Market Update

Market Snapshot*

The U.S. Department of Agriculture was reporting the following prices on tray packs of Extra Fancy Grade apples:

Michigan: Red delicious and golden delicious, size 88s, $16-18; 100s, $15-16; gala, 88s, mostly $20; 100s, mostly $18; mcintosh, 88s, $18-20; 100s, mostly $18.

New York: Gala, size 88s, mostly $22; mcintosh, 88s, mostly $20; 100s, mostly $18-19; empire, 88s, mostly $19-20; 100s, $16-18.

* Prices from the USDA's Fruit & Vegetable Market News, Jan. 13.

The Shipping Scene

Apple growers throughout the U.S. are reporting exceptional quality and ample supplies this season. New figures from the Vienna, Va.-based U.S. Apple Association indicate that apple holdings as of Jan. 1 were 81.5 million bushels, a 10% drop from a year ago but 3% above the five-year average of 79.3 million bushels.

Volume was up at Applewood Orchards Inc., Deerfield, Mich., as the company completed its transition to controlled-atmosphere storage, said Scott Swindeman, vice president.

"We should have good, high-quality fruit to last us right into the new crop," he said.

The company ships a wide variety of apples, including red delicious, golden delicious, fuji, braeburn, jonagold, mcintosh, jonathan and rome varieties.

"We have a very nice range in sizes to work with this year," Swindeman said. "The condition is the best that I've seen in many, many years."

The company uses the SmartFresh Quality System to provide consistent freshness and shelf life for consumers.

"Everything went into (controlled-atmosphere) in great shape, so we're feeling very, very good about the long haul," he said. "Flavor is outstanding this year."

But while Swindeman may be happy about the quality of the product, he's not so excited about prices.

"Prices have been a little disappointing up to this point," he said, but he was optimistic that they will improve as the season progresses.

In Wenatchee, Wash., Roger Pepperl, marketing director for Stemilt Growers Inc., also is pleased with this year's crop.

"Crop movement is up, and sales are up," he said.

Growers managed to work their way through some extremely warm temperatures in the summer and a bit of a freeze at the end of the harvest to produce a good, flavorful apple crop, he said.

This year's crop has a nice size profile, which meets the demands of the domestic market, he added.

Although the company offers a full range of varieties, Stemilt currently is focusing its promotional efforts on its proprietary Piñata variety.

In addition, "Galas have been shipping like crazy," Pepperl said, which means supplies are tightening up, opening promotional opportunities for varieties like pink lady, fuji and braeburn.

Early prices were low this season because the crop was coming off small sizes and cheap prices from last season, Pepperl said. Prices are beginning to inch upward with the better sizing and higher demand for this year's crop, but apples should remain a promotable item.

January to April is a good time to move organic apples, Pepperl said, adding that many retailers are reporting double digit sales increases in that category.

In Lafayette, N.Y., Robert Rigdon, co-owner of Apple Acres, said quality and movement have been excellent, despite a large crop in the East.

"The surplus is rapidly disappearing," he said.

Price levels are lower than last year, but like other shippers, Rigdon was optimistic that returns for growers would improve by March or April, in line with supply and demand.

Supplies at Apple Acres were slightly above year-ago figures this week, but Rigdon said, "We think it's a very manageable situation."

Ample rainfall during the summer resulted in good sizing in New York, he said, with plenty of empire, mcintosh, red delicious, golden delicious, gala and other varieties available.

With New York being the nation's second-largest apple producer, supermarket chains face a lot of competition from roadside stands and farmers markets, Rigdon said. But this time of year, when most of those have closed, is the company's busiest season.

Various apple associations are helping grower-shippers move their product.

The Fishers-based New York Apple Association Inc., for example, has lined up a number of promotional programs in the form of in-store demonstrations, advertising support, innovative coupons for shoppers, rebates for retailers and possibly some retail bin programs, said David McClurg, vice president of marketing.

The Dewitt-based Michigan Apple Committee is giving away 10 Nintendo Wii prize packages in a contest that runs through Feb. 28, and the committee also is conducting a school sweepstakes promotion through January and an online recipe contest, said Holly Whetstone, communications and marketing specialist.

(By Tom Burfield, Western correspondent for The Packer. The Packer and Red Book Credit Services are part of food360º, a division of Vance Publishing Corp., Lincolnshire, Ill.)

Resources

January 15, 2010