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Will U.S. apple growers face a better year financially?

Last year, U.S. apple production showed record production levels with Washington's volume coming in at 136 million boxes. This year, growers are in a much different position as the crop is smaller in size. Originally, a rather large crop was expected for the 24/25 season, driven by indications throughout the growing season. However, as harvest progresses, there appear to be 'holes' in the crop and volumes are lower than expected. "Based on what we are seeing in our orchards and across the state my estimate for Washington is to come in between 115 and 120 million boxes after harvest has been completed," says Don Roper with Honeybear Brands. Right now, about 55 to 60 percent of harvest has been finished and there seems to be a clear re-set on supply out of Washington state this year. "The trees are a lot lighter following last year's heavy crop."

Large Gala apples in high demand
Both Honeycrisp and Gala are being harvested now. Last year, Honeycrisp volume was extremely high. This year, Roper expects Honeycrisp volume to be below the five-year average. Gala production volumes will also be lower as the fruit is trending towards smaller sizes. This can partly be attributed to summer heat, which slowed down the growth. In addition, it has been increasingly difficult to find labor. Some growers failed to secure labor during the growing season and orchards fruit didn't get adequately thinned. In general, Gala has always been a smaller apple variety. "It doesn't have the big gene code that some of the other varieties have," Roper said. Due to the lack in availability, large Gala apples are expected to sell for a strong premium all season long. Cosmic Crisp on the other hand is showing a significant production increase over last year, which is driven by young orchards continuing to come into production. "It will be important to get good movement on the domestic front as well as building strong export markets as the production increase will continue for the next several years," Roper said. Harvest of the Granny Smith and Fuji varieties just started.

Midwest and New York also down
Over in the Midwest, the crop is significantly shorter compared to the last two back-to-back high producing years. "In general, we expect the crop size to be down at least 15 percent from last year and early indications on packing point to some lower production yields compared to last year. All in all, Michigan's production volume is estimated to be between 18 and 20 million fresh boxes this season. New York's crop will also be down from last year but not significantly. Overall, the state saw a good growing season and is experiencing a good harvest with temperatures that are very conducive to bringing on good color and brix. The majority of the Honeycrisp variety has been harvested and Gala harvest is just finishing up. There are still many more varieties to be harvested this season.

Low returns
Last year's oversupply had a direct impact on FOBs, which filtered all the way back to the farm gate. "In many cases, farmers' returns on their ranches did not offset the investments they made last year," shared Roper. "It was a negative year for most varieties, impacting the financial strength of growers, as well as packing houses." With the low returns for growers, some have decided to take out their low performing orchards and no longer invest in them. All in all, it has been a really rough 18 months for apple growers, packers, and marketers.

Fall promotions
Last year's big supply allowed for lower retail prices throughout the season. While not all retailers lowered their apple prices at store level, some passed along the lower cost of goods to their consumers and drove apple sales that way. "This year, pricing will start moving up, resulting in higher retail pricing, especially as we turn into the new year," Roper commented. Growers and packers are motivated to get fruit moving in the fall, so they can use their bins twice in the field, utilize regular storage to the best of their ability and fill their Controlled Atmosphere rooms to prepare for later market demand. "This all provides a great fall promotion opportunity to pack and move fruit at great retail prices." Once all varieties have been harvested, it is time to assess and prepare for the remainder of the marketing year.

For more information:
Don Roper
Honeybear Brands
[email protected]
www.honeybearbrands.com