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Large Apple Crop To Turn Prices Downward

Large Apple Crop To Turn Prices Downward
2013 U.S. and Northeast apple crops expected to rebound after 2012 weather-related losses, spelling lower prices as new crop comes out of orchards.

U.S. apple production was approximately 195 million bushels in 2012 – down 14% from 2011 and the smallest crop in more than two decades. Effects of the spring freeze and dry summer were most notable in Michigan and New York State, with eastern production down by more than 30% from 2011.

But there was a good side to that, according to Brad Rickard, Cornell University fruit economics specialist. Demand for fresh fruit raised 2012 prices for the crops that were produced, and trees on last year's lower producing orchards may compensate in 2013.

EASY PICKINGS: Apple production is likely to bounce back this year, significantly impacting prices from mid-year into 2014.

Despite the reduced 2012 crop, industry experts believe there's sufficient stored fruit to supply the market through the first half of 2013, notes Rickard in his 2013 Northeast Ag Outlook report for American Agriculturist. Then look for downward price pressure.

Large crops of perennial fruits are expected in eastern states in 2013. Perennial fruit trees are able to store unused starches in low production years and carry them into the subsequent production cycle in some capacity. If these crop loads aren't properly managed, we could see a record apple crop in New York State and Michigan.

That will place downward pressure on apple prices for crops harvested in 2013 and for fruit stored into 2014. That price pressure would be compounded if Washington State continues to increase production.

A record eastern crop coupled with a normal or expanded crop in western states could have a significant effect on producer prices well into 2014.

Labor reforms a priority issue
Top economic and marketing issues important to apple producers and packers are food safety concerns, labor availability, and availability of crop insurance products as part of the Farm Bill discussions. Of those issues, labor availability remains the top concern.

Farmers managing labor-intensive specialty crops must cope with major risk and uncertainty associated with the perennial challenges of hiring a legally authorized and reliable workforce in an exceptionally challenging, seemingly intransigent immigration policy, regulatory and enforcement environment.

Labor policy reform was a priority topic in the 2012 election. And recently, Congress began a real effort at finding new solutions to this issue that's of paramount interest to fruit growers.

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