CHICAGO — “It’s a pretty dynamic time in the industry right now,” says Chris Gerlach, vice president of insights and analytics, before the start of his industry outlook and global crop report during the U.S. Apple Outlook conference.
While Gerlach gave attendees a preview of the USDA’s domestic crop forecast, he also provided a snapshot of the current export market, which he says shows some true opportunities for growers.
Mexico is the U.S.’s top export market for apples, worth about $400 million a year; Canada is second at $150 million a year, followed by Taiwan ($94 million), Vietnam ($74 million) and India ($40 million). The U.S. also sends apples to about 59 other countries, worth about $320 million.
Gerlach points out that India’s presence on the list is a bright spot.
“We’re trying to win back that market share, “he says. “It’s an important market for us.”
Gerlach also says apples avoided being part of a potential retaliatory tariff that Canada proposed in February.
“The tariff foreign policy levers are being used much more widely than just unfair trade practices,” he says. “It’s being used in all manner of things, so anything can kick off a trade war anywhere at any time.”
Many countries that import U.S. apples have expressed a willingness to work with the administration on trade deals, Gerlach says. These include Taiwan, Vietnam, India, Thailand, Israel and Indonesia.
“I think there’s a real opportunity to expand into or expand what we are sending them,” he says.
Other countries that the U.S. does not currently export to such as Japan, South Korea, Australia and the United Kingdom, could be additional sources of apple exports.
“There have been announcements of deals with Japan, South Korea, U.K. Those details are vague, but I think still opportunities that we could get some of those nontariff trade barriers removed and increase our exports to those countries,” he says.
Global Apple Production
China, which grows about 2 billion bushels — or about 10 times U.S. production — looks to be down about 5% this year, Gerlach says. China exports apples to Vietnam, Indonesia and Thailand. With China being down, he says there could be an opportunity for the U.S. to make some inroads in those countries.
“Those are all countries that have come to the negotiating table, and they’re all in our top five export markets, or at least Thailand is top 10,” Gerlach says. “Being down 5% to some of their some of their export markets that we also trade with might be some opportunity there.”
Turkey, which produces about 142 million bushels, looks to be down by 38% this year. While Turkey exports apples to Iraq, Russia, Libya and Syria, the country also exports apples to India, which could be a great opportunity for the U.S. to make more gains.
“If Turkey normally produces the same amount of apples as the U.S. and is down close to 40%, there might be some real opportunities to scale up exports and take back some of that market that we lost when we got outpriced of that market for about a five-year time period,” he says.
In Europe, Gerlach says overall production looks to be flat. Poland looks to be up 3%, Italy down about 3%, France up 4%, Germany up 15% and Spain down about 8%.
In South America, Chile expects to be up about 1%, Argentina up 6%, Brazil up 15%, and in North America, Canada looks to be up about 3% and Mexico is projected to remain flat.
“Uncertainty around tariffs will continue to be a challenge,” Gerlach says. “Expanding existing markets and opening new markets may provide significant opportunities.”
