August 08

August 2008, World Apple Report Highlights

Can Local Deliver?
Buying local products is all the rage. Rising costs of long-distance freight, and concerns about global warming have made local supplies appear more desirable. This article examines how well local suppliers can meet the new expectations being placed upon them. A key issue will be how narrowly "local" is defined. Currently, the definition can vary by jurisdiction (county, state, country) or by mileage from a retail outlet (100, 200, 500 miles, or more). The size of the market for local products is equally ambiguous since there is not yet any certification system for local products. Clearly, as supplies of "local" products increase, so will the demands for monitoring of safety, credibility and transparency. Once the initial euphoria passes, local products will have to deliver superior benefits in price, quality, reliability, etc., if they are to outcompete efficient, long-distance suppliers of comparable products.

Organic Boom in Washington State
A new publication from Washington State University, "Profile of organic crops in Washington State - 2007," by Elizabeth Kirby and David Granatstein, shows that fruit crops now account for 13.5 percent of the 81,472 certified organic acres in the state, but account for over 70 percent of the total acres in transition. Organic acreage as a share of total acreage in 2007 was 4.6 percent for apples, 5.6 percent for pears and 2.9 percent for sweet cherries. There were more than 1,000 organic acres each of Gala, Fuji, Red Delicious and Granny Smith. If all the transition acres complete the process, organic fruit acreage in the state could soon approach 20,000 acres.

Real Demand for Fresh Apples Surges
The World Apple Report has been tracking changes in real demand for fresh apples in the United States since the 1993-94 season. Real demand is measured in terms of average daily shipments at real (deflated) prices. Daily shipments for the last three seasons have averaged between 12 and 14 million pounds from September through April, then fallen to 10 million pounds in May and June and below 8 million pounds in July and August. Average daily shipments in May 2008 were 30 percent above the previous two-year average, but in June 2008, fell to 26 percent below the two-year average. Clearly, marketers were eager to run down inventory in 2008. However, real demand for the entire 2007-08 season has maintained the high levels of the previous two seasons.

Special Statistics
United States: Average Daily Shipments of Fresh Apples to the U.S. Domestic Market, by month, 2005-06, 2006-07 and 2007-08 Seasons (chart).
United States: Index of Retail Prices of Fresh Apples, by Month, Actual and Deflated, 2005-06, 2006-07 and 2007-08 Seasons (chart).
United States: Index of Real Cumulative Retail Demand for Fresh Apples, 2005-06, 2006-07 and 2007-08 Seasons (chart).
Rate of Growth of World Exports, by Region, 2000-2009 (chart).
United States: Deflated Prices of Fresh Apples, 1990-2008 (chart).

The authoritative guide to the world apple business today.

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