Feb 28, 2014
MACMA does more than negotiate processing prices

Michigan Processing Apple Growers, also known as the Apple Division of the Michigan Agricultural Cooperative Marketing Association (MACMA), has been helping the state’s apple industry for more than five decades. Its role has expanded in that time, from negotiating minimum processing prices to educating growers, lobbying lawmakers, communicating with federal agencies and more.

MACMA’s Apple Division was first organized in 1961. From the beginning, the division negotiated minimum processing apple prices on behalf of its grower-members. Under Public Act 344, Michigan’s farm bargaining law, the division must represent more than 50 percent of the state’s apple growers, as well as apple tonnage, to be able to bargain with processors. Currently, the division represents about 62 percent of the state’s growers and tonnage (this includes more than 600 growers), according to Dawn Drake, manager of the Apple Division.

Drake and Phil Pitts, who runs the sales desk, manage the division’s day-to-day activities but are overseen by a committee made up of 32 grower-members, Drake said.

Drake said MACMA, an affiliate of Michigan Farm Bureau, is the only entity that looks out for Michigan’s processing apple growers, who still need representation when bargaining with processors.

“The whole apple industry benefits from what we do,” she said.

Still a processing state

There are 12 apple processors in Michigan (that produce apple juice, applesauce, frozen and sliced apples, among other products), and MACMA negotiates prices with nine of them, Drake said.

Membership in the Apple Division is voluntary. A lot of non-member apple growers support MACMA’s efforts but don’t want to pay the organization’s 2 percent marketing fee (processors deduct the fee from growers’ gross sales), she said.

“It’s easy to stand under the umbrella when somebody else is holding it,” Drake said.

Because growers have been planting more fresh-market varieties on higher-density acreage lately, some people assume that Michigan is increasing its fresh-market apple sales. But two-thirds of the state’s apples still go to processing markets – a percentage that has held steady over the years. Michigan’s humid climate and pressure from pests and diseases often affect apple quality, and much of the fresh crop still ends up going to the processing market, Drake said.

The processing market has been a challenge for the state’s huge 2013 apple crop, however. The extremely small crop of 2012 led processors to search for apples from the West Coast at much higher prices, and Michigan processers are having a hard time bringing business back to the state, leading to a larger supply of raw fruit than normal. The state’s fresh packinghouses have been doing a great job in moving a lot of product, however, she said.

Mark Umlor, a grower/packer based in Conklin, Mich., has been chairman of the Apple Division’s grower committee for four years (members serve one-year terms). He said trying to negotiate with processors as an individual would be a bad idea. That’s why he and other growers work together via MACMA to get the best prices possible for their processing apples. He said the relationship is profitable for both growers and processors.

Other efforts

MACMA’s Apple Division is involved in just about every aspect of the state’s apple industry, beyond negotiating prices. As an affiliate of Michigan Farm Bureau, the division communicates industry needs to legislators and federal agencies, covering topics like food safety, labor, crop insurance, funding for research and government apple purchases.

For example, USDA announced in January that it would purchase up to $20 million of processed apples for food banks and other feeding programs. That “bonus buy,” in addition to regular purchases made by USDA, will help take some of the glut off the national apple market, which otherwise might have depressed prices, said Fred Koenigshof, a grower from Coloma, Mich., and a member of the committee that runs the Apple Division.

Drake worked hard to make that purchase happen, Umlor said.

MACMA is working with other commodity groups to fix inadequate insurance coverage for apples. With help from U.S. Sen. Debbie Stabenow, these groups have fixed some of the problems (making coverage more reflective of actual apple production, for example), but more changes need to be made. At least the Michigan industry now has a better working relationship with USDA’s Risk Management Agency, which manages crop insurance programs. Trying to work with that agency in the past had been a challenge, Drake said.

MACMA has helped improve relations with other federal agencies, such as EPA. EPA officials have toured Michigan farms in recent years and have seen that growers use pesticides responsibly. Communication and good relations have helped keep some materials from being eliminated from use, Koenigshof said.

These days, the Apple Division is working closely with other state tree fruit groups – the Michigan State Horticultural Society (MSHS), Michigan Apple Committee and Michigan Cherry Committee – which hasn’t always been the case. The proposed Michigan Tree Fruit Commission is an “excellent example” of the four organizations working together for the betterment of the industry, Drake said. The commission – still in the planning stages – would be an industry-funded solution to Michigan State University’s continued loss of funding from federal and state sources. That loss of funding – a 50 percent cut in the last decade – has hampered the university’s fruit-related research activities.

The Apple Division will continue to negotiate processing prices, but Drake also sees labor, food safety and regulatory issues as top priorities, now and into the future. Labor is the most pressing issue. About 20 percent of Michigan’s apple crop didn’t get harvested in 2013 because of a labor shortage, and there are already worries about 2014. MACMA supports immigration reform that includes a workable guest-worker program, she said.

Koenigshof, a former president of MSHS, has been on the Apple Division’s member committee for about a decade. He appreciates MACMA’s efforts to educate growers. A few years ago, MACMA helped organize seminars around the state to familiarize growers with Good Agricultural Practices. And MACMA is doing more lobbying in Washington, D.C., than it has in the past. Its efforts give members a greater voice on issues like immigration reform, health care, food safety and the farm bill.

Koenigshof encourages more Michigan growers to join MACMA’s Apple Division.

“MACMA is playing a very important role, and will play a more important role in the future,” he said.

Matt Milkovich

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