extremely important to the US, especially on the speciality crop side. Supporting exports generates money and jobs, so it is a good investment. Exporting can also attract new people into the industry, especially young people with dynamic thinking, etc.”
The New York industry also works with Canadian exporters to co-ordinate supplies, as the two industries share importers and a customer base in the UK. “We get funding from the US department of agriculture to promote our apples in the UK, so although we cannot share promotions with Canada, we can work with their growers to co-ordinate crop supplies and make sure we do not over-step each other,” says Allen.
There is indeed a sense of greater co-operation among the global top-fruit industry at the moment, and the US is at the forefront of this. The country’s industry bodies recently joined the World Apple & Pear Association (WAPA), which Marceca says has proved to be a really pertinent move. “At a recent meeting held in Chicago, we had the opportunity to talk to some representatives of foreign firms and key representatives from other apple-producing countries. Being in WAPA has really opened doors for us, and we have burgeoning relationships with a lot of producer organisations - they are interested in what’s going on in the US market, where people are energised around apples and there is a solid focus.
“People have realised the whole world is a market and we all service it together - we are fighting for the whole industry, against chocolate bars and crisps. We have seen that by working together and delivering a consistently high-quality product, consumers will choose to eat fruit again.”
Demand for New York’s apples has shot up in the last four to five years, says Allen, both in the US and worldwide. There is huge demand in Russia and a “hearty appetite” throughout the world. “Demand for sliced apples has also gone up and this is a huge market, so our growers need to plant more to meet this,” he says. “Empire has white flesh and red skin and is one of the preferred varieties for slicing because it does not crumble.”
Profitable growing seasons in recent years have enabled US producers to bump up investments into their orchards and facilities. “There is a lot of re-investment at the moment into the eastern industry,” says Marceca. “Some of these companies are seven or eight generations old, but they are not archaic - they are implementing new packing lines and coldstores and are growing better and better apples.
“We have looked at what we can focus on and what we do well - we can’t compete on all levels but we have a niche, and it is a very important niche.”
New York growers are constantly re-investing into their orchards and packing facilities, says Allen. “In the last two years we have had profitable growing seasons and we are re-investing a huge amount of that money into packing and storage. A lot of money is being poured into New York apple production - either the trees or the facilities.”
Re-investment into the orchards and facilities is crucial, agrees Stannard. “We have had some good years and now we are seeing the younger generation come back into the business.”
Chazy Orchards has a rigorous replanting schedule of 20 acres per year, leaving the ground fallow for three years from removal to replanting.“We also work very hard to keep our storage and packing line on the cutting edge of new technology,” says Green.
Washington growers are continually striving to produce the best apples at the least cost, says Fryhover - maximising production and quality while minimising costs. “Production techniques at grower level are evolving continually,” he explains.
Domex Superfresh is working on several new varieties of apples, some of which could come to market in the next year or two. “We have spent seven years and lots of money developing new varieties that appeal to consumers and fit a niche,” says Queen. “Most of the varieties we test don’t meet the demands of today’s consumer, so we find ourselves evaluating many new varieties that never see the light of day.”
So despite tricky weather conditions, a shortage of labour and global financial meltdown, the US apple industry seems relatively optimistic for the next few months.
“We’re a lot more optimistic in the apple industry than the stock market is at the moment,” says Allen. “But we are cautiously optimistic - people can turn in a hurry and in a tough economic climate they could change their minds about produce. Fresh fruit and vegetables usually do okay in a situation like this, but we are now in a high-priced market.”
The Washington industry takes a similar view. “Our growers are always optimistic - with farm cost inputs and investments equal to a Detroit car plant with no roof, they need to be,” says Smith. “We have a fine crop in the offing, equipment and investment enough to handle it and skills enough to market it - we are just praying for a fair wind in our sails.”
Fryhover adds: “Washington is very optimistic in our ability to meet and exceed the expectations of the UK consumer. The 2008 Washington apple crop is exceptional in quality and we hope recent economic events don’t limit our ability to provide ‘the Best Apples on Earth’ to the UK public.”
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