PRODUCTION & UTILIZATION ANALYSIS SPONSORED BY

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1 2014 PRODUCTION & UTILIZATION ANALYSIS SPONSORED BY

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3 Table of Contents Introduction Crop: U.S. Production and Utilization Summary U.S. Apple Production: Volume and Value...4 U.S. Utilization...6 U.S. Crop Movement...9 U.S. Exports and Imports Crop: U.S. Production Forecast Crop: U.S. Varietal Analysis Varietal Estimates Crop: U.S. Utilization and Movement Forecasts Processing vs. Fresh Market Utilization Forecasts Crop Movement Forecast...23 International Market Outlook U.S. Trade Recap U.S. Trade Outlook...27 European Crop Outlook...29 Canadian Crop Outlook...32 U.S. Apple Imports and Exports...34 Appendix A: Apple Juice Concentrate Prices The Production and Utilization Analysis for the 2014 U.S. Apple Association Apple Crop Outlook and Marketing Conference is published by the U.S. Apple Association (USApple). Reproduction in whole or in part of the material contained herein is prohibited without prior permission from USApple. For more information, contact USApple at 8233 Old Courthouse Road, Suite 200, Vienna, Virginia , telephone or , facsimile , web site

4 Tables and Figures Table 1: Historical U.S. Apple Annual Production and Five-Year Averages... 5 Table 2: Season-Average Apple Prices Received by U.S. Growers... 6 Table 3: Trends in Average Apple Prices Received by U.S. Growers... 7 Table 4: U.S. Per-Capita Utilization of Apples and Apple Products... 9 Table 5: Comparison of Forecasted 2014 U.S. Apple Crop with 2013 and Five-Year Average Table 6: U.S. Apple Production, By Region Table 7: U.S. Apple Production, By State Table 8: Total U.S. Apple Production, By Variety Table 9: U.S. Apple Production, By Variety, Region Table 10: U.S. Crop Distribution, By Variety Grouping, Region Table 11: U.S. Apple Juice Imports Table 12: Utilization Summary, By U.S. Production Region Table 13: U.S. Processing-Apple Utilization: Volume Table 14: U.S. Processing-Apple Utilization: Value Table 15: U.S. Apple Utilization Summary Table 16: U.S. Utilization, Movement and Storage Holdings Table 17: U.S. Apple Balance of Trade Table 18: Top 20 U.S. Apple Export Markets Table 19: Apple Imports by Country and Year Table 20: European Union Apple Production, By Country Table 21: European Union Apple Production, By Variety Table 22: Other European and Perimeter Countries, By Country Table 23: Canadian Apple Production, By Province Table 24: Canadian Apple Production, By Variety Table 25: USDA Purchases of Apples and Apple Products Figure 1: U.S. Apple Production (line graph)... 8 Figure 2: U.S. Apple Production (bar graph)... 8 Figure 3: Utilization of 2013 U.S. Apple Crop Figure 4: Trends in U.S. Production for Red Delicious and Golden Delicious Figure 5: Trends in Production for Other Top U.S. Varieties Figure 6: Western U.S. Fuji Production Figure 7: U.S. Gala Production Figure 8: U.S. Crop Utilization Figure 9: U.S. Apple Exports Figure 10: U.S. Apple Exports, by Month for Various Crop Years Figure 11: U.S. Apple Imports, by Year Figure 12: U.S. Apple Imports, by Month for Various Crop Years Figure 13: U.S. Fresh Apple Exports as Percent of U.S. Fresh Production Figure 14: U.S. Fresh Apple Imports as Percent of U.S. Fresh Production Appendix A: Monthly Apple Juice Concentrate Prices (Table) Monthly Apple Juice Concentrate Prices (Graph) U.S. Apple Association

5 Introduction The 2014 edition of the U.S. Apple Association (USApple) Production and Utilization Analysis provides an overview of the production and utilization of U.S. apple crops for recent years and forecasts for the 2014 crop marketing season. The source for much of the production information, including the 2014 forecast, is the U.S. Department of Agriculture (USDA). Varietal data and related commentary have been prepared by USApple. Data on the European crop is provided courtesy of the World Apple and Pear Association (WAPA) from Prognosfruit, the European counterpart to USApple s Crop Outlook and Marketing Conference. The utilization information contained in this book is a mixture of USDA-published data and USApple forecasts, based on reports from apple processors and other reporting organizations. USApple is grateful to all who contributed information for this report, including USDA, the World Apple and Pear Association, the Canadian Horticultural Council, the Ontario Ministry of Agriculture and Rural Affairs, the Federation des Producteurs de Pommes du Quebec, the New Brunswick Apple Marketing Board, the Nova Scotia Fruit Growers Association, The Food Institute and Agrarmarkt Informations-GmbH. USApple would also like to express our gratitude to Agnes Perez, USDA Economic Research Service (ERS), for her assistance in gathering and analyzing data on processed apple products, as well as to Katy Looft, Agricultural Economist with USDA s Agricultural Marketing Service (AMS) Fruit and Vegetable Division for her work on the Apple Compendium. Finally, USApple would like to thank Bayer CropScience for their continued support of this important industry publication Production & Utilization Analysis 3

6 2013 Crop: U.S. Production and Utilization Summary Highlights of production and utilization of the 2013 apple crop follow. Tables contained throughout this publication provide detailed information on the 2013 crop, including comparisons to crops from previous 5-year and 10-year periods. U.S. Apple Production: Volume and Value The 2013 crop, at million bushels, was the thirteenth largest apple crop since the U.S. Department of Agriculture (USDA) has recorded statistics on commercial apple production. The record crop of million bushels was produced in Historical crop data are found in Table 1, and Figures 1 and 2. Apple production in Washington State of million bushels in 2013 was 8 percent below the million bushels produced in 2012 and 4 percent above the average production of million bushels for the previous five years (see Table 7). In California, production of 6.4 million bushels in 2013 was the same as the state s 2012 production, and 1 percent below the five-year average for production in the state. Michigan 2013 apple production was 30.0 million bushels, 996 percent more than the frost damaged 2012 production and 55 percent above the five-year average of 19.4 million bushels. In New York, production of 24.3 million bushels in 2013 was 42 percent greater than production in 2012 and 9 percent below the five-year average for production. Pennsylvania 2013 apple production of 11.2 million bushels was 5 percent below 2012 and 3 percent below the five-year average. Production in the West, at 154 million bushels, accounted for 64 percent of total national production in 2013, and was 4 percent above the five-year average for the region. The crop in the rest of the country, at 85 million bushels, accounted for 36 percent of the total crop in 2013, and was 9 percent above the five-year average. Tables 5 and 6 detail regional production, by year, and include comparisons to the five-year average. Fresh-market varieties represented 77 percent of the apples harvested from the 2013 national crop (see Table 10). The 77 percent share is 7 percent less than that of 2012 when frost damaged the Eastern U.S. crop, which typically has a higher proportion of processing apples. In 2011, fresh varieties made up 77 percent of the crop, 1 percent below the share they held in Production of dual-purpose varieties increased from 8 percent of total production in 2012 to a 13 percent share in Production of Red Delicious apples increased by 9 percent to 57.8 million bushels from 2012 to The 2013 Golden Delicious crop, at 23.1 million bushels was 1 percent lower than the 23.3 million bushels produced in 2012 (see Table 8) Crop Value USDA figures on grower level prices for 2013 indicate that the season-average price to growers for all sales was 31.1 cents per pound, a six cent decrease from the average price of 37.1 cents per pound in 2012, and 3 percent above the 30.3 cents per pound average of 2011 (see Table 2). 4 U.S. Apple Association

