In this installment of the ‘Agronometrics In Charts’ series, Sarah Ilyas studies the state of the U.S apple market. Each week the series looks at a different horticultural commodity, focusing on a specific origin or topic visualizing the market factors that are driving change.

Following adverse weather events in several major producing countries, the World Apple and Pear Association (WAPA), issued an update to the Southern Hemisphere apple forecast that was initially presented at the Association's most recent Annual General Meeting at Berlin's Fruit Logistica.

According to the revised forecast, which consolidates data from Argentina, Australia, Brazil, Chile, New Zealand, and South Africa, apple production is expected to increase by 2,38% to reach 4.974.990 T. 

Inclement weather affected apple harvests in New Zealand, where Cyclone Gabrielle struck orchards and took out more than one-fifth of the forecast volume. Hawke’s Bay, one of New Zealand’s most productive regions and the hub of the fruit-growing sector, is among the areas worst hit by Cyclone Gabrielle.

Horticulture underpins New Zealand’s economy, with apple earnings alone contributing around NZ$700m annually. These weather conditions are expected to result in a decrease in apple production by 9%. In contrast, Chile, which is the largest apple producer in the Southern Hemisphere, is expected to maintain its apple production levels from the previous season, while Argentina is forecast to grow by 24% to 525,000 metric tons.

In terms of exports, the WAPA predicts that apple shipments from the Southern Hemisphere will shrink by 3% to 1,556,668 metric tons in 2023, with Chile expected to remain the largest apple exporter in the region. These forecasts have important implications for the apple market in the United States, which relies on imports from the Southern Hemisphere to meet domestic demand during the off-season.

Source: USDA Market News via Agronometrics.

(Agronometrics users can view this chart with live updates here)

Washington is ready for a banner crop after two down years, which could see the national total approach a record 300 million bushels this fall. The apple market, however, is also beset with challenges such as international trade wars that have resulted in the elimination of exports to India, which could put a glut of apples on the domestic market, driving prices down at a time when farms are faced with inflationary costs of production.

This situation is particularly challenging for small apple operations in states such as New York, where growers are dealing with new labor laws that are escalating already high wage rates, possibly forcing some farms out of business. Week 17 saw prices at $32.01 per package, a 10% drop compared to the beginning of the year. 

"Yes, there will be many small apple operations that shut down and sell out over the next decade. The pace may increase before slowing, given that there are a number of simultaneous pressures such as the high cost of labor, fuel, fertilizer, infrastructure and equipment, declining exports, and intense domestic competition.

While those pressures mount, many multigenerational operations will have to reinvest or exit. Given the high cost of debt, many will either choose to sell outright or partner with an equity investor, which has been the trend, ” says Christopher Gerlach, U.S. Apple director of analytics.

"The apple industry will survive this but may look a bit different on the other side," he added. "If these pressures don't abate, and even if some do, there will be continued consolidation in the industry. Larger operations will try to take advantage of economies of scale."

Source: USDA Market News via Agronometrics.

(Agronometrics users can view this chart with live updates here)

Source: USDA Market News via Agronometrics.

(Agronometrics users can view this chart with live updates here)

In our ‘In Charts’ series, we work to tell some of the stories that are moving 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 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.