Midseason update: Apple growers face ‘critical inflection point’ as prices fall, costs rise

There’s no denying the American apple industry – with its $23 billion total economic footprint and 150,000-plus workers – is an agricultural powerhouse both domestically and on the world stage. After all, the U.S. remains the world’s second largest apple producer – behind only China – and the segment annually drives nearly $1 billion in export value.

But things currently aren’t so sunny on the orchard acre as the industry faces down what a recent USApple webinar described as a “critical inflection point” with average wholesale prices cratering 23% below industry-peak 2023-2024 levels and growers forced to weather diminutive profit margins while harvesting a crop that can’t completely cover rising input and labor costs.

“It’s just not sustainable when our number one cost of production keeps eating away at the grower price per box – it’s not a calculation we can pencil in,” said Chris Gerlach, vp of insights, USApple. Gerlach was referring to the devastating effect on grower balance sheets from climbing ag labor and input costs.

“The one-year return on income and capital [data] is down 10% this year, so you’re losing money to produce and sell a crop in these economic times,” he added.

Here’s a short synopsis of what Gerlach covered in the late-May webinar:

Production and acreage updates

• Apple production in New York, Virginia, Washington, Oregon and California is currently projected down for the 2025-2026 growing season with Virginia the largest drop at 30%. Overall, the U.S. looks to be about 4% below the peak 2023-2024 season output. On the other side of the coin, Pennsylvania and Michigan are two key apple producing states that show an uptick in production.
• Overall, the top 7 apple growing states have removed 4,000 acres of tree fruit production since 2022, with Washington itself pulling out 3,000 acres this year.
• Gerlach says the late-April freeze across the Mid-Atlantic and upper East Coast will have a significant negative impact on orchard outputs in Pennsylvania, Northern Virginia and throughout New York’s Hudson Valley. That trio bared the brunt of chilly overnight minimum temperatures that averaged 10-18 degrees F below historical averages during bloom/bud development.

Storage + movement analysis

• US Apple data for May 2026 shows Pennsylvania and New York storage holdings above last year and the 5-year average while Michigan, Oregon and Virginia are currently sitting on less of last year’s crop than the 5-year average.
• Season-to-date movement (August to April) levels are at 125 million bushels currently, and November 2025 was the highest single month for apple movement since USDA-AMS began tracking levels. Exports currently sit at 30 million bushels.

Pricing dynamics

• Premium variety ‘Honeycrisp’ wholesale pricing is down 24% YoY while growers continue to send more of the variety into storage (up 53% YoY), indicating a hold-and-sell-later strategy among growers with storage capacity.
• ‘Granny Smith’ prices are also currently down with storage levels up YoY while ‘Gala’ and ‘Red Delicious’ prices have risen.

Costs + break even metrics

• H-2A costs eat up anywhere from 60-70% of the average wholesale price per box paid to growers. Back in 2013 labor rates accounted for 40% of the price per box, Gerlach noted.
• All types of fertilizer costs more this season than last season, with nitrogen seeing the largest increase at 31% YoY. Phosphorus-based fertilizers are up 11% YoY.
• The cost of diesel fuel has skyrocketed, up 62% from last year. It costs a grower-packer-shipper $400 more this season to truck a shipment of apples from Yakima to Los Angeles and $1,000 more to send that same truck to the East Coast.

Looking ahead to 2027

With 2026 half over as we tick past the Memorial Day weekend and into June, Gerlach set the stage for what growers should expect in the next year.

The agency is already planning for more unpredictable weather events to have an impact on apple growers. Gerlach says his team is actively lobbying for more disaster relief for specialty crop growers which could include things like special dispensations, earlier crop insurance payments and other methods to help growers financially.

“It’s important growers make contracts with customers early in the season and lock-in pricing – right now everyone is in the thick of apple thinning – so it’s going to take a very long time to know what supply is going to look like and its critical to make sure we get paid for our fruit,” he said.

USApple has shared a full recording of the webinar session, “Inflection Points”, which you can check out here.