7 Table 1: Historical U.S. Apple Production and Five-Year Averages ( lb. Units) YEAR PRODUCTION YEAR PRODUCTION YEAR PRODUCTION , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , F 259,248 FIVE-YEAR AVERAGES , , , , , , , , , , , , , , ,537 TOP TEN APPLE PRODUCTION YEARS YEAR PRODUCTION YEAR PRODUCTION , , , , F 259, , , , , ,586 Source: USDA, National Agricultural Statistics Service, Noncitrus Fruits and Nuts Summary, various years and Crop Production, Aug. 12, 2014 F=Forecast 2014 Production & Utilization Analysis 5

8 2013 Crop: U.S. Production and Utilization Summary The season-average price for fresh-market apples was 40.9 cents per pound in 2013, 10 percent below the 45.3 cents per pound average of 2012, and 4 percent higher than the 2011 average price of 39.4 cents per pound. At $200 per ton, the average value of processing apples in 2013 was 29 percent less than the $281 per ton value in 2012, and 12 percent lower than the 2011 price of $226 per ton. The average juice-apple price of $151 per ton in 2013 was down 32 percent from the 2012 average of $221 per ton and 24 percent below that of 2011 when average juice-apple prices were $198 per ton. Total farm-gate revenue of $3.10 billion in 2013 was 6 percent lower than 2012 when total revenue was $3.31 billion. The total value of fresh apple production decreased by 7 percent to $2.78 billion in 2013 from a value of $2.98 billion in The value of processing apple production decreased by 3 percent from $327 million in 2012 to $317 million in Table 2 includes season-average apple prices received by U.S. growers from 2010 through 2013, while Table 3 includes historical data on prices for various uses. U.S. Utilization USDA s preliminary estimate for total U.S. per-capita utilization of apples and apple products in 2013 was 45.4 pounds; 2 pounds per person more than in 2012 (see Table 4). The total amount of apples processed in 2013 was 75.5 million bushels, compared to 55.5 million bushels in 2012, and 72.3 million bushels in 2011 (see Table 13). Table 12 provides a summary of how the crop was utilized by production region. Processors converted 31.5 percent of the 2013 crop into apple products, which was 5.5 percent above the 26 percent converted in 2012 and just one-half of one percent less than the 32 percent of 2011 (see Table 16). The percent of the crop sold as fresh-market apples in the domestic market decreased slightly to 49.2 percent in 2013 from 51.5 percent in Fresh exports in 2013 were 18.5 percent of total production, less than the 21.9 percent in 2012 and roughly 1 percent below the 20 percent in Table 2: Season-Average Apple Prices Received by U.S. Growers, Crop Years All sales (cents per pound) Fresh consumption (cents per pound) All processing (dollars per ton) Canned (dollars per ton) Juice and cider (dollars per ton) Frozen (dollars per ton) Dried (dollars per ton) Fresh slices (dollars per ton) Other (dollars per ton) Value of Fresh Production (000) $2,037,047 $2,482,031 $2,980,250 $2,781,058 Value of Processing Production (000) $276,541 $341,370 $327,385 $316,902 Total Farm-Gate Value of Production 1 (000) $2,313,588 $2,823,401 $3,307,635 $3,097,960 Source: USDA, National Agricultural Statistics Service, Noncitrus Fruits and Nuts Summary, various years. 1 Total revenue to growers from fresh and processing sales. 6 U.S. Apple Association

9 Table 3: Trends in Average Apple Prices Received by U.S. Growers, According to Type of Utilization ALL SALES (cents per pound) FRESH (cents per pound) Source: USDA, National Agricultural Statistics Service, Noncitrus Fruits and Nuts Summary, various years. Note: The 5-year average is based on the current year and the previous four years. ALL PROCESSING (dollars per ton) YEAR ANNUAL 5-YR AVG ANNUAL 5-YR AVG ANNUAL 5-YR AVG PROCESSING UTILIZATION (all in dollars per ton) CANNED JUICE AND CIDER FROZEN DRIED YEAR ANNUAL 5-YR AVG ANNUAL 5-YR AVG ANNUAL 5-YR AVG ANNUAL 5-YR AVG Production & Utilization Analysis 7

10 2013 Crop: U.S. Production and Utilization Summary The portion of the crop that was used in canned products was 11 percent in 2013, which was 3 percent higher than the 8 percent in The portion of the crop used in juice and cider increased from 12 percent in 2012 to 14 percent in 2013 (see Table 15). The portion of the crop used in frozen products increased from 1 percent in 2012 to 2 percent in Figure 3 depicts percentages of how the 2013 crop was utilized. Figure 1: U.S. Apple Production, , (F) 259, , , , , lb. Bushels (000) Source: USDA. Figure 2: U.S. Apple Production, , , , lb. Units 230, , , , , , , , , F 5-YEAR Source: USDA F = Forecast 8 U.S. Apple Association

