Apple Crop Improving but Growers Continue to Struggle
Nov 8, 2003
WEEKLY FARM: Apple Crop Improving but Growers Continue to Struggle
By Emily Gersema
Associated Press Writer
BIGLERVILLE, Pa. (AP) - The sweet smell of ripe fruit hangs like a mist over this town just north of Gettysburg, where acres and acres of apple orchards thickly line the hills along Highway 34. The leaves on the apple trees have turned a rusty brown - a sign the harvest has ended, and a warning of the coming winter.
No one could tell from looking at the trees and the bountiful display at Hollabaugh Bros. Fruit Farms & Market that many apple growers are struggling. Apples of every sort - Yorks, Spencers, Red Winesaps, Fujis and Galas - are piled high in oak crates and boxes next to the tiny store. The bushels of fruit are the picture of health, their cheeks varying in shade from shiny rose and pale green to wine red.
As Brad Hollabaugh surveys the crates, the lines around his light blue eyes crease with worry. He may break even. He may be in the red. It is the same for him every year.
"It just hasn't been easy," he says, sighing. "The inputs equal the outputs."
To be able to pass on the farm, inherited from his father and uncle, to his 23-year-old son, Hollabaugh needs to turn a profit. He refuses to talk about how much money he spends and makes every year, only that "we don't pay income taxes. We don't make enough money to do that."
Hollabaugh and many other growers sell much of their apple crop to be made into items such as sauce, juice, apple butter and pie filling. They blame foreign competition, especially from China, for the weak market.
Jim Cranney, vice president of the U.S. Apple Association, says imports fell hard on the market in the late 1980s and 1990s, pushing farm prices off the edge.
"In order for U.S. apple growers to compete with the low-priced concentrate from China, they had to sell their apples even cheaper," he says. "We found ourselves in a situation where we had growing supply with larger crops."
Also, as supermarket chains merged during that period, they gained control over prices, Cranney says. This left the growers, who do not get government subsidies to support them through bad times, in dire straits.
In fall of 2000, Congress came up with an $150 million bailout for the apple industry. But growers continue to struggle, Cranney says.
Thirty-six percent of the 9.3 billion pounds of apples that U.S. farmers produce this year will be processed. The crop is 8 percent larger than last year's but is the smallest since 1988. Several apple growers have bulldozed trees and others have gone out of business over the past 20 years because prices are so low.
Farmers selling apples to processors have gotten as little as 10 cents a pound for their crops over the past three years, and that does not come close to covering growers' costs.
Susan Pollack, an Agriculture Department economist, says China and other competitors - Argentina, Chile and Germany - can produce apples for juice and sell it for far less than American growers, so U.S. processors are buying most of their juice from abroad.
The United States imported 96 million gallons of apple juice last year, 27 percent from China, department figures show.
Imports account for 97 percent of the juice sold to Americans. Almost all fresh apples on the U.S. market, on the other hand, come from American orchards.
Americans consumers and their changing tastes also account for some of the weakness in the apple market. Americans now consume on average 43 pounds of apples - including juice and sauce - every year, compared with 49 pounds in 1994.
Pollack says consumers are finicky when it comes to fresh apples. U.S. farmers grow over 2,500 varieties, but 15 of them account for 90 percent of the crop.
Although Red Delicious remains the top seller, the new favorite varieties are Fujis and Galas. Farmers adjust accordingly, uprooting less popular varieties and replacing theme with trees that bear the latest fads.
Cranney says growers are betting that the Honey Crisp apple - a fruit whose color looks like a scarlet blush - will be the next most popular variety.
"As you see a lot of regular consumer marketing companies, you would notice that there's a lot more selection in terms of brands and varieties of say, toothpaste," he says. "Apple growers are really no different than any other businessmen."
On the Net:
Agriculture Department's Economic Research Service: http://www.ers.usda.gov
U.S. Apple Association: http://www.usapple.org
This story can be found at: http://ap.tbo.com/ap/breaking/MGA0ZBNQRMD.html