Apple industry seeks USDA bonus purchases

05/08/2009 02:12:00 PM
Tom Karst

As apple marketers try move the remainder of a massive crop - the U.S. had 30% more apples on hand May 1 compared to a year ago, and Washington State had its highest inventory ever - the industry is asking the U.S. Department of Agriculture to buy at least 1 million boxes of whole apples.

That's on top of the department's plans to spend more than $16 million on fresh-cut apples for schools.

More than 50 members of Congress - 17 senators and 44 representatives from 11 states - signed letters May 5 asking for the bonus purchase.

The letter from House members cite a bumper crop and reduced demand because of the economic downturn has created record apple inventories.

According to Yakima, Wash.-based Yakima Valley Growers-Shippers Association, the state of Washington had 32.6 million cartons in storage May 1, compared to 23.1 million on that date in 2008 and about 25 million for each of the two previous years.

USDA fresh produce commodity purchases totaled $16 million in 2008, accounting for 3.4% of the total. Canned produce purchases led the way at $258 million, or 54.6% of the total. Source: USDA

Diane Kurrle, director of public affairs for the U.S. Apple Association, Vienna, Va., said the intent is that the purchase would occur by June, well before the start of the 2009 harvest. The apples would be used for school lunch and other programs.

USDA Agricultural Marketing Service officials are receptive to the need, she said, but haven't indicated if they will act on the request.

Kurrle said U.S. apple inventories are 30% above the same time a year ago.

"The apple industry hasn't made any request like this since 2003, so it is something that is done pretty sparingly by the industry, and they have looked at our data and agreed it would be appropriate to make such a purpose," she said. "I think everyboy is operating under tighter budgets than usual, so we don't know what their decision will be."

Jimmie Turner, spokesman for the USDA Agricultural Marketing Service, said the supplement purchase request was under consideration but gave no other comment.

Apple status

U.S. apple grower-shippers were finding strong movement of fruit but substantially lower prices than a year ago, especially on smaller sizes.

Washington red delicious apples, size 88s, were $14-16 per carton on May 6, compared to $18-20 per carton last year, said Jeff Main, Federal State Market News reporter in Yakima. Meanwhile, he said Washington granny smith apples, size 125s, were at $9-10 per carton May 6, down from $18-20 per carton the same time last year.

Movement of fresh apples has been at record levels in recent weeks, averaging about 2.5 million cartons shipped per week over the past four to five weeks, said Kirk Mayer, manager of the Washington Growers Clearing House Association, Wenatchee.

Season-to-date apple prices in Washington averaged $17.80 per carton through late April, Mayer said. However, prices have been declining recently, with the average f.o.b. apple price for the week of April 27 at $14.27 per carton.

Depending on the size and variety of apple, he said growers typically need f.o.b. prices of $14-16 per carton to break even.

Projections show the 2008 110-million bushel Washington fresh apple drop should be finished sometime in October, Mayer said.



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