11 U.S. Crop Movement Thirty - eight percent of the 2013 crop was moved prior to December 1, 2013, with 32.3 million bushels being processed, and 40.0 million bushels used in the domestic fresh market during this period (see Table 16). The supply of apples in storage on Dec. 1, 2013 was million bushels, of which 84 percent was in long-term controlled atmosphere storage. U.S. Exports and Imports Exports of U.S. apples from the 2013 crop decreased by 6 percent to 44.2 million bushels from the 2012 crop (see Table 18). The decrease in exports resulted from lower volumes of exports to Mexico, Canada, Taiwan, India, Indonesia and Hong Kong, but there were increases in volumes to Vietnam and the United Arab Emirates. The top three destinations for U.S. apple exports and their percentage of total exports were Mexico at 27 percent, Canada at 16 percent and Taiwan at 7 percent. Fresh-market apple imports increased to approximately 11 million 42-pound cartons in 2013 from 10.6 million 42-pound cartons in 2012 (see Table 19). Chile was the largest source of fresh apple imports, accounting for 63 percent of total imports. New Zealand and Canada followed, capturing approximately 22 percent and 11 percent of total imports, respectively. The yearly balance of trade for fresh apples and equivalent trade in juice apples is illustrated in Table 17. Table 4: Per-Capita Utilization of Apples and Apple Products (Pounds, Fresh Weight Equivalent) SEASON FRESH CANNED JUICE FROZEN DRIED OTHER TOTAL 2003/ / / / / / / / / / /14 F Source: USDA Economic Research Service, Crops Branch Per-capita numbers approximate the trend and general level of consumption over time. Annual consumption estimates do not reflect changes in stocks. Therefore, the numbers do not reflect actual year-to-year changes in consumption. Per capita figures are adjusted for imports and exports, and include shipments to territories. F =Forecast by USDA Economic Research Service Crops Branch Other includes vinegar, wine, slices for pie making and,fresh slices Production & Utilization Analysis 9

12 2013 Crop: U.S. Production and Utilization Summary The 2013 estimate of 480 million gallons single-strength equivalent for U.S. apple juice imports represents a 6 percent decrease from 508 million gallons imported in Table 11 shows imports of apple juice on a singlestrength equivalent basis and on a bushel-equivalent basis. Figure 3: Utilization of 2013 U.S. Apple Crop Fresh Slices 2.0% Frozen 2.1% Dried 1.7% Other Products 0.6% Juice 13.9% 67.6% Fresh Total Canned 11.2% Not Marketed 0.8% Source: USDA, National Agricultural Statistics Service. 10 U.S. Apple Association

13 2014 Crop: U.S. Production Forecast On August 12, 2014, the U.S. Department of Agriculture (USDA) forecast the 2014 U.S. apple crop at 10.9 billion pounds. Measured in 42-pound bushels, the crop is forecast to be million bushels. This is 20 million bushels more than 2013 production in the U.S. and 33 million bushels above the average U.S. production for the past five years of million bushels. Production for 2014 in the East is forecast to increase by 7 percent but is expected to decline by 12 percent in the Midwest while the Western forecast projects an increase of 13 percent compared to In the East, the 2014 crop is forecast at 54.4 million bushels, up 7 percent from 2013 and 2 percent above the five-year average. The 2014 New York crop, at 29.8 million bushels, is forecast to be 23 percent greater than 2013, and 12 percent above the five-year average. The Appalachian region (Maryland, Pennsylvania, Virginia and West Virginia) 2014 production is forecast at 18.3 million bushels, down 3 percent from The New England (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont) crop is forecast to decrease by 15 percent from 3.8 million bushels in 2013 to 3.2 million bushels in 2014, and production in the Southeast is expected to decrease from the 2013 crop in that area. See Tables 5 and 6 for regional crop production data. Production from the Midwestern region, forecast at 30.3 million bushels, is forecast to be down 12 percent from the 2013 production of 34.4 million bushels but is 23 percent above the five-year average. Michigan s crop is forecast at 26.2 million bushels, 13 percent below last year s crop of 30.0 million bushels, and is 35 percent above the five year average. The combined Eastern and Midwestern crop for 2014 is forecast at 84.8 million bushels, down 1 percent from 2013, and 9 percent above the five-year average. The Western crop is forecast at million bushels, a 13 percent increase from 2013, and is 18 percent above the five-year average. Washington State is forecast to produce million bushels, 14 percent above its 2013 production, and approximately 19 percent more than the average production over the past five years. California production for 2014 is forecast at 6.2 million bushels, 4 percent below the 2013 production and 5 percent below the five-year average for the state. Apple production in Oregon is forecast at 3.8 million bushels, 13 percent greater than the 2013 crop. Idaho is forecast to produce 1.6 million bushels in 2014, a decrease of 6 percent from Arizona is forecast to produce 202,381 bushels in 2014, and Utah is forecast at 500,000 bushels. Arizona s production estimate is a decrease of 48 percent compared to 2013, and Utah s production is expected to increase by 27 percent from See Table 7 for 2014 production forecasts and historical data by state and region Production & Utilization Analysis 11

14 2014 Crop: U.S. Production Forecast Table 5: Comparison of Estimated 2014 U.S. Apple Crop with 2013 and Five-year Average ( lb. Units) 2014 FORECAST COMPARED WITH REGION FORECAST 5-YEAR AVERAGE YEAR AVERAGE East 50,845 54,426 53,327 7% 2% Midwest 34,395 30,348 24,695-12% 23% Total East and Midwest 85,240 84,774 78,022-1% 9% West 154, , ,903 13% 18% Total United States 239, , ,925 8% 15% Source: USDA, National Agricultural Statistics Service, and Noncitrus Fruits and Nuts Summary, various years and Crop Production, Aug. 12, 2014 Note: Columns may not add due to rounding. Table 6: U.S. Apple Production By Region ( lb. Units) YEAR AVERAGE 2014 FORECAST Eastern States 61,569 57,074 55,345 41,802 50,845 53,327 54,426 Midwest States 34,274 19,798 28,786 6,224 34,395 24,695 30,348 Total East and Midwest 95,843 76,871 84,131 48,026 85,240 78,022 84,774 Western States 135, , , , , , ,474 United States 231, , , , , , ,248 REGIONAL SHARE OF U.S. PRODUCTION YEAR AVERAGE 2014 FORECAST Eastern States 27% 26% 25% 20% 21% 24% 21% Midwest States 15% 9% 13% 3% 14% 11% 12% Total East and Midwest 41% 35% 37% 22% 36% 35% 33% Western States 59% 65% 63% 78% 64% 65% 67% United States 100% 100% 100% 100% 100% 100% 100% Source: USDA, National Agricultural Statistics Service, Noncitrus Fruits and Nuts Summary, various years and Crop Production, Aug. 12, 2014 Note: Columns may not add due to rounding. 12 U.S. Apple Association

