Issue link: http://read.dmtmag.com/i/298602
www.goodfruit.com GOOD FRUIT GROWER MAY 1, 2014 17 "Processors had difficulty in securing business," she said. "They were hesitant to purchase apples based on speculation about incoming orders." In addition, the inventory of processed apple prod- ucts was large. While Michigan and New York were pick- ing short crops in 2012, Washington State had a record large crop in 2012 and filled what would otherwise have been Michigan and New York's market to serve. More than half of Michigan's apple crop goes for processing in a normal year. With processors hesitant to buy at harvest time, Mich- igan growers themselves had to speculate—and they had to store processing apples and wait for the market. Drake described the negotiations that led to the announcement last September. For eight days straight, there were at least two conference calls a day before an agreement was reached. Michigan produced fewer than 2.5 million bushels of apples in 2012 and then followed up in 2013 with a crop estimated at 30 million bushels, which might be a record. However, Drake said, "We'll never know for sure. We left an estimated two to five million bushels in the orchards because of a labor shortage. There were not enough workers to pick them all." The U.S. Department of Agriculture's National Agri- cultural Statistics Service, which normally would be there to estimate the crop size and utilization, had dropped the apple crop reporting service after its funds were sequestered early in 2013. To add more tales to the short tail, Michigan's weather in 2013 brought the crop in late, while Washington's weather brought the crop in early. The Washington crop was also large, its third largest on record, driving many more apples into the processing market. Of the 140-million-bushel crop in Washington State, Drake estimated that 113 million will be packed for fresh market. "The extended harvesting season there led to some quality issues out of storage," she said. These apples would usually flow into the processing market, but she said, "Processors are buying less than last year, about 10 percent less. Some packing houses had to dump apple sorts in landfills because of no demand." On the good news-bad news front, the price of apple juice concentrate is currently about $8.50 a gallon, up from $7 a year before. That is an important outlet for processing apples. But on the bad news side, 84 per- cent of all the apple juice consumed in the United States comes from imported concentrate. Of that 84 percent, 80 percent comes from China, Drake said. USDA purchases The Michigan Processing Apple Growers, staffed by Drake and Phil Pitts at the sales desk, is a force pressuring the USDA to purchase processed apple products for the school lunch and other feeding programs. In January, USDA announced a $20 million "bonus buy." "They apparently got tired of our calling every week," Drake said, jokingly. She gave USDA credit for stepping in to make purchases when products are in surplus and markets are stressed. And she gave credit to Michigan processors for filling contracts when they become available. In mid-March, Michigan processors took more than 80 percent of the bonus offering for 493,000 cases of 8/64 apple juice, 145,000 cases of 8/64 cranberry/apple juice, all of the 575,000 cases of 24/300 applesauce and 100,000 cases of cherry/apple juice, and more than half of 337,000 cases of 96/4.5 applesauce cups. "USDA's regular quarterly purchases will all be much larger this year," she said. •