The biggest market concern for Eastern apple shippers going into the 2018-19 season may be related to export market opportunities.
That may seem counter-intuitive, since Eastern apple marketers export far fewer apples abroad than Washington state exporters.
However, retaliatory tariffs on U.S. apples from multiple countries related to U.S. tariffs on imported steel and aluminum could threaten to disrupt U.S. apple sales to Mexico, India and China, said Jim Allen, vice president of marketing for New York Apple Sales, Glenmont, N.Y.
“We are not a huge exporter but we certainly rely on Washington state (shippers) to export their 40 million boxes a year,” Allen said in mid-August. “Any disruption of that will disrupt all markets, so that’s a huge risk.”
There are Eastern apple marketers who export, but not in the same volume as Washington state.
Europe takes a fair amount of New York apples, said Tim Mansfield, sales and marketing director for Sun Orchard Fruit Co., Burt, N.Y.
“The United Kingdom is a big part of our export market and we’ve been doing it for quite a few years now,” he said.
The empire apple fits the British taste profile if it is grown right and stored well, he said.
But the status of Washington state apple exports is top of mind, many said.
“The real thing that concerns us is the tariffs,” said Henry Chiles, owner of Crown Orchard Fruit Co. in Covesville, Va.
“Nobody knows exactly what’s going to happen, but (retaliatory tariffs) are going to have some effect on export markets.”
Chiles said Crown Orchard Fruit exports to Central America and India. India had threatened to put in place a retaliatory tariff against U.S. apples in September, but has again postponed the tariffs until November.
While the 2018 U.S. apple crop is a size that is manageable under normal conditions, Brenda Briggs, vice president of sales and marketing for Rice Fruit Co., Gardners, Pa. said there is some wariness among marketers about the effect of the retaliatory tariffs on key export markets.
“(Retaliatory tariffs) could totally disrupt the markets that we’ve all worked so hard to build,” said Joel Crist, with Crist Bros. Orchards in Walden, N.Y.
“We are in trade disputes with three of our top six biggest trading partners.”
If Washington apples are not sold abroad, they will be sold domestic, he said.
“There’s only one way to push more apples into the domestic market, and that’s lower prices,” Crist said. “So that is like a storm cloud hanging over the industry right now.
The bigger trade problem than even tariffs this year might be with the U.S. dollar strengthening against other world currencies, said Desmond O’Rourke, economist and president of Belrose Inc., Pullman, Wash. “(The dollar) has been moving up for the last 18 months.”
With the “double whammy” of less purchasing power in importing markets combined with the retaliatory tariffs, export business is bound to suffer.
“I think that the people that might want to worry a little bit are the (growers) back East because any product (Washington exporters) are not able to move into the export market is probably going to the Midwest and East,” he said.
One U.S. dollar was equal to 69 Indian rupees in mid-August, compared with less than 64 rupees in early 2018.
That means a $25 carton of U.S. apples cost 1,600 rupees in January. That same $25 carton of apples in mid-August — not considering any tariffs — would cost 1,725 rupees, an increase of 8% compared with January.