As the Washington apple production increases and U.S. apple consumption remains flat (if not arguably declining), we all agree increasing fresh apple consumption is priority No. 1. True as this statement is, another potentially devastating issue looms even larger on the immediate horizon—market access. Washington isn’t the only state planting apples: New York and Michigan are anticipating larger future crops, and when these increases are added to Washington’s, it’s very clear to me we need every export market. That makes market access priority No. 2.
Mother Nature is unpredictably controlling your destiny through availability and thus influencing economic viability. And as I look out the window today (April 15) as snow falls at 1,100 feet, she continues to throw her weight around creating doubt, unpredictability and indecision. However, bigger issues are being played out on the world stage as importing countries close access, funneling more and more of our product into existing markets. This season Washington, is benefiting from the small crops in Michigan and New York, but what about 2013?
Are you aware that the China market is closed (legal access that is)? In the 2011-12 season, China and Hong Kong accounted for over 2.5 million cartons. Hong Kong remains open today, but with only 8 million consumers, transshipments to China make up the vast majority of our exports. As of today Washington’s volume is down 21.4% compared to last season – that’s nearly 500,000 fewer cartons. Are you also aware that Indonesia’s volume is down 49% compared to last season – another 500,000 cartons? These two markets represent Washington’s third and fifth largest export markets for 2011-12. Next season, if these markets don’t return to normal import levels, the entire U.S. apple industry could feel it. Both China and Indonesia are market access issues—very complex issues, but solvable over time nonetheless.
Looking historically at Washington’s export numbers, and assuming every export market imported a quantity equal to its historical high, this equals approximately 50 million cartons. 129 million (the 2012 Washington apple crop) minus 73 million (the five-year U.S. average) = 56 million to export markets. Washington’s export volume record is just 36.6 million cartons.
You can probably guess that I follow the numbers – and I’m the first to agree numbers alone can be unpredictable due to the complexity of market influences. But, combined with Washington apple inventories and current pricing trends, they do provide guidance for good future decision making. And the export numbers today provide reason for pause.
At the last Washington Apple Commission board of director’s meeting on March 28 we discussed future funding for the Northwest Horticultural Council (NHC). One of the priority issues that NHC works on is market access, a responsibility shared with the Northwest Fruit Exporters (NFE). The Washington Apple Commission assists in funding NHC. The commission’s board confirmed the future priority of increasing exports by agreeing not only to continue funding NHC, but to support an increase in staffing necessary to stay ahead of their ever- growing responsibilities. I agree whole-heartedly with this support.
Over the last five years, on average, 73.3 million Washington apple cartons sold into the U.S. marketplace. The 2012 Washington crop remains an anomaly with the crop failures in the East, so we should expect a return to the average in 2013. For anything above this average we must have accessibility to export markets to protect our most important market. And without our No. 2 priority recognized, fully funded and prioritized, we are limiting our own success.
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