Smaller crop, strong dollar reduce apple exports

Dan Wheat/Capital Press Fuji apples bound for Taiwan feed into the front end of Washington Fruit & Produce Co.'s new apple packing line in Yakima, Wash., on Dec. 8. It's heavy shipment time to Taiwan but exports overall are down because of a smaller crop and the strong U.S. dollar.

WENATCHEE, Wash. — A smaller crop and stronger dollar have reduced Washington apple exports 28 percent as of Dec. 1 compared with the same time a year ago.

“We have a huge difference in crop volumes. It’s hard to compare the two years when they are so vastly different,” said Todd Fryhover, president of the Washington Apple Commission, which promotes industry exports.

The 2015 Washington apple crop is currently estimated at 118.5 million, 40-pound boxes compared with a record 141.8 million that were sold from the 2014 crop.

“The domestic market is No. 1 and the industry will take care of that demand and we will work diligently to keep our export customers happy until we have more volume for them next year,” Fryhover said.

Another factor reducing exports is the growth of new club and managed varieties that mainly sell domestically, he said.

The industry rule of thumb is that 30 percent of the volume is exported. It may be closer to 20 to 15 percent this season, he said.

From Sept. 1 through Dec. 1, 7.8 million boxes of Washington apples were exported, down 28.2 percent from 10.9 million for the same period a year ago, Fryhover said.

This year’s statistics are closer to two years ago when 8.4 million had been exported by Dec. 1 out of an 115-million-box crop.

The largest export market, Mexico, is off 38 percent and the second largest, Canada, is down 26 percent so far this season, he said.

“Both are apple producers so that makes our early sales there slow and our smaller crop and higher-value dollar don’t play into our favor,” he said.

About 1.5 million boxes have been shipped to Mexico season-to-date, 1.2 million to Canada and 1.5 million to Taiwan, he said.

That rate is on target given the size of the Washington crop, he said.

Washington exported 48.7 million boxes of apples from the 2014 crop and likely will be 30 million to 35 million boxes from the 2014 crop, Fryhover said.

China has bought 447,000 boxes of Washington apples so far this year compared to 24,000 a year ago. Closure of the market until Oct. 30 followed by labor disruptions at West Coast ports hindered sales.

This year, for the first time China is open to all U.S. varieties. Costs are more stable and lower with a 23 percent duty and 13 percent value added tax than they were through the “gray market” through Hong Kong, Fryhover said.

He anticipates sales will reach slightly under 2 million boxes this season but will grow in ensuing years with larger Washington crops.

E-commerce or online sales is a growing trend for all sorts of goods in China. Fryhover said he and commission members Jon Alegria, president of CPC International Apple Co., and Chelan grower Dave Robison met with importers, retailers and e-commerce sales organizations in a November trip to China. About 10,000 boxes of Washington apples were sold online in China in a single day on “Singles Day” or “1111,” on Nov. 11, a sales day akin to the U.S. Black Friday, he said.

The commission will spend $7 million to $8 million on export promotions this season with 38 percent of that in Southeast Asia, 19 percent in Mexico, 18 percent in India and 13 percent in China, he said.

Fryhover said he is concerned about Canada and Mexico imposing tariffs on Washington apples if Congress does not change country-of-origin labeling. Both countries object to COOL.

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