Aug 25, 2008Industry: USDA High in its Apple Crop Estimate
More than 250 growers and marketers gathered in Chicago Aug. 21 and 22 to assess the size and condition of the country’s apple crop and to evaluate the economic conditions that would impact its sale.
The first conclusion was that USDA’s National Agricultural Statistics Service had found more apples in its Aug. 1 survey than the industry believes is out there. Secondly, even if 218.2 million bushels can be found on the trees, many of them are so damaged they won’t be harvested even for juice.
The U.S. Apple Association (USApple) pegged the crop size at 207.2 million bushels, 5 percent smaller than last year’s crop of 217 million bushels and 11 million less than the USDA estimate.
USApple holds its Apple Crop Outlook and Marketing Conference every year, about a week after USDA releases its Aug. 1 survey data. Attendees break into regional groups, evaluate the numbers and make their own forecast.
Two states, Washington and New York, accounted for almost all of the difference between the two sets of numbers.
The biggest disparity between USDA numbers and industry numbers came in Washington, the state with the largest production. USDA forecast a crop of 128.6 million bushels; USApple said 122.1 million. The state was hit by cold weather and freezes this spring.
The second largest disparity was in the second largest production state, New York. USDA found 27.4 million bushels; the industry said 23.5 million. Extensive hail damage in July cut the New York crop to pieces, hitting hardest in Wayne County, the second largest apple-producing county in the United States.
Michigan, the state with the third largest production, had already come to terms with its short crop. In June, the industry was looking at 18 million bushels, but freezes followed by a heavy June drop kept the estimate falling and hail damage in July took a further toll. USDA found 12.9 million bushels on Aug. 1; the industry is in fairly close agreement, saying 12.5 million bushels, 35 percent fewer than the 5-year production average.
George Lamont, an apple grower and industry leader from Waterport, N.Y., characterized the overall industry as being divided into four belts.
The “hard water” belt across the entire Great Lakes region from Michigan to eastern New York and Massachusetts and south into Pennsylvania has had extensive hail damage.
The “soft water” belt across the midsection of the eastern United States had good rainfall and a good crop after a freeze-out in 2007.
The “no water” belt is smaller this year, but drought remains severe in the apple producing area around Hendersonville, N.C.
In the Northwest, cold temperatures this spring hurt the crop, but it is still larger than it was last year.
If USDA numbers are realized, the U.S. apple crop for 2008 will rank 18th in size. The largest crop ever was harvested in 1998 – 277 million bushels – and the smallest in 2002 – 203 million bushels.
The size of the crop should make marketing no problem. And the price of apples was good last year. Growers received 28 cents a pound for all apples, Lamont said, well up from the 12 cents they received in 1998. Fresh apple prices averaged 37 cents a pound, more than double the 17 cents of a decade earlier.
Processing apple prices, after falling from a high of $166 a ton in 1996 to $126 a ton in 2006, recovered somewhat last year and may reach $185 this year, Lamont said.
The dark cloud on the horizon is the economy, according to several speakers. Steve Lutz, from the Perishables Group in Chicago, said that consumers are changing their buying habits. Their budgets are under pressure from rising prices of gasoline and heating fuel and the general price increase high energy prices have brought.
Desmond O’Rourke, president of Belrose Inc., Pullman, Wash., said the lowest-income Americans have been hit the hardest, with their discretionary income sliced by the rising costs. But rich and poor have shared in the massive $5.2 trillion loss in wealth in the collapse in home values and decline in value of equity stocks.
Apple marketers need to be aware that these changes will affect