Apple prices could be near bottom

Published 12:33 am Wednesday, January 11, 2017

WENATCHEE, Wash. — Washington’s apple crop, its second largest, shrunk ever so slightly in the past month, sales continue at a good pace and prices may be at or near a season bottom.

As of Jan. 1, the crop is 137.1 million, 40-pound boxes compared to 137.9 million on Dec. 1, an ordinary and negligible decline due to slightly fewer packouts than expected.

Season-to-date shipments as of Jan. 1 totaled 48.7 million boxes, according to the latest industry report, compared to 43.7 million the same time a year ago with a smaller crop and 51.9 million with the industry’s record crop two years ago.

The big percentage swing in movement is with Honeycrisp at almost 4.5 million shipped so far versus 3.8 million a year ago, said Desmond O’Rourke, a private consultant and retired Washington State University agriculture economics professor.

The all other category of mostly new, proprietary varieties were up about one third from 2.6 million to 3. 5 million, still small but rapid in growth because of good dollar returns, O’Rourke said.

USDA’s tracking of average asking prices of extra fancy grade medium size (80 to 88 per 40-pound box) in Wenatchee and Yakima remained unchanged Jan. 9 from Dec. 13. That could indicate a leveling or bottoming of prices.

However, there are 32 percent more Gala in storage nationwide as of Jan. 1 compared to a year earlier, 29 percent more Red Delicious, 21 percent more Honeycrisp and 18 percent more Cripps Pink, according to a U.S. Apple Association report. Total national holdings are at 103.2 million boxes, up 14 percent from a year ago and 11 percent from the five-year average.

All of that tends to create downward price pressure.

“Prices could go either way in the next few weeks. Demand is fairly strong and supply not too big, so I think the market is pretty balanced right now,” O’Rourke said.

Red Delicious has dropped to $15 per box and Gala at $20.52 at which both are losing growers money, he said.

“Prices will be depressed a bit but still are generating very substantial returns, particularly compared to two years ago,” O’Rourke said.

The eight main varieties are averaging a little over $19 per box and proprietary varieties at about $43, he said.

“That’s a huge gap and the incentive to plant more of newer varieties must be very strong,” he said.

The USDA Jan. 9 tracking of prices: Red Delicious, $16 to $18.90; Gala, $19 to $22.90; Golden Delicious, $21 to $24.90; Fuji, $25 to $28.90; Granny Smith, $19 to $23.90; and Honeycrisp, $55 to $62.90.

Efficient producers of Gala are probably breaking even, but about one third of growers make money under these conditions, a third break even and a third lose money, O’Rourke said.

Braeburn, Cameo and Jonagold are all struggling price-wise, he said.

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