Markets on domestic apples are strong and getting even stronger.
“Supplies of apples are dwindling rapidly. We’re starting to see some further shrink as we get deeper and deeper into the crop,” says Dan Davis with Starr Ranch Growers based in Wenatchee, WA. He adds that the pack outs are also trending down as it sees more delayed sunburn in the bin on early harvesting varieties such as Galas and Honeycrisp. “We’re confident in the product we’re putting out. We’re just unfortunately putting out less of it per bin than we typically would had we not had to battle the heat last year,” he adds.
At the same time demand is brisk for apples. “Demand feels great. It’s just a matter of logistically can we fill the demand right now with the shipping situation, the lack of trucks and weather in various regions that have put us up against the wall in servicing the demand that we have,” Davis says. “We’re doing some intermodal transport but unfortunately the Northwest isn’t as well equipped to move that way as we used to be. We’re taking advantage of it a little bit but not nearly enough.”
Costs up, too
As for those strengthening markets, Davis estimates that pricing is up currently 10-20 percent, depending on the variety, over last year. “They’re gradually ticking upwards which our growers need so it’s tracking in the right direction. But at this point, our costs are easily up 20 percent as well though. So from an inflationary perspective, we’re probably trending flat. However we’re at the point where we’re hoping to get ahead of it a little bit,” he says.
In the meantime, this could mean more shelf space opportunities for some varieties. “One we’re looking at is Cosmic Crisp to fill some holes. Since Cosmic holds very well and if the stars align with the shortness on other varieties, it could take a foothold as we get deeper into the season,” he says. “Consumer response will depend on how price competitive we can be. With a new variety like Cosmic, it has to be priced appropriately to encourage trial. People aren’t going to, at a high price, pick up a variety that they haven’t tried before.”
And, later this year, of course a heavy reliance on imports, particularly organic imports, is on deck. Apple imports from regions such as Chile, Argentina and New Zealand could start at the earliest in April, though Davis believes the transition date for most varieties will be in either May or June. “And it’s going to be of utmost importance that we have transparent dialogues with our retailers about those transition dates factoring in the shortness of our crop and the difficulty in the global shipping situation,” he says. “I don’t think we can have them here earlier. It’s just a matter of metering our crop to when we can have them here.”
