The Fruit Growers News - October 2000


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Apple Prices Still have not Bounced Back
By Lee Dean Managing Editor
When the apple industry sued China for dumping of apple juice concentrate and won, many apple processors thought that happy days would be here again soon for everyone. As the 2000 processing season begins, it’s clear those happy days are not here yet. “At the moment at least, apple growers in Appalachia and New York State are rather demoralized,” said John Rice of Rice Fruit Company in Gardners, Pa. Prices in Michigan are up from their low point during the flood tide of Chinese concentrate, according to Tom Butler, manager of the Michigan processing apple growers division of MACMA (Michigan Agricultural Cooperative Marketing Association). But the increase doesn’t yet make the situation a satisfactory one. “Foreign concentrate is at least a dollar a gallon more expensive than it was two years ago at this time,” said Butler. “But it is still clearly below our growers’ and processors’ cost of production. I get reminded of that every day.” The unimpressive grower numbers were reflected nationwide in a conference call held in early September with growers and processors from across the country. In Michigan, processing prices for growers in the Ridge area northwest of Grand Rapids are seeing slightly better processing prices than last year with excellent processor activity so far. Minimum prices for the following varieties are: • Northern Spy and Jonathan, 2 1/2 inches and up, $10 a cwt. • Golden Delicious and Idared, 2 1/2 inches and up, $8.75 a cwt. • Hard varieties, including Empire, 2 1/2 inches and up, $8.25 a cwt. • Soft varieties, 2 1/2 inches and up, $6.75 a cwt. • Straight loads of juice apples are $4.75 a cwt. • Fruit under 2 1/2 inches in peeler loads is $4.50 a cwt. In Michigan, MACMA is the legally-recognized entity that bargains with processors on behalf of its approximately 750 members. MACMA and the processors sit down and negotiate minimum prices. As of early September, five Michigan peeler companies – Peterson Farms, Morrison’s, Mason County Fruit Packers, Northern Michigan Fruit and Gerber Products – had agreed on a minimum price for peelers. Five juice companies – Aseltine Cider, Mason County Fruit Packers, Indian Summer, Peterson Farms and Gerber Products also agreed on the minimum price. In Washington, processing prices are $60 a ton ($3 a cwt.) for juice and $80 a ton ($4 a cwt.) for peelers. Excellent growing conditions are causing Red Delicious to color, which could increase the overall packout percentage of that variety. New York growers who sell to Mott will find prices down 25 to 75 cents from last year’s processing prices, depending on variety. Mott’s juice price is reported at $4 a cwt. The weather is one of the main stories in Pennsylvania, where extensive hail damage in some orchards will cause apples to go into the juice market. Mott’s prices in Pennsylvania are also $4 a cwt. with peeler prices down from last year. The Appalachian processing apple price structure is determined by four major players, including Knouse Foods, of which Rice Fruit Company is a part. The other three companies are Mott’s, National Fruit and Bowman Apple Products. At press time, Mott’s was the only company to announce its price, and that announcement is the reason for the pessimistic mood of the region’s growers, said Rice. “With a smaller crop, Mott’s came out with a lower price for processing apples than they did a year ago. In an era when we’ve all seen our costs go up, and then you have a drop in supply, you should think that it would create an increase in price. But it doesn’t,” he said. In Canada, juice prices in Ontario are $5.25 a cwt., which is 50 cents more than in 1999. In Quebec, juice prices are $5.30 a cwt. f.o.b./farm.