April 2020 - 26

Michigan apple growers challenged by chaotic market
By Gary Pullano
Managing Editor
The stark impact of trade tariffs and
other challenges facing the U.S. apple
industry were reflected during the
Michigan Processing Apple Growers'
(MACMA) annual meeting held March
12 near Grand Rapids, Michigan.
MACMA is a division of
the Michigan Agricultural Cooperative
Marketing Association. It is a voluntary
membership association, which is
made up of more than 700 apple
grower members. The primary goal of the
association is to obtain true market value
for apples produced by its members.
Dawn Drake, MACMA's secretary/
manager, outlined the difficulties faced
by Michigan and eastern U.S. growers
whose markets have experienced an
influx of Washington state apples that
would likely have been directed to China
and other foreign markets if the trade
restrictions had not been enacted by the
U.S. government.
" We are at a crossroads on whether we
are going to be able to stay in business or
not, " Drake said in her report to Michigan
growers and affiliated businesses. " If we
don't start to get some increased prices,
then it's going to be very difficult for us to
continue to carry on. "
In the 2019 price negotiations with
Michigan and in the East with our slow
fresh market. It's not uncommon for our
fresh houses to be running only two or
three days a week. "
Drake said that when marketers saw
what was happening in Washington state,
" and they recognized what was happening
out there themselves, because of the trade
situation they didn't have any choice but
to dump all of their fruit into the East. "
" We hear about the Turkey case with
Phil Pitts, sales desk manager for the Michigan Processing Apple Growers, also known as
the as the Apple Division of the Michigan Agricultural Cooperative Marketing Association
(MACMA), was honored March 12 upon his retirement after serving at MACMA since
2003. Pitts is shown with, from left, Linda Stocchiero, Tracy Collins and Dawn Drake,
MACMA's secretary/manager. Pitts was named the Michigan Pomesters' 2019 " Fruit Man
of the Year. " Photo: Gary Pullano
processors, " we were able to get a 10%
increase in minimum prices. The large
Washington crop made it imperative
to lock down minimum prices, " Drake
said. " We are trying to get back to more
stabilized pricing vs. the roller coaster.
" We were able to get better prices
because of the short crop (in Michigan), "
Drake said. " We estimated the crop to be
25 million bushels, but as we moved the
crop we recognized it wasn't even going to
meet 25 million bushels.
" As we looked at the processing market,
we had excellent demand, " she said.
" There were cheap prices in the East and
in Washington. When we recognized the
crop in Washington state - and what was
going on in the East - it really created a
ceiling for us for what we were able to
achieve because there were already apples
being offered at prices that were cheaper
than our processors were willing to pay
for apples delivered into Michigan, so it
was a challenge. "
Drake said there was little to no
"
25 Years of columns written by
beloved grower Jerry Mills
"
processor activity in the East so when
growers in North Carolina, and even in
New York state - who were accustomed to
processors in the Southeast buying their
fruit - " they did not go down this year, so
those growers were faced with lots of fruit
on hand and no home for it. "
One of the brighter spots for the
2019-20 crop was the Michigan cider
market, Drake said.
" That really acted as a vacuum this fall,
and utilized a lot of juice apples. On the
other hand, we had such a beautiful crop,
beautiful size, quality - everything, we
had enough apples that we had to utilize
in the cider market. "
Drake said the single-strength apple
juice market continues to decline. " The
reason for that is because there are so
many choices in the marketplace now,
when we look at some of our customers
who say that they utilize local grown and
have a commitment to our Michigan
industry. "
Using one large retail customer as an
example, Drake said the retailer had a
not-from-concentrate label or " made with
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fresh-pressed apples. "
" A lot of processors have gotten away
from fresh-pressed juice and they utilize
foreign apple juice concentrate now, " she
said. " As of (February), foreign apple juice
concentrate imports were up 29%.
Fresh market
The large Washington crop created
downward pressure on pricing, Drake said.
" When we look at the fresh market,
we knew going into this year that
Washington state had the biggest crop
that they probably were ever going to
harvest. If we look at fresh movement to
date, Washington state comprises 80%
of all of the movement. We sit here in
cherries, and how the cherry industry
filed an anti-dumping case against
Turkey, and unfortunately lost. I said that
if we could file an anti-dumping case
against Washington state for what they
did to our market, we'd probably have a
pretty strong case. "
Michigan apple shipments were down
22% compared to the previous year,
Drake said.
" We saw our prices in Michigan
decline to 50% or more, and Washington
state growers have seen that, as well, "
Drake said. " They are hurting; we do
know that. It's a matter of what are they
going to do about it now. We had good
conversations with a contact out there. He
said that the Washington state industry
was going to have to have the biggest
market (reduction) that they've ever had,
meaning that they will have to remove at
least 20-25% of their total production out
there in order to be profitable.
Washington state price declines were
55% on Honeycrisp, 13% on Gala and
28% on Fuji, Drake said.
" Because of the situation we're in right
now with trade and everything else, we've
had two trade mitigation rounds take place
for apples, " Drake said. " That has been
primarily focused on exports and also
USDA purchases. What we've seen with
the USDA purchases are all fresh apples
and that's not helping us in the East at all. "
On a recent trip to Washington, D.C.,
Drake said, " we talked about a possible
third round of trade mitigation and
we're really pushing for direct payments
to growers. We had that back in 2008, I
believe. What we were trying to impress
on the USDA - and even some of our
Congressional people - is that you guys
need some help. The USDA purchases
aren't working for us and the exports are
clearly not working either. I don't know
if that's going to happen, but that's what
we're advocating. "
2018 tree fruit survey
The 2028 Census of Agriculture
reported the number of farms producing
apples in Michigan declined from 825 in
2014 to 775 in 2018. Total acres declined
from 35,500 to 34,500. Tree plantings
increased to 14.9 million from 11.3
million in 2014.
Acreage reductions were 10-35%
for Spy, Jonathan, JonaGold, Golden,
Empire, Ida Red, Rome and Macintosh.
There was a large reduction in acreage
for Red Delicious.
" Most new plantings were Fuji,
Honeycrisp and Gala, also including
Washington and New York, so we're going
to have plenty of those three varieties, "
Drake said.
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April 2020

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