15 Table 7: U.S. Apple Production by State ( lb. Units) STATES FORECAST % CHANGE FROM 2013 New York 32,619 30,238 29,048 17,143 24,286 29, % Pennsylvania 12,143 11,714 10,905 11,762 11,167 11,095-1% Virginia 5,833 4,762 5,238 5,476 4,643 4,286-8% North Carolina 2,857 3,238 3, ,214 2,405-25% West Virginia 1,952 1,524 1,595 2,167 2,262 2,048-9% Vermont % New Jersey 1,024 1, % Massachusetts 1, , % Maine % New Hampshire % Maryland 1,107 1, % Connecticut % Rhode Island % Total East 61,569 57,074 55,345 41,802 50,845 54,426 +7% Michigan 27,381 13,571 23,333 2,738 30,000 26,190-13% Ohio 2,750 1,981 1, ,286 1,190-7% Wisconsin 1, , % Missouri % Illinois 1,095 1, % Indiana % Minnesota % Tennessee % Iowa % Total Midwest 34,274 19,798 28,786 6,224 34,395 30,348-12% Total East and Midwest 95,843 76,871 84,131 48,026 85,240 84,774-1% Washington 123, , , , , , % California 6,310 6,667 6,667 6,429 6,429 6,190-4% Oregon 3,095 2,857 2,202 3,095 3,357 3, % Idaho 1,071 1,429 1,429 1,786 1,714 1,619-6% Arizona % Colorado % Utah % Total West 135, , , , , , % Total U.S. 231, , , , , ,248 +8% Source: USDA, National Agricultural Statistics Service, Noncitrus Fruits and Nuts Summary, various years and USDA Crop Production August 12, Production & Utilization Analysis 13

16 2014 Crop: U.S. Varietal Analysis The mix of varieties of the 2014 U.S. apple crop is as important to the apple market as the overall volume of total U.S. apple production. The relationship between fresh-market and processing varieties and the supply of certain fresh-market varieties plays an important role in determining market conditions. In 1981, the U.S. Department of Agriculture (USDA) discontinued its varietal estimate of the national apple crop. Since then, the U.S. Apple Association (USApple) has provided that service to the apple industry. USApple bases its varietal estimate on the total crop forecast provided by USDA. The estimate is calculated from input received from various regional producer organizations, consultations with regional production experts and varietal data collected from storage facilities Regional and Varietal Estimates Under ideal circumstances, the U.S. varietal mix is reasonably distributed across producing regions, and varietal supplies are sufficient to support fresh-market and processing-apple demand for any particular variety. USApple bases its varietal estimate on the total crop forecast provided by USDA. The estimate is calculated from input received from various regional producer organizations, consultations with regional production experts, and varietal data from storage reports submitted to USApple. Total Western production is forecast to increase 13 percent from 2013 and will be 18 percent above the five-year average for that region. While the larger 2014 crop will likely result in higher actual volumes, the Figure 4: Trends in U.S. Production for Red Delicious and Golden Delicious 70,000 n Red Delicious n Golden Delicious 60,000 50, lb. Units 40,000 30,000 20,000 10, F Source: U.S. Apple Association. F = Forecast. 14 U.S. Apple Association

17 percentage production of Red Delicious in Washington State relative to other varieties is expected to continue to decrease, while other varieties such as Gala, Cripps Pink and Honeycrisp will continue to increase their share of overall production. The production volume for Gala is expected to increase by 14 percent, while Fuji volume is projected to increase by 28 percent. See Table 6 for USApple s varietal forecast and Table 7 for variety forecasts by growing region. Fresh market varieties are forecast to comprise approximately 79 percent of the U.S. crop in In 2013 and 2012, fresh-market varieties accounted for 77 and 84 percent of the crop respectively. Dual-purpose varieties will make up 35 percent of the Eastern crop and 35 percent of the Midwestern crop, and will comprise 11 percent of overall U.S. production in 2014 (see Table 8). The varietal picture has changed over the past five years and will continue to change in Red Delicious still leads varietal production nationally, while Gala holds the second place ranking for 2014, as it has since Golden Delicious remains in third place since losing the second place position to Gala in Table 8: Total U.S. Apple Production by Variety ( lb. Units) VARIETIES FORECAST Red Delicious 59,031 54,566 54,942 53,089 57,829 58,914 Gala 30,020 32,742 32,854 36,264 37,546 42,687 Golden Delicious 25,126 23,498 25,107 23,271 23,137 25,554 Fuji * 17,707 20,421 19,853 24,209 20,231 25,808 Granny Smith * 18,268 18,953 18,548 22,808 22,993 23,277 Honeycrisp 4,309 5,180 5,763 7,630 9,012 12,939 McIntosh 11,181 9,489 10,617 6,247 9,658 10,334 Rome 9,844 8,243 8,555 5,325 8,300 7,910 Cripps Pink * 3,601 3,812 3,716 4,587 5,202 5,350 York 4,412 4,007 3,910 4,214 3,910 3,803 Braeburn * 4,002 4,062 3,945 2,695 2,526 2,902 Empire 7,197 6,011 6,366 3,215 5,615 6,099 Jonathan 3,923 2,596 3,208 1,197 3,446 3,045 Idared 4,890 3,528 4,178 1,508 4,306 4,359 Cameo * 1,349 1,151 1,121 1, ,007 Cortland 2,629 2,293 3,172 1,813 2,356 2,477 Stayman 1,169 1,083 1, , Jonagold * 1,247 1,317 1,280 1,507 1,162 1,401 Northern Spy 1,876 1,120 1, ,394 1,207 All Others 19,288 16,743 14,694 11,737 18,826 19,231 Total 231, , , , , ,248 Source: U.S. Apple Association. * Includes only Western production. Eastern and Midwest production is included in other varieties. Note: Braeburn, Cameo, Cripps Pink and Jonagold added in 2007, and Honeycrisp added in 2012, were previously included in all others. Note: Sum of varieties may not add to total due to rounding of individual varieties Production & Utilization Analysis 15

