Apple harvest

Federico Bernal Lopez picks Kanzi apples in Mt. View Orchard, East Wenatchee, Wash., on Oct. 9. The Washington Apple Commission says companies should focus sales this season on the U.S., Mexico and Canada.

WENATCHEE, Wash. — Foreign trade barriers, tariffs, COVID-19 restrictions, crop volumes and foreign competition have contributed to 28.5% of Washington’s apple crop being exported in the past season compared to the five-year average of 31.5%.

In response, the Washington Apple Commission is urging the industry to focus on what Commission President Todd Fryhover calls “the home court” — U.S. domestic sales and exports to Mexico and Canada.

“We won’t divest ourselves from other countries, but right now our focus needs to be on building up Canada and Mexico,” Fryhover said following an Oct. 8 virtual commission meeting.

He does not foresee export volumes increasing in the 2020-2021 sales season due to tariffs and currency exchange rates. Domestic sales are safer and more easily controlled, he said.

The commission only promotes apple exports. It hasn’t promoted domestic sales since losing a court case in 2003, but supports the discussion of voluntary grower assessments for collective industry domestic promotions aimed at consumers. Individual companies promote apples to retailers.

The commission has allocated $12 million for export promotions for the 2020-2021 sales season with $2.65 million coming from grower assessments and reserves and the rest from federal aid.

It will spend $2.1 million in Mexico and has increased its allocation, originally set in May, for Canada from $525,000 to $630,000.

It has targeted $2.3 million for India, $1.1 million for Vietnam, $800,000 each for Indonesia and China, $588,000 for Thailand and $579,000 for Central America.

Further, it has set aside $445,000 each for Malaysia and the Middle East, $380,000 for Taiwan and $330,000 for Colombia and Peru.

The commission is saving $200,000 because of less travel due to COVID-19 restrictions, Fryhover said.

Traditionally, Mexico is the largest export market at about 10 million, 40-pound boxes or more annually. The record is 16 million boxes in the 2014-2015 sales season.

Washington exported 11.1 million boxes of apples to Mexico in the 2019-2020 sales season. Fryhover said the coming season will probably total about 9 million.

On average, 68% of all Washington apples are consumed in the U.S. and 12% go to Mexico and Canada. Washington is the No. 1 import origin in both Mexico and Canada, accounting for 90% of Mexico’s apple imports and more than 50% of all apples sold there, Fryhover said.

This year, Mexico has a light domestic crop, which fuels imports, but that’s countered by the peso’s low value compared to the dollar, he said.

The European Union and Mexico have signed a free trade agreement, which reduces the Mexican duty on European apples to zero over 10 years, Fryhover said. There is no duty on U.S. apples. Ocean freight from Europe is relatively inexpensive compared to trucking costs from Washington, he said.

“A focus for us is to build brand awareness and food safety to maintain our position,” Fryhover said.

Canada imports 5 million to 6 million boxes of Washington apples annually, and Fryhover said he would like to see that grow by 2 million boxes.

Canadians like Washington apple varieties and organics and are generally able and willing to pay the higher cost of Washington apples versus less expensive apples from other countries, he said.

Washington’s high cost of production and the strength of the dollar compared to foreign currencies work against Washington apple exports, which then have to rely on quality and food safety as selling points, he said.

Washington’s 2020 fresh crop was forecast on Aug. 1 at 134.2 million boxes. While the forecast has not yet been updated, many in the industry expect the crop to finish picking next month at 120 million to 125 million boxes based on Gala and Golden Delicious picking lighter than forecast, wind damage, sizing and COVID-19 restrictions reducing labor, Fryhover said.

Recommended for you