Retail apple prices rise heading into harvest

08/21/2012 01:57:00 PM
Tom Karst

apple pricesAmid concerns about sustaining consumer demand through the fall, U.S. retail apple prices continue to rise.

The U.S. city average retail price for red delicious apples was $1.44 per pound in July, up from $1.38 per pound in June and up from $1.37 per pound in July 2011, according to the Commerce Department.

The escalation of retail apple prices will likely continue in August, with dwindling supplies of apples from storage and modest expectations of apple output in New York and Michigan contributing to a bullish outlook.

Shipping point prices for Washington Extra Fancy red delicious 72s were $22 per carton in early July, rising to $28 per carton by mid-August.

In August 2011, U.S. city average retail red delicious apple prices surged to $1.53 per pound before easing to $1.51 per pound in September and then dropping to a season low of $1.27 per pound by December.

Washington apple marketers are cautious about hiking prices too high, said Desmond O’Rourke, president of Belrose Inc., Pullman, Wash.

“The big concern is that, remembering the 2008 crop, is that the marketers don’t start prices too high,” O’Rourke said.

That year, shipping point prices near $30 per carton slowed consumer demand and eventually put downward pressure on f.o.b. and retail prices. In 2008, the average retail price for red delicious apples dropped from $1.58 per pound in August to $1.18 per pound in December. Likewise, f.o.b. prices sagged from $30 per carton for size 72s red delicious in September 2008 to $16 per carton by mid-January 2009.

“It took retailers six months to realize that they weren’t getting movement and then they dropped the price dramatically,” O’Rourke said.

For the 2012 season, apple marketers expect ample apple movement in the fall, as what fruit Michigan and New York have will be mostly sold by Christmas.

One wild card for the season is that Washington apple marketers are still uncertain about exactly how much hail-grade fruit they will offer this year, O’Rourke said.

While apple prices surged in July, the Consumer Price Index showed an overall decrease for fruits and vegetables. The Department of Commerce said the consumer price index for fruits and vegetables fell 0.3% in July percent after rising in each of the three previous months.

The Consumer Price Index shows that the index for all food rose 0.1% in July, and has risen 2.3% over the past year.



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