18 2014 Crop: U.S. Varietal Analysis Table 9: U.S. Apple Production, By Variety, Region ( lb. Units) VARIETY AREA FORECAST Red Delicious East 7,984 7,358 7,268 5,703 6,795 7,022 Midwest 7,323 4,120 5,770 1,224 6,607 5,716 West 43,725 43,088 41,904 46,162 44,427 46,176 Total 59,031 54,566 54,942 53,089 57,829 58,914 Gala East 2,195 2,446 2,564 2,134 2,569 2,874 Midwest 2,393 1,383 2, ,701 2,927 West 25,432 28,912 28,146 33,725 32,276 36,887 Total 30,020 32,742 32,854 36,264 37,546 42,687 Golden Delicious East 7,107 6,650 7,671 6,245 7,221 7,378 Midwest 4,707 2,795 3, ,227 3,684 West 13,312 14,053 13,655 16,103 11,688 14,492 Total 25,126 23,498 25,107 23,271 23,137 25,554 Granny Smith West/Total 18,268 18,953 18,548 22,808 22,993 23,277 Fuji West/Total 17,707 20,421 19,853 24,209 20,231 25,808 McIntosh East 9,000 8,225 8,773 5,768 7,483 8,186 Midwest 2,181 1,264 1, ,174 2,148 Total 11,181 9,489 10,617 6,247 9,658 10,334 Rome East 6,970 6,586 6,430 4,596 5,898 5,863 Midwest 2,482 1,313 1, ,034 1,684 West Total 9,844 8,243 8,555 5,325 8,300 7,910 Empire East 5,495 5,079 4,904 2,933 3,943 4,677 Midwest 1, , ,672 1,422 Total 7,197 6,011 6,366 3,215 5,615 6,099 Cripps Pink West/Total 3,601 3,812 3,716 4,587 5,202 5,350 Braeburn West/Total 4,002 4,062 3,945 2,695 2,526 2,902 Idared East 2,528 2,338 2,249 1,256 1,918 2,299 Midwest 2,362 1,189 1, ,387 2,060 Total 4,890 3,528 4,178 1,508 4,306 4,359 York East/Total 4,412 4,007 3,910 4,214 3,910 3,803 Jonathan East Midwest 3,499 2,178 2, ,124 2,725 West Total 3,923 2,596 3,208 1,197 3,446 3,045 Cortland East 2,280 2,099 2,888 1,766 2,004 2,194 Midwest Total 2,629 2,293 3,172 1,813 2,356 2,477 Jonagold West/Total 1,247 1,317 1,280 1,507 1,162 1,401 Cameo West/Total 1,349 1,151 1,121 1, ,007 Stayman East 1, Midwest Total 1,169 1,083 1, , Honeycrisp East 760 1,055 1,327 1,146 1,647 2,084 Midwest 1, , ,715 1,606 West 2,325 3,450 3,363 6,254 5,650 9,248 Total 4,309 5,180 5,763 7,630 9,012 12,939 Northern Spy East Midwest 1, , ,265 1,052 Total 1,876 1,120 1, ,394 1,207 All Others East 11,002 9,527 5,798 4,685 6,211 6,834 Midwest 4,515 2,777 4, ,054 4,964 West 3,772 4,440 4,299 6,060 6,561 7,433 Total 19,288 16,743 14,694 11,737 18,826 19,231 Total U.S. 231, , , , , ,248 Source: USDA Crop Production, various years and USApple Note: Sum of varieties may not add to total due to rounding of individual varieties. Includes a benchmark adjustment in variety calculation. 16 U.S. Apple Association

19 USApple estimates that total Red Delicious production in 2014 will increase to 58.9 million bushels compared to production of 57.8 million bushels in 2013 (see Figure 4). Red Delicious production volume is expected to increase by 4 percent in the West compared to In the Midwest, Red Delicious production is forecast to be 13 percent below the crop of Production in the East is expected to increase by 3 percent in Nationally, Gala production in 2014 is forecast at 42.7 million bushels, which is up 14 percent from the 2013 crop Gala production is expected to increase by 12 percent in the East and is expected to increase by Table 10: U.S. Crop Distribution, By Variety Grouping, Region ( lb. Units) AMOUNT % AMOUNT % AMOUNT % AMOUNT % AMOUNT % FRESH¹ East 24, % 24, % 17, % 22, % 24, % Midwest 8, % 12, % 2, % 14, % 13, % West 139, % 135, % 159, % 147, % 166, % Total Fresh 171, % 172, % 179, % 184, % 205, % DUAL PURPOSE² East 18, % 20, % 14, % 18, % 18, % Midwest 7, % 10, % 2, % 12, % 10, % West % % % % % Total Dual 27, % 31, % 17, % 30, % 29, % PROCESSING³ East 4, % 4, % 4, % 4, % 3, % Midwest % 1, % % 1, % 1, % West N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Total Processing 5, % 5, % 4, % 5, % 5, % ALL OTHER 4 East 9, % 5, % 4, % 6, % 6, % Midwest 2, % 4, % % 6, % 4, % West 4, % 4, % 6, % 6, % 7, % Total Other 16, % 14, % 11, % 18, % 19, % Total 220, , , , ,248 Source: U.S. Apple Association. ¹ Braeburn, Cameo, Cripps Pink, Empire, Fuji, Gala, Golden Delicious (West), Granny Smith, Honeycrisp, Jonagold, Jonathan (West), McIntosh, Red Delicious and Winesap. ² Cortland, Idared, Jonathan (East and Midwest), Golden Delicious (East and Midwest), Rome, and Stayman. Processing apple varieties represent an insignificant portion of Western production. ³ East and Midwest: Northern Spy, R. I. Greening and York; West: No significant processing apple variety production. 4 These are mostly dual-purpose and processing varieties. Note: Percent for East, Midwest and West refers to percent of total crop in the respective areas. Percent for Total refers to the percent of the total national crop Production & Utilization Analysis 17

20 2014 Crop: U.S. Varietal Analysis 8 percent in the Midwest. Production in the West is forecast to increase by 14 percent. See Figure 7 for an analysis of Gala production. In 2014 Golden Delicious production is estimated to increase by 24 percent in the West, but to decrease by 13 percent in the Midwest and to increase by 2 percent in the East compared to 2013 production. Nationally, 2014 Golden Delicious production volume is expected to increase 10 percent compared to 2013 (see Figure 4). Together, Red Delicious, Gala, and Golden Delicious are expected to make up 49 percent of total U.S. apple production in 2014, approximately 1 percent less than the share of U.S. production that the three varieties comprised in Fuji production in the West is expected to increase by 28 percent as compared to See Figure 6 for an analysis of Western U.S. Fuji production. Production of Granny Smith is forecast to increase 1 percent as compared to McIntosh volume is expected to increase by 9 percent in the East and decrease by 1 percent in the Midwest in 2014 from 2013 production levels. Nationally, McIntosh production in 2014 is forecast to increase by 7 percent compared to production in See Figure 5, Table 6 and Table 7 for historical comparisons of varietal production. Figure 5: Trends in Production for Other Top U.S. Varieties 45,000 40,000 n Fuji n Granny Smith n Honeycrisp n Gala n McIntosh 35, lb. Units 30,000 25,000 20,000 15,000 10,000 5, F Source: U.S. Apple Association. F = Forecast. 18 U.S. Apple Association

