A Bushel Of Ifs Fickle Markets, Mexican Tariffs Challenge State’s Apple Growers

There are places along the Columbia River where apples as big as softballs hang from the trees.

Here the orchards are carved from a landscape of sagebrush and soil, oddly green in a cradle of brown and gray hillsides.

In Grant Daniel’s 70 acres east of the Columbia River, a few stands of Fujis still wait a careful picking. The sunny days and cool nights have brought up the fruit’s sugar. When the apples are sliced open, they drip sweet nectar.

But Daniels, a second-generation grower, knows that a good crop is not always enough to make a good year.

“The grower is the bottom of the food chain,” he said. “We pick our crop and we have no idea what we’re going to get for it. I go around with a knot in my stomach.”

This year, his concerns range across the world to whether Taiwan wants big Fujis, if the U.S. will lose its biggest export customers in Mexico, and back home to if the harvest is down in other parts of the country and if last year’s large harvest is still taking up space on grocery shelves.

“It’s a true supply and demand marketplace,” Daniel said.

Meeting new demands

Daniel is one of those growers who is quick to respond to new demands. Along with the standard crops of Red and Golden Delicious, he raises one crop of Fujis to sell locally and one for the Far East.

For that export market, he wraps the apples in small paper bags early in the season so the sunlight can’t color them. He pulls off the bags shortly before harvest to get just the right hues of yellow and red to suit the tastes of Taiwanese buyers.

“They all sell overseas,” he said of the bagged apples. “No one in America will pay enough money for them.”

To protect the fruit from the sun, he spends 3.5 cents on each bag and another 12 cents per apple on labor to wrap and unwrap the apples. Each bin of the bagged Fujis costs Daniel an extra $200 to produce.

“It’s crazy,” he said. “I say that every year.” But the consumers in Taiwan want these apples and will pay top dollar to get them. “It’s a niche,” Daniel said.

In the past decade, Washington apple growers have learned to find niches and accommodate the varying tastes worldwide in order to balance out the price and demand fluctuations at home. Where once the state raised almost exclusively Red and Golden Delicious, growers have now branched out to a number of new varieties from places like Japan and New Zealand.

The Washington apple industry was born and made with the Red Delicious. That changed in 1987 when a huge, poor-quality crop led growers to look for more profitable solutions.

Enter the Fuji, which sold well in Asia. This year it could rank third in number grown statewide, after the Reds and Golds and beating out the Granny Smiths.

Sales and trade

This year’s Washington apple crop is low at 85.6 million boxes, down from 94 million boxes last year, said Jim Thomas, spokesman for the Washington Apple Commission. On average, a box of apples is 42 pounds.

In some cases, the trees are recovering from last year’s enormous crop. In other instances, the fruit was damaged by a June hail storm.

For the 3,500 growers in the state, the low harvest could be good news, if fewer apples bring higher prices.

But in September, Mexico enacted a 101 percent tariff on apples from the United States, essentially stopping exports from Washington and Idaho.

“Mexico is by far our largest export market,” Thomas said. The country received 5.5 million boxes of apples last year. Absorbing those apples back into the U.S. market would drive down the price, and the return for orchardists.

“Our industry has been working through every possible channel to get the tariffs reversed or suspended,” Thomas said. “So far we haven’t had any success. As time goes on, it gets more and more critical.”

Major apple shipments to Mexico start in mid-December, but even now the bad news forces down the return on the fruit.

While Washington apples will sell well in Asia, as usual, the Japanese market slipped through the fruit growers’ fingers. This year no apples were exported there. Though Japan’s government approved Red and Golden Delicious apples for the market, it wants to set new requirements for the importation of other varieties, apples local growers think will better suit the Japanese palate.

“We’re basically waiting to see if their government and our government can create a protocol for the new varieties,” Thomas said. “But so far our bilateral talks have been fruitless.”

“We’re still pretty optimistic that once we’re given freedom to market in Japan like we can in surrounding Asian countries, we’ll do pretty well,” Thomas said. “There’s obviously room to grow.”

Last year 37 percent of the apple harvest was exported. Though that number will drop this year because of fewer apples, sales look good. That’s good news for Washington’s farmers who have lost money two out of the last five years, Thomas said. There’s also good news at home.

“With the larger fruit and very good color, it looks like our sales to U.S. markets should be up considerably,” he said. “We’re keeping our fingers crossed. Growers need to get a good year under their belts.”

Despite the optimism, a few shadows hang over the harvest.

“There are some big ifs,” said Tom Schotzko, agriculture economist at Washington State University. “Last year’s crop was so large, they were still selling and shipping last year’s apples as they were bringing in this year’s.”

Also, the sales and marketing of this year’s crop is off to a sluggish start, he said.

Selling apples

What Washington’s apple crop needs is an infusion of good marketing, said Thomas. The Washington Apple Commission is working on TV and radio ads to sell the “Best Apples on Earth” to major cities. Fortunately, the slogan translates well into Chinese and Tagalog, for key export markets.

“We’re looking for any kind of advantage we can secure for growers to get more of their products in the stores,” Thomas said. That includes special promotion agreements with companies like Treetop and Pillsbury to promote the products.

An uncertain season

At Stemilt Growers’ Olds Station Warehouse in Wenatchee the scent of apples is in the air. Conveyer belts carry the emerald and ruby-colored Granny Smiths and Red Delicious past rows of workers, through cleaning and waxing machines and to the cardboard boxes that will hold this season’s jewels.

Workers move quickly and deliberately, culling bruised and discolored fruit.

A short season, like this year’s, could be bad news for packing plants which can’t deliver to all the markets they’ve developed. “We’ve bought ourselves a lot of shelf space in the world’s grocery stores,” said Tom Mathison, owner of Stemilt Growers Inc. “If we lose it now, we’ll have to buy back all that shelf space later.”

And “later” could be as soon as next year. After a season of low production, growers predict their trees will cycle into another record crop in 1998. “Everyone is anticipating it,” said Thomas of the Washington Apple Commission.

And a glut of apples next year could mean a good year for the packing plants, but low returns for the growers.

It’s yet another reason for the knot in grower Grant Daniel’s stomach.

There are a thousand reasons why he should worry, but he loves the work and he does it well enough to make a profit every year, he said. It’s rewarding enough for him to stay at what he calls “the bottom of the food chain.”

He does it because he enjoys the challenge of finding new ways to improve his crop and anticipate the world’s changing tastes. He does it because he likes the lifestyle and because, he says, “there’s a thousand stories in the naked orchard.”

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