In this installment of the ‘Agronometrics In Interviews’ series, Sarah Ilyas studies the state of the US apple season in an exclusive interview with the Executive Director of the US Apple Export Council, Will Callis and the Executive VP and Sales Manager of United Apple, Brett Baker. The series is based on interviews with esteemed professionals from the industry, focusing on a specific origin or topic and visualizing the market factors that are driving change.

Q: Can you tell me a little bit about the US Apple Export Council?

Will Callis: We are the US Apple Export Council. We represent the international interests of Apple producers from California, New York, Pennsylvania, Michigan and Virginia. So our five states are responsible for just under half of all Apple production in the United States. Washington represents the other half.

Q: How's the Apple season playing out so far in the US? 

Will Callis: The California season is over at this point. However, the Apple season on the East Coast is going very well. We have strong crops in Michigan and New York. Volumes are up. Sales are very good, especially domestically, and there's really strong demand.

Q: How have prices fared this season?

Brett Baker: Pricing is certainly up. Is it enough to cover the inflation that the growers have experienced? I’m not certain, but certainly, pricing is up and it has helped with what the growers need with increased costs on the farms.

Source: USDA Market News via Agronometrics. Agronometrics users can view this chart with live updates here

Q: What are some of the challenges that the Apple industry is facing in the US?

Callis: Costs in the United States are going up. Fuel costs, fertilizer costs, and labor costs in the United States have gone up a lot. We're struggling with a lack of labor in the United States. The labor market is very tight, and that's driving up wages because people can get $20 an hour working a service job. So the farm community has to meet the same wages to get the labor. Transportation is very expensive because of higher fuel costs and there's a lack of truck drivers as well. Additionally, we're faced with a challenge on the consumer side because of inflation.

Budgets are very tight in the United States so there's pressure on retailers to have low-priced products for them to purchase. This has been forcing the growers and the shippers to focus on efficiency in their operations, to lower labor costs to try and meet the price point that the consumers can meet. In terms of international markets, similar challenges apply. We have difficulty with logistics. Shipping costs are coming down, but they're still higher than they were pre-pandemic. So shipping to international markets is very expensive.

Baker: There's very poor availability as well. Many of the routes that we used to have before the pandemic are no longer in existence. For the East Coast to ship to Southeast Asia, for example, it's 20 days longer than it was two years ago. What used to be 45, 47 days, is now 61 to 65. There's less availability of vessels and containers, and there's less direct routing.

Q: What is the future outlook for the US apple industry? 

Baker: As far as the orchard, labor is a large expense and a large hindrance and restrictor for how large a farm can get. There's constant research and development being done in automating the harvest and the pruning and whatnot.

We hope that that comes through because, again, every year the labor supply is getting smaller and smaller, so it gets more and more expensive. And we realize that we need to keep costs down to meet a price point on the shelf that makes families feel comfortable about bringing home our apples. So, again, we certainly hope that research and development continue in automation in the orchard as well as in the packing house.

Callis: The other thing that the US has really focused on in the last ten to 15 years is varietal development. So we have the old, what I call the heritage varieties Red Delicious, Royal Gala, Golden Delicious, Granny Smith, those types of apples. But the US is really focused on expanding varieties.

Honey Crisp is one that we know in the United States, it's called Honey Crunch in Europe. That really hit the market around 15  years ago at a commercial level, and it's continued to maintain a price premium. And so a lot of people have developed both publicly available as well as club varieties to try and achieve a premium for their growers so that they can maintain profitability. So we continue to focus on new varieties that meet consumer demand and then work to find new markets for those, whether in the United States or around the world.

Q: How important is data for you?

Baker: Data is extremely important. We're constantly researching and evaluating the trends of our customers. We're constantly analyzing the cause and effects of price changes and whatnot. As far as the orchard, we're constantly analyzing data and continuing to use smarter technology to make sure that we're not just broadly putting fertilizer out, we're putting it in the right areas that need it. If a certain part of the orchard doesn't need it, then we don't use it. So we're constantly using research and data to fine-tune and be more of a precision farming rather than just, well, this is what Grandpa used to put out here. So we'll put it out here.

Callis: Then on the packing side, inventory management efficiency is great. A lot of people on the East Coast pack to order. So knowing what you have in inventory, working with your retailer to understand what their demands are, pulling out the right product and packing it in an efficient way so that you can put what that customer wants and have another market for the sizes and grades that they don't need is really important as well.

Source: USDA Market News via Agronometrics. Agronometrics users can view this chart with live updates here.

In our ‘Interviews’ series, we work to tell impactful stories by collaborating with leaders in the industry. Feel free to take a look at the other articles by clicking here.

All pricing for domestic US produce represents the spot market at Shipping Point (i.e. packing house/climate-controlled warehouse, etc.). For imported fruit, the pricing data represents the spot market at the Port of Entry.

You can keep track of the markets daily through Agronometrics, a data visualization tool built to help the industry make sense of the huge amounts of data that professionals need to access to make informed decisions. If you found the information and the charts from this article useful, feel free to visit us at www.agronometrics.com where you can easily access these same graphs, or explore the other 21 commodities we currently track.