21 Figure 6: Western U.S. Fuji Production ( lb. Units) 42 - lb. Bushels (000) 30,000 25,000 20,000 15,000 10,000 20,421 19,853 24,209 20,231 25,808 5, F Source: U.S. Apple Association. F = Forecast. Figure 7: U.S. Gala Production ( lb. Units) 42 - lb. Bushels (000) 50,000 40,000 30,000 20,000 32,742 32,854 36,264 37,546 42,687 10, F Source: U.S. Apple Association. F = Forecast Production & Utilization Analysis 19

22 2014 Crop: U.S. Utilization and Movement Forecasts The following forecast of the expected 2014 crop processing apple utilization is based on U.S. Department of Agriculture (USDA) data on the utilization of apples in various processed apple products and through information USApple has gathered from apple processing firms. Total Canned Apple Products Canned apple products are expected to use 27.4 million bushels of raw product in 2014 (see Table 13). Utilization at this level would be 2 percent greater than in Apple Juice Concentrate After increasing steadily in the mid-1980s, imports of single-strength-equivalent apple juice varied from yearto-year in the 1990s. Imports then grew dramatically during the first decade of the twenty-first century. Table 11 illustrates import levels of single-strength-equivalent apple juice over the past five years; import data has also been converted to show the equivalent in bushels of apples and is compared to utilization of domestically-produced apples for juice processing. In 2013, imports of single-strength apple juice equivalents were 5 percent below 2012 import levels. At the 2013 level, imported bushel equivalents represented 80 percent of the total amount of apples used to process apple juice in the United States. Historical prices for apple juice concentrate are included in Appendix A. Table 11: U.S. Apple Juice Imports (000) 2008/ / / / /14 (F) Imported Gallons: Single-Strength Equivalent¹ 541, , , , ,000 F Imported Gallons Converted to: Bushel Equivalents¹ Domestic Production in Gallons: Single Strength Equivalent¹ 150, , , , , , , ,667 92, ,433 F Domestic Bushels Used for Juice 32,252 29,269 28,041 25,815 32,433 Total Bushel Equivalents Used for Juice (Domestic + Imported) 182, , , , ,137 Imported Bushel Equivalents as Percent of Total 82% 85% 82% 85% 80% Source: USDA, Economic Research Service, Crops Branch ¹ Based on a marketing year of August through July. The volume shown as bushel equivalents is based on a conversion rate of 3.59 gallons of single-strength juice per 42-lb. unit. One bushel is equivalent to 42 lbs. F = Forecast by Economic Research Service 20 U.S. Apple Association

23 The volume of raw product to be utilized for juice processing from the 2014 crop is forecast at 166 million bushels. This level of juice-apple utilization would represent 44 percent of the total processing volume, equal to the 44 percent utilization rate in Frozen Apple Products Frozen apple utilization from the 2014 crop is forecast at 4.7 million bushels, which is 9 percent lower than 2013 utilization. USApple estimates that 6 percent of total processed apples will go to frozen product, which is less than 1 percent lower than last year. Dried Apple Products In 2014, the dried category is forecast to utilize 4.8 million bushels, 18 percent greater than the amount utilized in USApple estimates that approximately 6 percent of total processed apples will go to dried products, down from 10 percent in Fresh Apple Slices USDA began tracking the utilization of processed fresh apple slices in This category used 4.8 million bushels in 2013, and USApple estimates use in 2014 to be 4.5 million bushels. Figure 8: U.S. Crop Utilization (Percentage) n Fresh n Processing 80% 70% 67% 68% 68% 74% 68% 70% 60% 50% 40% 30% 33% 32% 32% 26% 32% 30% 20% 10% 0% F Source: USDA, National Agricultural Statistics Service. Note: Based on utilized production. F = Forecast USApple Association Production & Utilization Analysis 21

24 2014 Crop: U.S. Utilization and Movement Forecasts Table 12: Utilization Summary, By U.S. Production Region ( lb. Units) REGIONS FRESH PROCESSED NOT MARKETED TOTAL EASTERN STATES ,095 32,810 1,607 61, ,833 30,107 1,071 57, ,560 30,476 1,250 55, ,279 14, , ,074 14,179 1,164 26, Forecast 24,865 27,992 1,510 54,367 MIDWESTERN STATES ,207 15,043 4,071 32, ,986 9, , ,664 15, , ,531 2, , ,710 19, , Forecast 12,616 15,067 1,427 29,110 TOTAL EAST AND MIDWEST ,302 47,852 5,679 93, ,819 39,493 1,538 74, ,224 46,124 1,914 82, ,810 17,181 1,226 40, ,783 33,252 1,671 59, Forecast 37,481 43,059 2,937 83,476 WESTERN STATES ,438 26, , ,555 29, , ,464 25, , ,871 27, , ,524 27, , Forecast 141,428 32, ,474 OTHER STATES , , , , , , ,105 10, , ,524 14, , Forecast ,298 TOTAL UNITED STATES ,331 74,743 5, , ,924 69,195 1, , ,050 71,807 2, , ,786 55,514 1, , ,831 75,476 2, , Forecast 179,699 76,330 3, ,248 Source: USDA, National Agricultural Statistics Service, Noncitrus Fruit and Nuts Summary, various years; US Apple Association forecast. Note: Other states include IL, IA, MN, RI, and TN. Sum of column and row may not equal total due to rounding. 22 U.S. Apple Association

