An old saying, often attributed to Japanese origins, mentions living in interesting times. The tree fruit sector, particularly apples, is experiencing such times. The re-election of Donald Trump has reignited discussions on tariffs and trade wars, potentially impacting the tree fruit industry. As of March 14, the discourse around tariffs remains largely speculative. Some tariffs have been imposed on Chinese goods, with announcements concerning Canadian and Mexican goods. However, tariffs on Canada and Mexico have been announced and postponed, causing market uncertainty for agricultural professionals planning their crops and managing businesses.
Michael Schadler, president of the Washington Apple Commission, indicates that growers currently face challenges beyond tariffs. "There has been a retaliatory tariff by China, an additional 10% on top of the retaliatory tariffs that have been in place since 2018," Schadler communicated in an email to the Basin Business Journal. "China is a market that has been difficult for us since the initial tariffs were put in place, so this new, additional tariff isn't that big of an impact."
Canada and Mexico remain crucial markets for U.S. apples. Chris Gerlach from USApple highlighted that Mexico accounted for about 36% of fresh apple exports in the 2023-24 season, with Canada purchasing another 15%. Schadler noted, "While there is uncertainty on all sides about how this will play out, and whether our apples might be subject to retaliation by Mexico or Canada; I haven't heard specifically that uncertainty is having an impact on actual volume shipped at the moment, before any retaliatory tariffs being initiated."
As of spring 2025, the primary issue is the oversupply of fruit impacting grower profitability. Schadler commented, "The bigger problem is the ongoing supply-demand imbalance, which is creating unprofitable prices for growers. Profitability, of course, is also impacted by high production costs, which have escalated in recent years."
Apple sales dynamics indicate that apples harvested in fall 2023 comprised about 41% of fresh apple sales from August to November 2024. The Washington State Tree Fruit Association reported the 2023 crop at approximately 136.1 million 40-pound boxes, while the 2024 harvest aligned closer to historic averages at about 124 million boxes. Jon Devaney, WSTFA president, noted that despite a crop closer to historic averages, returns were insufficient to counter rising production costs.
Schadler emphasized the complexity of achieving supply-demand equilibrium, stating, "All growers are aware that production is too high given the current market prices. Many have started to reduce acreage but there are also newer orchards just starting to come into full production." Diversification into new varieties poses challenges, as Schadler explained: "As far as moving into new varieties, that can also be a very difficult decision, especially for smaller growers, given the costs involved."
Source: Columbia Basin Herald