Analyst: Apple shippers must act now

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TOMATOES — F.O.B.S AS OF MAY 14

CENTRAL AND SOUTH FLORIDA DISTRICTS — Shipments (433-454-398) — Movement expected to increase. Trading moderate. Prices 5x6s higher, others lower. Extra services included. 25-pound cartons loose mature-greens 85% U.S. 1 or better 5x6s $8.95-9.95, 6x6s $7.95-8.95, 6x7s $7.95-8.95. Quality generally good.

MEXICO CROSSINGS THROUGH NOGALES, ARIZ. — Crossings (152-146-159, greenhouse 124-123-137, vine-ripes 28-23-22) — Movement expected to decrease seasonally. Supplies 4x4 to 4x5s light. Trading 4x4 to 4x5s fairly active, others slow. Prices 4x4 to 4x5s higher, others generally unchanged. Field-grown and greenhouse cartons/flats two-layer 4x4s mostly $9-10, 4x5s mostly $7.95-9, 5x5s mostly $4.99-5, 5x6s $4.64-5. Quality variable.

MEXICO CROSSINGS THROUGH OTAY MESA, CALIF. — Crossings (8-8-11, greenhouse 7-7-9, vine-ripes 1-1-2) — Movement expected to increase seasonally. Supplies in too few hands to establish a market. Quality generally good. The first f.o.b. report was expected to be issued the week of May 21.

WEST FLORIDA DISTRICT — Shipments (0-0-0) — Light harvest expected to start the week of May 28. Expect first f.o.b. by the first week of June.

U.S. SHIPPING POINTS — Greenhouse (54-56-**) — No prices reported. **unavailable

CANADA SHIPPING POINTS — Greenhouse (149*-150-**) — No prices reported. **unavailable, *revised

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Home > News > Analyst: Apple shippers must act now

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Analyst: Apple shippers must act now

08/24/2011 5:25:45 PM
Tom Karst

CHICAGO — If selling apples was a game of poker, Steve Lutz would advise grower-shippers not to overplay their hand.

High f.o.b.s at the end of the 2010-11 apple season may set back sales momentum for the start of the 2011-12 season, said Lutz, executive vice president of the West Dundee, Ill.-based Perishables Group.

Speaking at the U.S. Apple Association annual conference Aug. 18, Lutz said shippers need to aggressively seek retail promotions and shelf space for the just-starting 2011 crop. Providing consistent f.o.b. pricing that retailers can promote against in the fourth quarter of 2011 will be key.

Andy NelsonLutz “When you miss sales in October, November or December, you don’t make it up later,” he said.

Lutz sees the potential for a profitable year for Washington growers, as the low value of the dollar will support exports of apples. But there is historical precedent for concern.

In 2008, tight supplies at the beginning of the season caused U.S. average retail prices for red delicious to climb $1.58 per pound in September. The market then steadily fell to a low of $1.14 per pound the following May, dragging f.o.b. prices lower as well.

This year, red delicious prices at retail were climbing in the late summer, reaching $1.37 per pound in July, up from $1.29 per pound in July 2010. Likewise, premium quality red delicious apples were well over the $30 per carton level on Aug. 24, compared with about $20 per carton the same time last year.

Lutz said he sees the potential for the 2011 season to start out with high apple prices that are unattractive to promote for retailers. Retailers may then choose to promote other items like grapes instead of apples in September and October. That could cause the apple industry to play catch up the rest of the season, he said.

Washington apple marketers need to be competitive with regional apple suppliers, Lutz said.

“When regional suppliers can capture shelf space and can deliver a good product, they tend to stay,” he said. The late harvest start for Washington apples could present an opportunity for Michigan and New York growers to have a strong run in the fall, he said.