Apple prices expected to spike on short supply and high demand
Apple prices expected to spike on short supply and high demand
Apple demand in the United States is higher than it has been in decades, and prices are expected to be higher than ever due to short supplies.
Several factors contributed to the state of this year's apple market. The 2007- 08 apple crop ran short, limiting its usual year-round supplies. Then, just as producers were weeks away from initial harvests for the coming year's crop, multiple hailstorms pummeled the Northeast, and extensive damage in some areas reduced projected volumes. Also, import supplies are down because of the weakened dollar.
Most industry professionals agree that it is going to be a very unusual apple year.
"It is setting itself up to be an unprecedented year," said Brenda Briggs, vice president of marketing for Rice Fruit Co. in Gardners, PA. "The crop now coming on in Pennsylvania is expected to be about what the [U.S. Department of Agriculture] initially projected, but there are very few apples available now, either imported or domestic, and wholesale prices are historically high."
Rice Fruit finished packing last year's apples in late June and early July. It typically packs the previous season's fruit right up to when it begins packing the new crop.
Ms. Briggs said that the lack of carryover supplies, shortages in the coming season due to bad weather and reduced import projections because of the weakened dollar are all contributing to the unique situation.
"There is uncertainty in the market because demand is high and no one really knows what will happen once apples are harvested and in supply again," said Ms. Briggs. "This causes uncertainty in the market. Speaking for all apple producers in the state and for Rice Fruit, we will be relieved to get the current crop off the trees and into storage."
Fred Hess, co-owner of Hess Bros. Fruit in Lancaster, PA, said that while quality is exceptional this year, he also predicts supplies will run short next spring.
"Our stored supplies of good fruit will last well into next spring," said Mr. Hess. "But come late spring and summer, we'll be scouring for fruit. We don't see this crop as lasting throughout the entire year. The apple industry is enjoying a strong upswing in business the past couple of years due to the much publicized heath and nutritional benefits."
Matthew D'Arrigo, vice president of D'Arrigo Bros. Co. of New York Inc., said that there is an aura of urgent anticipation awaiting this year's domestic crop.
"It has a different feel than any other apple crop I can remember," said Mr. D'Arrigo. "And it is being caused by several factors now affecting the commodity. Imported apple volumes in the U.S. are lower than they've been in the last several years. With the dollar value low, exporters in foreign countries are opting to ship their crops to countries with a better exchange rate. In the past few months, this action resulted in a cleanup of stored apples available in the U.S. We had less supplies during this period than we've had in 20 years."
Mr. D'Arrigo said that the United States literally ran out of apples. The shortage caused a high price spike of easily 50 percent over the same time last year, which leads to an industry anticipation of the upcoming domestic crop.
"But other factors have contributed to this especially peculiar apple status," said Mr. D'Arrigo. "Hailstorm damage in New York in June, and then hailstorms in Pennsylvania and New Jersey in early to mid-August, are indications that domestic crop supplies are going to be short. No one can say exactly what this combination of factors will do to the market, but when they are all combined, then added to by the anticipation, it will create a very interesting situation."
Mr. D'Arrigo added that once people realize that there are supplies, prices would begin to moderate and take on a relatively normal feel. He predicted that the situation would prevail in the next couple of months.
"The challenge that grower-packers face is in making sure they squeeze every possible quality apple out of the crop that qualifies for the fresh market," said Peter A. Gregg, communications director for the New York Apple Association in Fishers, NY. "And that is dependent upon harvesting skills and packinghouse technology, which is fortunately the highest technical level available today."
High-priced apples do not necessarily mean high profits. Mr. Gregg pointed out that the current high fuel prices have driven up costs across the board for producers, and to many, higher prices can translate into no or minimal losses at the end of the season.
"It will be an interesting year," said Karin Rodriguez, executive director of the Pennsylvania Apple Marketing Board in Harrisburg, PA. "Storage crops are depleted, and some states are reporting decreased crop volumes due to storm damage, so we expect prices to be higher this year. How high is impossible to say until the season plays out. The mix of what is going on in the apple industry will make it a strong overall marketing season."
