CHELAN, Wash. — Wholesale prices of Washington apples are running about 7 percent higher than last year but a major marketer says they should be even better given the small 2018 crop.
And Gala, forecast last fall to overtake Red Delicious at No. 1 in volume, might not. The latest estimate has the two running neck and neck with Reds slightly ahead.
Prices are hindered by export sales flagging because of tariffs on U.S. fruit in Mexico, China and India and because of price negotiations, says Tom Riggan, general manager of Chelan Fresh Marketing, one of the top-volume fruit marketers in the state.
“Domestic sales are on par with last year. The fall down is exports. Prices are not where they should be for this size of crop. They should be much stronger. Part of it is export and part of it is price negotiations. This small a crop and the way fruit is moving, it could be selling for higher prices,” Riggan said.
Average asking prices among Yakima and Wenatchee shippers for size 80 and 88 for standard grade Gala were $18 to $26 as of Feb. 4, according to USDA. The same grade and sizes of Red Delicious were $16 to $19; Golden Delicious, $22 to $28; Fuji, $18 to $24; Granny Smith, $27 to $32; and Honeycrisp $44 to $52.90.
With slight variation, those prices were all basically unchanged from Jan. 4 and Dec. 5.
The average price season-to-date for all varieties is about 7 percent greater than last year which, along with weakened exports, gives marketers incentive to push sales, said Desmond O’Rourke, world apple market analyst and retired Washington State University ag economist.
Weekly industry sales are averaging about 2.7 million, 40-pound boxes of apples which is normal for this time of year.
As of Feb. 1, the total crop was estimated at 120 million boxes with 48 million (40 percent) shipped and 72 million (60 percent) yet to be sold, according to the Washington State Tree Fruit Association.
So far 25.5 percent of the crop has been exported, down from a normal 30 percent. Exports are down 29.2 percent from a year ago with India down 58 percent, China down 36.8 percent and Mexico down 27 percent, O’Rourke said.
China seems willing to talk and may ease tariffs on fruit, wheat, vegetables, nuts and all other agricultural commodities it has tariffed, O’Rourke said.
“Things could change quickly if we had a reversal on tariffs. Our export market is such a big part of state apple movement that when it slows it affect everything, especially Red Delicious of which about 70 percent is exported,” Riggan said.
Total crop size grew 2.2 million boxes from a month earlier because of packouts, the amount of fruit coming out of storage suitable for packing, being greater than estimated, Riggan said.
Packout estimates were low because of concerns of fruit storability given some quality issues at harvest, he said. Fruit has stored better than expected and with a small crop certain markets are taking grades and sizes that they might not if more fruit was available, he said.
The 2017 crop finished at 131.7 million boxes and the record was 143.6 million in 2014.
Riggan said packouts should remain good for much of the rest of the season which will overlap the 2019 crop for three months in late summer and fall.
Marketers will control movement with price to not run out of fruit before the 2019 harvest begins in August, but supplies of Honeycrisp, Gala and Granny Smith could tighten in late spring and early summer if the current sales pace continues, Riggan said.
In early August, the association forecast Red Delicious, Washington’s top apple in volume for 83 years, to fall to second place behind Gala in the 2018 harvest.
Red Delicious was forecast at 28.3 million boxes down 14.7 percent from the 33.2 million of 2017. Gala was expected to be 31.7 million, up 3.3 percent from 30.7 million.
By Nov. 1, it was Gala 28.2 million and Reds at 27.2 million. The Feb. 1 storage report pegs Reds at 23.84 percent of the crop and Gala at 23.51 percent.
That’s so tight that the season-end final could go either way, O’Rourke said. Reds are running 72 percent packout right now while Gala is 68 percent, he said.