Issue link: https://read.dmtmag.com/i/497437
36 MAY 1, 2015 Good Fruit Grower www.goodfruit.com C onsumer demand for organic foods pushed up U.S. retail organic sales by 11 percent in 2013 compared to the previous year, and this growth is expected to continue. Sales of organic fruits and vegetables were up 15 percent and accounted for one-third of all organic food sales. And Washington organic tree fruits were no excep- tion. Sales continue to grow, prices have been good, and growers are contemplating certify- ing many more acres in the next few years. While total ship- ments of Washington organic apples were down for the 2013 crop compared to the previous year, this was due to the smaller crop that sold out earlier. The 2014 organic crop, at an estimated 10 million boxes, surpassed previous records, and shipments are ahead of the previous high years for both apples and pears (see Table 1). Over 7.5 million boxes of organic apples have been sold, with Honeycrisp and Jonagold organic apples sold out. Nearly all organic pears have been sold, and the 2014 crop was 16 percent bigger than the previous high. Prices (season-to-date average to mid-March) for all apples and pears are lower for the 2014 crop than the previous year. Average prices for most conventional apples are down $2 to $6 a box, with Honeycrisp off $8 a box, and Cripps Pink unchanged. Conventional pears are up $2 a box. Prices for organic apples are off by $2 a box for many varieties, by $5 a box for Fuji and Cameo, and by $10 a box for Honeycrisp. Cripps Pink is up $2 a box, and Granny Smith is unchanged. Both organic d'Anjou and Bosc are up $1 a box. The drop in Honeycrisp price from stratospheric levels is not unexpected as production volume has ramped up. But the price premium for organic apples is strong: 90-100 percent for Red Delicious, Golden Delicious, Granny Smith, Fuji, and Gala; 70 percent for Braeburn and Cameo; 47 percent for Cripps Pink; and 22 percent for Honeycrisp. In comparison, Gala and Fuji, the two largest volume organic apples, had premiums of 70 percent for the 2013 crop. Thus, organic apples are holding up better than conventional in the difficult market. This can be attributed to the strong shipments to the domestic market (see Table 1). Overall exports are down, but the majority of exports go to Canada, where there was no effect from the port slow- down. And, over the past few years, organic apple prices have increased along with increasing supply (see Figure 1), suggesting that demand is still not being met. While other regions of the United States are increasing their production of fresh market apples, Washington remains the dominant supplier of organic product. So where is all this going? The relatively high organic prices are being noticed. We have seen similar situations in 2001 and 2008, with large acreages of organic apples in particular entering the market at the same time (see Figure 2). In both cases, prices dropped due to the new supply overshooting demand. Then acreage leveled off, while demand kept growing and eventually caught up or surpassed supply. With the typical three-year transition period to bring orchards into organic certification, there is a built-in lag in the ability of growers to respond immediately to market signals. Each year, we present the current status of organic tree fruits at winter meetings to help people understand the trends and make more rational decisions. In the past, prior to the National Organic Program in 2002, most acres destined for organic certification went through a formal transition status with the certifier in advance, allowing us to see big acreage increases coming in advance. That is no longer the case, and instead, we have occasionally polled the industry about expansion intentions. This past winter, clicker surveys were done at five different grower meetings to gauge people's intentions as far as expansion. In part, we wanted to know whether concerns about the loss of antibiotics for fire blight control were allayed with the recent research advances. Apparently they have been. In January 2012, 93 percent of grower responses indicated they would reduce organic apple and/or pear acreage, or exit organic altogether, once antibiotics were no longer allowed. This dropped to 39 percent in January 2015. When asked about plans to expand organic tree fruit production over the next five years, 66, 41, and 59 percent of growers (Washington, California, upper Midwest, respectively) said they planned to add more acres, while 25, 54, and 41 percent planned to stay about the same. Very few expected to decrease acres or exit altogether. Washington growers were then asked to estimate the number of acres per fruit type, using pre-set ranges (1-20, Another burst of ORGANIC FRUIT? Good to Know 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Organic apple sales and prices Figure 1 Volume and season-average prices (all grades and sizes) for Washington organic apples. 8 million boxes shipped 6 million 4 million 2 million $16.99 per box $32.36 per box $41.25 per box CROP YEAR SOURCE: WENATCHEE VALLEY TRAFFIC ASSOCIATION AND WASHINGTON GROWERS CLEARING HOUSE ASSOCIATION 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Washington's organic apple acreage Figure 2 Certified and transitional acreage trends since organic certification of apples began in Washington. Two previous spikes in acreage in 2001 and 2008 put pressure on prices. 16,000 acres 12,000 acres 8,000 acres 4,000 acres Some historical events that have influenced organic apple production include the Alar incident, price volatility ($ Drop), the introduction of mating disruption (MD) for codling moth control, and market entry by national chain supermarkets (Retail chains). Alar $ Drop MD $ Drop $ Drop Retail chains =CERTIFIED ORGANIC =IN TRANSITION SOURCE: WASHINGTON STATE DEPARTMENT OF AGRICULTURE, WSU Will demand keep up with expanding organic tree fruit production? by David Granatstein and Elizabeth Kirby, Washington State University Tree Fruit Research and Extension Center, Wenatchee Organic apples are holding up better than conventional in the difficult market.