CHICAGO - Touching hot-button issues from variety trends to labor, a new 34-page report from the U.S. Apple Association offers a deep data dive into all things apple.
The report was unveiled on Aug. 19 at the group’s 126th annual Outlook Conference by U.S. Apple director of industry analytics Chris Gerlach.
The U.S. Apple analysis of U.S. Department of Agriculture data indicates total U.S. apple production for the 2021-22 crop year will exceed 11.1 billion pounds or 265.4 million bushels, according to the report.
This represents a 2.7% increase compared to the 2020-21 crop year production of 258.6 million bushels and is 1.3% less than the five-year production average.
Gerlach said the U.S. Apple figures are more comprehensive than USDA data, which only looks at the top seven apple-producing states. “We’ve analyzed the production from states outside of the top seven and added that back to USDA’s figure,” Gerlach said in his presentation.
For the 2021-22 apple marketing season, Washington state is expected to account for 66.4% of total apple crop production and 70.4% of total apple crop value. Fresh-market apples will account for about 67.1% of the U.S. crop, the report said.
At the varietal level, the report said gala apples are expected to retain the top spot with almost 49.3 million bushels produced in 2021, accounting for around 19% of the U.S. apple market. Rounding out the top five are red delicious (35.7-million-bushel cartons), Honeycrisp (31 million cartons), fuji (29.1 million cartons) and granny smith (27.2 million cartons).
In general, Gerlach said the varieties on the rise in the last five years include fuji, Honeycrisp and Pink Lady/cripps pink, gala, granny smith and york apples.
Declining varieties include rome, golden delicious and red delicious, the report said.
Looking ahead, Gerlach said U.S. Apple projects that overall U.S. production will continue its gradual upward trend by increasing by 6.1% by 2025.
Issues and outlook
One big concern for growers is declining domestic labor availability, Gerlach said.
“We are losing domestic workers faster than we can replace them and so, increasingly, growers have had to turn to seasonal migrant labor, or H-2A workers, to meet their needs,” he said, noting overall 257% growth in the H-2A program between 2011 and 2020. Growers remain vulnerable to federally mandated increases in the minimum wages for the program, Gerlach said, noting that Pacific Northwest wages for the H-2A program have increased by an average of 5% annually for the last decade.
Grower prices for apples haven’t kept pace with rising labor costs.
From 2016 to 2020, the U.S. grower price of apples drop from 31 cents per pound to 30 cents per pound, Gerlach said.
A bright spot for the industry is the overwhelmingly positive trade picture for the U.S. apples, the report said.
In the 2020-21 crop year. the U.S. exported almost 41 million bushels of fresh apples while only importing around 5.2 million bushels. These net exports (35.6 million bushels) are valued at almost $773.8 million, according to the report.
“On a year-over-year basis, while the balance of trade has declined with respect to quantity, it has increased in value,” Gerlach said. “This is primarily being caused by a rapid decline in the value of imports from the 2019-20 crop year but is also due to some resilience in export values which have not decreased as much relative to export quantities.”
Changing market needs
Despite the disruptions from COVID-19, demand for apples has not suffered, Gerlach said, noting that sagging foodservice sales did not have any significant effect on the fruit.
The popularity of bagged apples has increased during the pandemic, he said, as shoppers tried to minimizing trips and handling of fruit.
E-commerce sales of food also have increased. By the first quarter of 2021, Gerlach said e-commerce had grown to account for 3.5% of food and beverage store sales at $6.9 billion, up 377% from $1.5 billion in first quarter of 2018.
“While it seems clear that online grocery shopping is here to stay, it is less clear what that means for the apple industry in the long term,” Gerlach said in the report. “ Some have speculated that it will shrink store sizes and display space causing supermarkets to limit the varieties in the store. On the other hand, the endless aisles of the online grocery could accommodate any number of varieties exposing adventurous consumers to apples never before offered in store.”
