Why the U.S. Apple Industry Is at a Crossroads

The U.S. apple industry finds itself in a paradoxical position: Record or near-record production and strong export movement alongside stubbornly weak grower prices and mounting cost pressures, particularly for labor.

That was the assessment delivered by Chris Gerlach, Vice President of Insights and Analytics with the U.S. Apple Association, during the International Fruit Tree Association conference in Fresno, CA, earlier this year. His message: Volume and demand remain solid, but profitability is increasingly fragile.

Gerlach opened by outlining the association’s role in Washington, representing the apple supply chain — from growers and shippers to processors and nurseries — while advocating for policy that supports the industry’s long-term viability. Through events such as Capitol Hill Day, growers bring their stories directly to lawmakers. “We bring you guys in to tell your own stories, so they hear it directly from you,” he said, noting that constituent voices carry weight.

PRODUCTION PEAKS AND SHIFTING ACRES

While USDA still lists 2014 as the top production year on record, Gerlach’s adjusted data suggests the 2023–2024 crop may now hold that distinction. “If we do that, it makes it look like that 2023–2024 season was the top apple producing year ever,” he said, with 2024–2025 only slightly lower at 270.5 million bushels.

The geographic concentration of production continues to intensify. Over the past decade, U.S. bearing acreage increased by about 26,000 acres, with Washington state accounting for roughly 25,000 of those acres. In effect, nearly all net growth occurred in one state.

Other regions tell a different story. California, for example, has seen a dramatic contraction. According to Gerlach, the state has lost 52% of its acreage over the past two decades, with production down 54%.

Even where acreage has stabilized since 2022, production capacity continues to rise. High-density plantings and improved genetics mean more fruit per acre, so flat acreage does not equate to flat supply.

VARIETY SHIFTS AND STORAGE PRESSURE

The varietal mix continues its shift toward premium fresh apples. Honeycrisp has moved ahead of ‘Granny Smith’ in key metrics, while managed varieties such as ‘Cosmic Crisp’ are gaining ground. Traditional processing varieties are gradually declining as processors rely more heavily on fresh-market culls.

As of Jan. 1, ‘Honeycrisp’ led storage holdings at 20 million bushels, up 30% year-over-year. Gala followed at 19 million, with ‘Granny Smith’ and Cosmic close behind at 16 million each. Notably, more ‘Cosmic Crisp’ was in storage than ‘Red Delicious’, a symbolic marker of shifting consumer demand.

Movement has been strong, but Gerlach cautioned that supply dynamics are complicated by heavy carryover. Nearly 39% of apples sold during harvest last season were from the prior crop. “We’re competing with ourselves from prior seasons,” he said. That overlap adds pressure to pricing, even in high-movement months.

EXPORT GAINS IN A GLOBAL MARKET

Exports remain a bright spot. November marked a record movement month at 18.3 million bushels, the highest in the data set’s history. Nearly 29% of that volume went overseas.

The industry has regained ground in India and strengthened positions in Mexico, Canada, Taiwan, and Vietnam. “We’ve been doing really well over the past two seasons to reclaim some of those markets,” Gerlach said, noting exports to India are up roughly 30% in recent years.

A weaker U.S. dollar has improved competitiveness abroad, rather than widespread discounting or new market breakthroughs. Meanwhile, efforts continue to gain access to markets such as Japan, Australia, and South Korea, where non-tariff barriers remain in place.

On imports, late-summer fresh apple volumes have declined, though retailers still seek year-round supply continuity. In juice and concentrate, the U.S. remains a net importer, even as some domestic apples go unharvested, highlighting limited processing capacity at home.

PRICES DOWN, COSTS UP

Despite strong movement, grower returns remain under pressure. Retail prices fell sharply during the last large crop year and have not fully rebounded at the farm gate.

“Retail prices, as you know, are not grower prices,” Gerlach emphasized. Inflation-adjusted grower prices have declined 38% over the past several seasons.

At the same time, costs continue to rise. Labor, particularly under the Adverse Effect Wage Rate and H-2A program, remains the largest production expense for most growers. Regulatory changes to AEWR calculations, ongoing legal challenges, and Farm Bill negotiations all add uncertainty.

Early indicators from H-2A applications and insured acreage suggest some growers are already scaling back, reducing labor needs, or shortening contracts.

MANAGING AT THE BLOCK LEVEL

In an environment where growers have limited leverage over retail pricing, Gerlach’s advice was direct: Focus on what can be controlled. “When we can’t control our revenues very much … we really need to hunker down and manage our costs,” he said.

Research from Washington State University and Michigan State University is helping growers analyze profitability at the block level — by variety, density, and yield — to determine which acres are contributing to returns and which may be quietly eroding equity.

Production remains strong. Movement is healthy. Export momentum is encouraging. But profitability is thin, and survival will depend on disciplined cost management and sustained engagement in policy discussions.

“Block-level accounting management will be critical moving forward,” Gerlach concluded.

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5 Fast Facts About the U.S. Apple Market Right Now

Largest Crop on Record (Adjusted): Adjusted estimates suggest 2023–24 was the top U.S. apple production year ever, around 270 million to 290 million bushels.

Washington Dominates New Acres: Of 26,000 new bearing acres added over a decade, roughly 25,000 were in Washington State.

California’s Exit: California has removed 52% of its apple acreage over the past two decades, with production down 54%.

Record Monthly Movement: November movement hit 18.3 million bushels, the highest monthly figure in Gerlach’s data set.

Grower Prices Lag: Inflation adjusted grower prices are down about 38% from recent highs, even as costs, especially labor, have climbed.