WENATCHEE, Wash. — Just as some analysts predicted a month ago, Washington apple prices have continued to slide due to a large state and national crop and apparently anemic consumer demand.
Wholesale prices averaged $24 per 40-pound fresh packed box season-to-date on March 1 for all grades and sizes of the main varieties, said Desmond O’Rourke, retired Washington State University agricultural economist and world apple analyst. Without Honeycrisp in the mix, the average is $21.50 per box.
“That’s probably a little higher than it really is because the season started later and at high prices,” O’Rourke said.
The average is skating along just above break-even for growers, and marketers need greater movement to get prices back, he said. Break-even averages about $20 per box with $12 for packing and marketing and $8 to the grower, he said.
Tom Riggan, general manager of Chelan Fresh Marketing, said he thinks prices will rebound as the crop shrinks but that this year is definitely more difficult for growers than the previous two years.
The main varieties outside Honeycrisp O’Rourke surveyed were Red Delicious, Gala, Granny Smith, Fuji, Golden Delicious and Cripps Pink.
As of March 6, USDA tracking of average asking prices among Yakima and Wenatchee shippers for extra fancy (standard grade) medium size 80 and 88 apples per packed box was $12 to $15 for Red Delicious, down $1 on the low end and stable on the high end since Feb. 9.
Most of the main varieties have slid $1 to $2 per box or more in the past two months, according to USDA, with only Honeycrisp gaining due to less supply. Proprietary varieties, while small in volume, are doing well in price, and organics are doing well.
A lot of small fruit pulls average prices down but growers with large fruit are doing OK with Gala 72s and larger over $26 per box, O’Rourke said.
“We’re seeing some retail prices we haven’t seen in a while. The WinCo store in Moscow, Idaho, had 3-pound bags of Fuji, Gala, Reds and Grannies for 97 cents per bag,” O’Rourke said. “I was blown away by that price. It tells you some marketers are under pressure to move product. This is a tough time of the year for the apple market. The next couple of months could be a real challenge.”
Prices usually stabilize in January when crops are smaller, but that didn’t happen this year, he said.
His own index of movement and prices shows consumers spending 3.5 percent less on apples in general nationwide, he said.
Marketers may have “underestimated the strength of retail demand this year. It’s sluggish overall for fresh apples,” O’Rourke said. “This year will cause a lot of head-scratching over what to do next, how fast to push ahead with new varieties and organics, how many Red Delicious orchards to take out when you still need some for export.”
Nationally, there were 77.3 million boxes of fresh apples in storage on March 1, 11 percent more than a year earlier, according to the U.S. Apple Association. Processing apple inventory was also up 11 percent at 33.3 million boxes. That’s apples for sauce, juice and baked ingredients. Total apples were 17 percent above the five-year average for March 1.
Washington accounts for the bulk of the national fresh crop and was at 68 million boxes sold on March 1 versus 72.6 million a year ago. Washington has the same amount, 68 million, still in storage.
The total 2017 Washington crop was estimated at 135.6 million boxes on March 1, down 6.7 million from a high of 142.3 million on Dec. 1 and Jan. 1, according to the Washington State Tree Fruit Association.
There has been “considerable diversion” of fresh apples to processing with the estimated size of the processing crop up 5 to 6 percent, while the fresh crop has fallen nearly the same amount, O’Rourke said.
Since Jan. 1, the estimated size of the Gala crop has shrunk 1.6 million boxes, Red Delicious 1.5 million and Honeycrisp 800,000, he said.
Riggan said the crop will probably shrink another 3.5 million boxes to 132 million, which will help prices. He said it’s taken about six months to reopen some export markets this year that had dried up last year.
There shouldn’t be much competition in the U.S. from Southern Hemisphere apples just now being harvested because there’s ample opportunity for them in Europe, where crops are down 39 percent from a year ago, he said.