Millions Of Washington Apples Dumped
May 29, 2015 In Washington, apples are being dumped each day, truckload by truckload, to rot in the hot sun.
Here’s a link to a recent TV news story by King 5.
Part of the problem is the state has a gigantic crop to market.
Washington State Tree Fruit Association President Jon DeVaney blames the well-publicized West Coast port slowdown, which he says continues to have an effect even now that a new labor contract has been ratified.
“Washington growers and shippers typically export a third of the state’s apple crop, and the slowdowns curtailed our ability to access these customers for about four months – or one third of the year,” he says. “Moreover, this occurred during what are typically peak shipping months to these export markets and in a year when we had a record size apple crop.”
DeVaney also notes that while apples can be stored and come to market with high quality year-round, not all lots are equally well suited to long-term storage. As a result, they are seeing fruit that could have been successfully brought to market over the winter now being unsalable.
That the port slowdown occurred in a year with such a big crop is regrettable, he adds.
“Regarding the ‘too many apples’ argument, it is important to keep in mind that production decisions were designed to meet large and growing demand in Asia and Latin America — markets that could not easily be accessed this year because of the port situation,” DeVaney says. “Also, the apple market is segmented by variety, size and grade and the target customers and markets are different for each. Prices for many varieties, such as Honeycrisp and Cripps Pink, have remained strong while the varieties that have been experiencing the most difficulty are those that send a large share to these overseas customers.”
DeVaney adds that the effects of the slowdown will linger for some time
“While it is a relief to have the port labor dispute settled, our growers will still be feeling the impact in the months and years — in terms of regaining market share — to come,” he concludes.
Desmond O’Rourke, publisher of the World Apple Report, says the apples in the ports could not simply be sold in the U.S.
“From an economist’s perspective, demand for fresh apples in the U.S. domestic market tends to be fairly inelastic, that is small increases in quantities tend to have a relatively greater depressant effect on prices,” he writes in an email. “There is just so much volume that the domestic market will absorb of early, mid-season and late-season supplies. An over-supply situation can occur in one or more of these periods.”
Demand in other countries is more elastic, O’Rourke notes, partly because the number and size of foreign markets can expand more easily.
“Indeed, exports to Mexico, Canada, and India are up substantially this season. However, the port strike, China’s ban, Indonesian delays, the Russian embargo, etc., reduced some of the potential for export expansion elsewhere,” he says. “Since the export market is a moveable feast, it is always difficult to know when supplies would have been too great.”
And as far as the domestic market, buyers are extremely sophisticated, and they hold the cards.
“Over 45 years of studying the domestic U.S. apple market, I have observed that retail buyers have a great knack for using leverage against the varieties, sizes, or grades that are most plentiful. These apples either have to be sold at a loss, be diverted to processing, or be dumped,” he says. “Few growers plan to grow at a loss or for processing or dumping, so clearly this season, growers supplied more than the market could absorb. Also, since varieties of apples are often close substitutes, increased sales of Honeycrisp or other premium varieties will tend to replace sales of non-premium varieties that are less profitable for the retailer, which only makes the situation worse for the weaker varieties.”
O’Rourke says the larger question – How much is too much? — remains to be answered. But one thing is for sure, the industry has truly become fully global.
“Whether Washington State is growing too many apples, only time will tell,” he says. “A key issue for the industry will be what needs to be done to further expand the export market, with more apples from Poland, Italy, France, Chile, etc., trying to find new homes.”
Subscribe Today For