Several factors contributed to the state of this year's apple market. The 2007- 08 apple crop ran short, limiting its usual year-round supplies. Then, just as producers were weeks away from initial harvests for the coming year's crop, multiple hailstorms pummeled the Northeast, and extensive damage in some areas reduced projected volumes. Also, import supplies are down because of the weakened dollar.
Most industry professionals agree that it is going to be a very unusual apple year.
"It is setting itself up to be an unprecedented year," said Brenda Briggs, vice president of marketing for Rice Fruit Co. in Gardners, PA. "The crop now coming on in Pennsylvania is expected to be about what the [U.S. Department of Agriculture] initially projected, but there are very few apples available now, either imported or domestic, and wholesale prices are historically high."
Rice Fruit finished packing last year's apples in late June and early July. It typically packs the previous season's fruit right up to when it begins packing the new crop.
Ms. Briggs said that the lack of carryover supplies, shortages in the coming season due to bad weather and reduced import projections because of the weakened dollar are all contributing to the unique situation.
"There is uncertainty in the market because demand is high and no one really knows what will happen once apples are harvested and in supply again," said Ms. Briggs. "This causes uncertainty in the market. Speaking for all apple producers in the state and for Rice Fruit, we will be relieved to get the current crop off the trees and into storage."
Fred Hess, co-owner of Hess Bros. Fruit in Lancaster, PA, said that while quality is exceptional this year, he also predicts supplies will run short next spring.
"Our stored supplies of good fruit will last well into next spring," said Mr. Hess. "But come late spring and summer, we'll be scouring for fruit. We don't see this crop as lasting throughout the entire year. The apple industry is enjoying a strong upswing in business the past couple of years due to the much publicized heath and nutritional benefits."
Matthew D'Arrigo, vice president of D'Arrigo Bros. Co. of New York Inc., said that there is an aura of urgent anticipation awaiting this year's domestic crop.
"It has a different feel than any other apple crop I can remember," said Mr. D'Arrigo. "And it is being caused by several factors now affecting the commodity. Imported apple volumes in the U.S. are lower than they've been in the last several years. With the dollar value low, exporters in foreign countries are opting to ship their crops to countries with a better exchange rate. In the past few months, this action resulted in a cleanup of stored apples available in the U.S. We had less supplies during this period than we've had in 20 years."
Mr. D'Arrigo said that the United States literally ran out of apples. The shortage caused a high price spike of easily 50 percent over the same time last year, which leads to an industry anticipation of the upcoming domestic crop.
"But other factors have contributed to this especially peculiar apple status," said Mr. D'Arrigo. "Hailstorm damage in New York in June, and then hailstorms in Pennsylvania and New Jersey in early to mid-August, are indications that domestic crop supplies are going to be short. No one can say exactly what this combination of factors will do to the market, but when they are all combined, then added to by the anticipation, it will create a very interesting situation."
Mr. D'Arrigo added that once people realize that there are supplies, prices would begin to moderate and take on a relatively normal feel. He predicted that the situation would prevail in the next couple of months.
"The challenge that grower-packers face is in making sure they squeeze every possible quality apple out of the crop that qualifies for the fresh market," said Peter A. Gregg, communications director for the New York Apple Association in Fishers, NY. "And that is dependent upon harvesting skills and packinghouse technology, which is fortunately the highest technical level available today."
High-priced apples do not necessarily mean high profits. Mr. Gregg pointed out that the current high fuel prices have driven up costs across the board for producers, and to many, higher prices can translate into no or minimal losses at the end of the season.
"It will be an interesting year," said Karin Rodriguez, executive director of the Pennsylvania Apple Marketing Board in Harrisburg, PA. "Storage crops are depleted, and some states are reporting decreased crop volumes due to storm damage, so we expect prices to be higher this year. How high is impossible to say until the season plays out. The mix of what is going on in the apple industry will make it a strong overall marketing season."
