The Fruit Growers News - November 2001


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Apple Growers Anticipate Turnaround

By Greg Brown Associate Editor

Watch world supply, be cautious. As growers wrap up their harvest and begin the winter horticultural show season, they may be seeing fewer familiar faces. The apple industry is shrinking. Apple growers across the country have been disappearing at an alarming rate, according to recent estimates from leading apple states. Michigan lost 15% of its apple growers and 18% of its apple acres between 1997 and 2000, according to Federal/State Michigan Agricultural Statistics Service (MASS). Apple growers should not let any decent prices they receive this season go to their heads. The poor apple markets of the past few years could just as easily return tomorrow. Rob Steffens, a Michigan apple grower, says a variety of reasons have caught his fellow growers off guard. “Some of the older guys may have tried to live with their old trees and milked their operation too long,” said Steffens. But the problems facing growers are serious and they should be cautious. “Growers would be kidding themselves if they think they are over the hump just because of this season,” said Steffens. Because of weather conditions across apple growing regions the crop was smaller this year and prices for some fresh apples were good. There were 1,100 commercial apple farms in Michigan at the end of the 2000 season, 200 fewer than three years earlier, according to the MASS survey. That sharp drop was mirrored in California, according to Kenton Kidd, president of the California Apple Commission. (Click here for table.) “As far as commercial growers are concerned, we’ve dropped from 500 to 367 in just five years,” said Kidd. “As far as total acreage, we’ve dropped from 39,000 to 23, 000 in the last 11 years.” The overproduction has created a tremendous pressure on the marketing of apples at a profit, said Kidd. Throughout the world - in South America, New Zealand, Argentina, Chile, and China - there has been significant overproduction. “We’re trying to master the supply and demand situation when there is no money in it,” said Kidd. “The easiest thing to do is to decrease the amount of apples but it is not the easiest in term of how it effects individuals in our industry. “It is a situation that hurts you personally, to see friends going by the wayside on the apple deal,” said Kidd. “But a lot of people around the world seem to have planted very heavily during the 1980s and 1990s. In 1995, it seemed to have caught up with us all.” When China began planting millions of apple trees, they became a serious contributor to the market’s disintegration. Since then, they have flooded the apple concentrate market and ruined our juice situation, said Kidd. But Kidd believes that things may be beginning to look better. “I think there is a leveling point and I think we are getting close. If Mother Nature gives us a break the next few years, we could make a profit and start to do well again. We have to be a lot more cautious and a lot more aware of the world market and the world situation. All these things make a big difference.” Back in Michigan, orchards covered 47,500 acres at the end of 2000, an 18% decrease since 1997. Mark Arney, president of the Michigan Apple Commission attributes the drop in growers to consolidation, poor returns, and - in areas of high land values - suburban development and sales to home developers. “It may just be an adjustment if the economic situation improves for the grower. If not there probably will be a continued shrinkage,” said Arney. “It is important to note that acreage reduction has not significantly effected harvest size due to higher density, newer plantings.” Arney agreed that the poor apple economy has affected growers he thought were recession proof. Finding help for growers is a tough proposition. “They need to consult with their respective marketers (shippers), university and industry consultants to see what’s best for them given their situation - varietal makeup and age of trees,” he said. In the west central region of Michigan, where Steffens grows apples, 3,500 acres of orchard were removed from production in just three years (1997-2000). Some of those who went out of business were Steffen’s neighbors. The poor apple economy has effected everyone. “The last three years have been terrible; there have been many growers that have gone out of business,” he said. Some of those growers might not of been future oriented, some may have expanded too fast and some were just unlucky. “Speaking with my marketing guy this morning we discussed the fact that this year growers should not get overly excited about anything. This thing could straighten out in two to five years if it can just remain where it is.” But for now, be cautious. “It is necessary to watch your financing, have good quality fruit and don’t go out and spend all of your money on new trees. We are doing this and, we are hopeful that we will be able to weather the storm,” he said.