25 Other Processed Apple Products Utilization of apples in this category is forecast at 1.6 million bushels in 2014, about 14 percent higher than the amount used in Information on USDA purchases of apples and apple products for use by schools and low-income feeding programs can be found in Table 25. Processing vs. Fresh-Market Forecasts USDA forecasts the 2014 U.S. apple crop at million bushels. Based on this forecast, USApple estimates that approximately million bushels will be sold as fresh-market apples, 76.4 million bushels are forecast to be processed, and approximately 3.2 million bushels will not be marketed. Utilization by production region is found in Table 12. Comparisons of apple-crop processing utilization volume and value are found in Tables 13 and 14 respectively; overall utilization is summarized in Table 15. Fresh-market apple utilization in 2014 is expected to increase by 11 percent as compared to The fresh-versus-processing ratio of crop utilization for the 2014 crop is forecast to be 69 percent fresh and 29 percent processing, with 1 percent of the crop not marketed. In 2013, 68 percent was sold in the fresh market, 32 percent was used for processed products, and a small amount, less than 1 percent, was not marketed. Figure 8 presents the historic utilization breakdown graphically. Table 12 includes a regional breakdown of the crop into fresh-market and processed product destinations. Utilization of the processing portion of the crop estimated for 2014 and for the previous five years is shown in Table Crop Movement Forecast USApple estimates that movement of the 2014 crop prior to Dec. 1, 2014 will be 109 million bushels. Of this, 34 percent will go to processing, 45 percent to the fresh domestic market and 18 percent to fresh exports. Table 13: U.S. Processing-Apple Utilization: Volume ( lb. units) FORECAST 2014 Canned¹ 27,576 25,793 26,755 17,831 26,764 27,424 Juice 33,081 30,021 28,771 26,479 33,267 33,339 Dried 3,838 4,179 4,369 5,310 4,071 4,786 Frozen 5,624 4,310 4,536 1,586 5,100 4,652 Fresh Slices 3,307 3,248 5,676 3,045 4,845 4,542 Other Products 1,317 1,645 1,690 1,257 1,412 1,610 Total 74,743 69,195 72,274 55,507 75,460 76,352 Source: USDA, National Agricultural Statistics Service, Noncitrus Fruits and Nuts Summary, various years. 1 Canned apple products include apple sauce and canned slices. Note: Sum of processing utilization categories may not add due to rounding Production & Utilization Analysis 23

26 2014 Crop: U.S. Utilization and Movement Forecasts Table 14: U.S. Processing-Apple Utilization: Value ($000) Total Canned $93,235 $112,122 $129,242 $147,908 $127,023 Juice $63,843 $93,937 $125,283 $122,887 $105,489 Dried $4,272 $12,548 $17,192 $19,624 $17,100 Frozen $29,879 $17,648 $32,321 $10,922 $25,704 Fresh Slices $22,571 $25,643 $26,434 $19,313 $32,458 Other Products $4,507 $8,292 $7,313 $6,574 $9,132 TOTAL 1 $218,307 $270,190 $337,786 $327,228 $316,906 Source: USDA, National Agricultural Statistics Service, Noncitrus Fruits and Nuts Summary, various years. ¹ Sum of categories may not equal total due to rounding. Table 15: U.S. Apple Utilization Summary ( lb. Units) 2009/ / / / /14 FORECAST 2014/15 Fresh Production 150, , , , , ,699 Fresh Imports¹ 8,855 8,484 8,042 10,572 11,022 9,883 Imports as % of Fresh 6% 6% 5% 7% 7% 6% Fresh Exports¹ 41,095 43,472 44,055 46,747 44,157 48,519 Exports as % of Fresh 27% 29% 29% 30% 27% 27% Not Marketed 5,995 1,871 2,548 1,536 2,019 3,218 Total Processed² 74,743 69,195 71,807 55,514 75,460 76,352 Canned 27,576 25,793 26,755 17,831 26,764 27,424 Juice 33,081 30,021 28,771 26,479 33,267 33,339 Dried 3,838 4,179 4,369 5,310 4,071 4,786 Frozen 5,624 4,310 4,536 1,586 5,100 4,652 Fresh Slices 3,307 3,248 5,676 3,045 4,845 4,542 Other 1,317 1,645 1,690 1,257 1,412 1,610 Total Production 231, , , , , ,248 Source: USDA, National Agricultural Statistics Service, USApple, Noncitrus Fruits and Nuts Summary, various years - and Foreign Agricultural Service Global Agricultural Trade System (GATS) ¹ Based on a marketing year of July through June. ² Sum of categories may not equal total due to rounding. 24 U.S. Apple Association

27 On Dec. 1, 2014, holdings of 2014 crop apples remaining in storage are forecast to be million bushels, representing 58 percent of the total crop. About 79 percent of these holdings would be in controlled-atmosphere storage. General utilization, movement and storage data are presented in Table 16. Table 16: U.S. Utilization, Movement and Storage Holdings ( lb. Units) FORECAST UTILIZATION QUANTITY % QUANTITY % QUANTITY % QUANTITY % TOTAL UTILIZATION Fresh Exports 44, % 46, % 44, % 48, % Fresh Domestic 105, % 110, % 117, % 131, % Processing 71, % 55, % 75, % 76, % Not Marketed¹ 2, % 1, % 2, % 3, % Total Domestic Production 224, % 213, % 239, % 259, % ESTIMATED FALL MOVEMENT (BEFORE DEC. 1) Fresh Exports 14,046 16,538 16,367 19,599 Fresh Domestic 41,514 37,323 39,982 48,911 Processing 33,872 17,968 32,302 37,021 Not Marketed 2,548 1,536 2,019 3,331 Total 91,979 73,365 90, ,884 ESTIMATED STORAGE MOVEMENT (AFTER DEC. 1) Fresh Exports 29,980 30,171 27,790 32,258 Fresh Domestic 64,481 72,716 77,692 75,270 Processing 37,935 37,546 43,157 25,965 Total 132, , , ,364 MOVEMENT BY TYPE OF STORAGE From C.A. Storage 107, , , ,787 From Regular Storage 24,956 26,907 24,040 31,576 Total Holdings on Dec , , , ,364 Processor holdings 37,935 37,546 43,157 41,642 Fresh Holdings 94, , , ,721 Source: USDA, National Agricultural Statistics Service, Noncitrus Fruits and Nuts Summary and USDA August 12, 2014 Crop Production. ¹ All apples not marketed are assumed to be waste or shrinkage and are accounted for in the fall period (prior to Dec. 1). Note: Totals may not add up due to rounding Production & Utilization Analysis 25

