WENATCHEE, Wash. — As sales of the 2016 Washington apple crop approach the midway point, the price of Red Delicious is dropping significantly.
The average asking price of extra fancy (standard) grade, medium size (80 to 88 apples per 40-pound box) in Wenatchee and Yakima dropped $3 on the low end and $2 on the high end in one month, according to USDA tracking. The prices were $13 to $16.90 on Feb. 8, down from $16 to $18.90 on Jan. 9.
All of those prices are below grower costs, said Desmond O’Rourke, world apple market analyst and retired Washington State University ag economist in Pullman. The price of Reds likely will go lower, he said.
“About two-thirds of the total Red crop remain to be sold and they’re 34.6 percent of what’s left in storage,” he said. “But with prices this low that will help them sell in major markets like Mexico and India.”
Tom Riggan, general manager of Chelan Fresh Marketing in Chelan, said some super efficient growers may still be making money on Reds but that Reds and Gala are both selling below costs and make up 55 percent of what’s left of the 2016 crop to sell.
The total fresh crop shrank 1.34 million boxes from Jan. 1 to Feb. 1, from 137.1 million to 135.7 million, according to the latest industry report.
Unfortunately, only 23,000 boxes of the shrink was in Reds but they likely will shrink more in coming months as more large size, of which there is an abundance, are diverted to processing, Riggan said.
As of Feb. 5, 60.9 million boxes had been sold versus 54.7 last year at this time and 64.3 two years ago from the record 2014 crop.
Of the 76 million boxes left to be sold, 26.5 million of them are Reds and 15.8 million are Gala. Eventually all the Reds and Gala will move on the fresh market or to processing, Riggan said.
Reds sell better in the Midwest than on the coasts, he said.
Growers and shippers are doing well on managed varieties but they make up smaller volume, he said.
Total national fresh holdings are at 85.7 million boxes, up 13 percent from a year ago and 9 percent from the five-year average, according to U.S. Apple Association.
Sales of Granny Smith in Washington is 9.6 percent ahead industry sales volume targets and Golden Delicious is ahead by 7.9 percent, Riggan said.
But Fuji and Gala are behind by 10 percent and Reds by 4 percent, he said. Fuji will catch up as a later variety, but Gala and Reds are a concern, he said.
“It’s definitely not a train wreck but it’s nice if we’re ahead by mid-season and not too far behind,” Riggan said.
While prices are not as good as a year ago with a smaller 116-million-box crop, they are much better than two years ago when Reds fell to $8 per box from the record 144 million boxes.
As of Feb. 5, 17 million boxes had been exported compared with 14.6 million last year and 21 million in 2014.
“Fruit is really large this year and a lot of exports don’t want large. They like medium to small. Thats why it’s down a bit, plus the strong dollar,” Riggan said. “It would be nice to sell more overseas.”
O’Rourke said weekly shipments are maintaining a strong pace in the region of 3 million boxes per week. The key thing is to keep moving Reds and Gala, he said.
While Red prices have dropped, USDA tracking shows Gala unchanged from Jan. 9 and Dec. 13 at $19 to $22.90, Fuji unchanged at $25 to $28.90 and Granny Smith unchanged at $19 to $23.90. Golden Delicious was up $1 on the low end to $22 to $24.90. Honeycrisp was up to $64 to $65.90 from $55 to $62.90 on Jan. 9. The price is going up as volume declines.
Under these conditions about a third of growers make money, a third break even and a third lose, O’Rourke has said.