Nov 3, 2009

October Was Apple Frenzy Month

Already by mid-October, people in the apple industry were talking about the apple stocks report that will come out in mid-November.

That’s a way of saying: We don’t know what growers are going to do with all those apples, but by then they’ll have decided – and the stocks report will tell us what the decisions were. The U.S. Apple Association does its first survey of apples in storages on Nov. 1 and keeps doing surveys monthly until summer.

In October, growers were racing to harvest a crop that looked gorgeous on the trees and was packing out just as nice as it looked – and long as well. In New York, Michigan and Pennsylvania, they were running out of bins and storage space. And still, growers were saying they’d be leaving fruit in the orchards.

Food banks were taking donations of free apples. In west Michigan, the Feeding America West Michigan Food Bank was running four to six mobile pantries – converted beer trucks – picking up apples from growers and delivering them to distribution centers to help feed needy people.

In many areas, cold fall weather was making picking less than fun many days and very low night temperatures in some areas were threatening to damage the apples themselves.

“It just won’t be cost-effective to harvest some of the apples,” said Don Armock of Riveridge Produce in Sparta, Mich.

“They’re running beautifully,” he said. “Quality is good, color is good. Some bins pack out 19 boxes out of a 20-bushel bin. We’ve been running 24 hours a day six days a week, trying to turn bins over and get them back to growers. There’s a serious bin crunch. But prices are lower than they’ve been in four or five years.”

The Michigan Apple Committee reported that the state packers shipped 990,000 cases in September, the most in any month since 1999. In one week in October, 372,000 boxes went to market. The state crop was expected to come in above the August estimate of 26 million bushels, but not all were expected to be harvested.

Armock said that non-Gala and non-Honeycrisp apples were moving at around $11 to $12 a box, and even Honeycrisp apples, which moved last year at $55 to $65 a box, were down $15 to $40 to $50.

Prices of apples for juice were about a nickel a pound and falling, while prices for sauce apples were about 7 cents a pound. When prices are that low, Armock said, there’s not a lot of incentive to invest more money in a crop that will cost $22-$23 a bin to harvest, $6-$7 to tie up the bin, $7-$8 to treat with MCP, more money to treat with calcium or DPA and then $24 more to store.

Phil Pitts at the sales desk of the Michigan Processing Apple Growers said his job was “not as much fun as it used to be.”

He expected that weak demand for processing apples would cause some growers to leave processing varieties in the orchard, but that some growers with bins and storage space will probably choose to speculate, moving apples into storage hoping for a return of processor demand.

Many processors still have inventory of apples they paid a good price for last year, and with the economy weak, restaurants just aren’t moving much apple pie. Movement of individually quick frozen apples slices was slow, Pitts said.

With packout for fresh market being high, however, there may be fewer processing apples coming from sort-outs from packing line – and that may bolter the processing apple market.

In Ohio, Bill Dodd at Ohio Apples Marketing Program said growers there had a good crop and there was “some juggling” going on to find bins and storages. Even loyal “buy local” fans couldn’t hold prices up as surrounding states like New York, Michigan and Pennsylvania were pouring apples in at prices that “are not good.”

“We can’t complain about movement,” he said. “Quality is excellent. Consumers are getting a good value and a good price of fruit. Maybe that will lead to repeat sales.”

Like many in the industry, he’s waiting for the storage report that will tell how many apples of what varieties are out there and who has them to sell.