28 International Market Outlook Exports are an important factor in determining overall economic conditions in the apple industry. According to USDA s Global Agricultural Trade System (GATS), fresh exports from the 2013 U.S. apple crop for the July 2013 to June 2014 marketing year totaled 44.2 million bushels, a 6 percent decrease from the 2012 crop and roughly equal to 2011 exports. The value of U.S. fresh-apple exports from the 2013 crop, at $1.04 billion, was down 10 percent from $1.16 billion the previous marketing year. In , the 44.2 million bushels exported represented 27.3 percent of total fresh-market production. Exports forecast at 48.5 million bushels in will represent approximately 27 percent of anticipated fresh production (See Tables 15 and 16). According to USDA data, Mexico was the top-ranked market for U.S. apple exports from the 2013 crop. U.S. exporters shipped approximately 12.1 million bushels of apples to Mexico in , compared to 14.1 million exported to Mexico in Exports to Mexico in represented 27 percent of all U.S. exports. Canada represents the second-largest market for U.S. apple exports. USDA export data indicates that 7.1 million bushels were shipped to Canada from the 2013 crop, as compared to 8.4 million bushels from the 2012 crop. Taiwan is the third-largest export market for U.S. exporters. Exports to Taiwan totaled 3.1 million bushels from the 2013 crop, and 4.0 million bushels from the 2012 crop. Table 17: U.S. Apple Balance of Trade VOLUME OF FRESH (000) 42-lb. Units Imports 8,855 8,484 8,042 10,572 11,022 Exports 41,095 43,472 44,055 46,747 44,157 2 Exports as percent of Fresh Crop 27% 29% 29% 30% 27% Total Trade 49,950 51,955 52,097 57,319 55,179 U.S. Net 32,240 34,988 36,013 36,175 33,135 Exports as percent of total fresh trade 82% 84% 85% 82% 80% Imported Concentrate Converted to Bushels 150, , , , ,705 Equivalent TOTAL U.S. NET 1 (Fresh + Concentrate) -118, ,515-88, , ,570 VALUE OF FRESH ($000) Exports $792,253 $897,542 $987,118 $1,158,119 $1,040,211 2 Imports $150,526 $142,193 $137,958 $197,792 $246,616 U.S. Net $641,727 $755,349 $849,160 $960,327 $793,595 Source: USDA, Foreign Agricultural Service. Exports and imports are based on a marketing year of July through June. ¹ Total U.S. Net = the U.S. net less the bushel equivalent of imported juice and concentrate from Table 11 2 USDA FAS Global Agritural Trade System (GATS) Report Fresh apple exports July 2013-June U.S. Apple Association

29 Table 17 details the historic balance of apple trade. Table 18 lists leading U.S. export markets. Table 19 lists the leading countries from which the United States imports fresh apples. Figure 9 illustrates yearly exports from 2009 to Figure 10 details monthly exports from 2010 to Figure 11 illustrates yearly import totals from 2009 to Figure 12 details monthly imports from 2010 to Figure 13 shows the percentage of the U.S. fresh-market crop that is exported, and Figure 14 illustrates U.S. fresh apple imports as a percentage of fresh production U.S. Trade Outlook Based on a U.S crop forecast of million bushels, USApple expects apple exports from the 2014 crop to increase to 48.5 million bushels. This would be approximately 10 percent more than the 44.2 million bushels exported in Table 18: Top Twenty Apple Export Markets ( lb. Units) CROP YEAR 2013 VALUE COUNTRY (in 000 $) Mexico 11,441 11,029 11,253 14,071 12,093 $263,514 Canada 6,670 6,353 6,193 8,392 7,125 $199,742 Taiwan 2,771 3,036 3,042 3,960 3,106 $78,245 United Arab Emirates 1,459 1,847 1,506 2,011 2,838 $61,618 India 1,904 3,677 4,805 3,077 2,773 $61,627 Indonesia 2,491 3,292 3,075 2,526 1,896 $44,238 Hong Kong 2,379 2,934 2,707 2,301 1,885 $43,393 Vietnam ,665 $46,578 Thailand 865 1,086 1,073 1,047 1,037 $23,730 Saudi Arabia 927 1, ,026 $23,107 Dominican Republic $14,348 Colombia $12,503 Malaysia $15,572 Russia $12,977 United Kingdom 1, $14,303 Guatemala $9,232 Israel $13,420 Costa Rica $8,424 Honduras $8,286 Philippines $7,981 Others 4,116 3,830 3,518 2,976 3,255 $77,373 Total Exports 41,095 43,472 44,055 46,747 44,157 $1,040,211 Source: USDA Global Agricultural Trade System (GATS) and U.S. Department of Commerce. Exports are based on a marketing year of July through June Production & Utilization Analysis 27

30 International Market Outlook Figure 9: U.S. Apple Exports 42 - lb. Bushels (000) 50,000 40,000 30,000 20,000 10,000 41,095 43,472 44,055 46,747 44, Source: USDA Global Agricultural Trade System (GATS) and U.S. Department of Commerce. Figure 10: U.S. Apple Exports by Month for Various Crop Years 42 - lb. Bushels (000) 42 - lb. Bushels (000) 6,000 5,000 4,000 3,000 2,000 1,000 0 Source: USDA Global Agricultural Trade System (GATS) and U.S. Department of Commerce. Figure 11: Apple Imports by year ( lb. units) 12,000 11,000 10,000 9,000 8,000 7,000 6,000 8,855 8,484 n 2013 Crop Year n 2012 Crop Year n 2011 Crop Year n 2010 Crop Year JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN 8, Source: USDA Global Agricultural Trade System (GATS) and U.S. Department of Commerce. 10,572 11, U.S. Apple Association

31 Imports of fresh apples into the United States in are forecast by USApple at 9.9 million 42 lb. cartons, a 10 percent decrease from European Crop Outlook Production in the European Union s apple-growing countries is forecast at 11.9 million metric tons (624 million bushels) for the 2014 season. This information was developed by the World Apple and Pear Association (WAPA) in conjunction with the Prognosfruit Conference in Istanbul, Turkey from August 6-8, The 2014 European forecast is 9 percent greater than 2013, when production was 10.9 million metric tons (573 million bushels). The projected 2014 crop is 13 percent above the five-year average. Apple production for all 28 members of the European Union is reported together. Table 19: Apple Imports by Country and Year ( lb. units) COUNTRY Chile 5,685 5,143 5,033 7,201 6,906 New Zealand 1,989 1,848 1,631 2,044 2,443 Canada 903 1,214 1, ,222 Argentina South Africa Others Total Imports 8,855 8,484 8,042 10,572 11,022 Source: USDA Global Agricultural Trade System (GATS) and U.S. Department of Commerce Imports are based on a marketing year of July through June. Figure 12: Apple Imports by Month for Various Crop Years 3, lb. Bushels (000) 3,000 2,500 2,000 1,500 1, n 2013 n 2012 n 2011 n JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN Source: USDA Global Agricultural Trade System (GATS) and U.S. Department of Commerce Production & Utilization Analysis 29

32 International Market Outlook Among the largest producers, Polish production is forecast to rise by 12 percent from 2013, while Italian production is forecast to increase by 13 percent from the previous year. French production is expected to be down by 6 percent, and German production is forecast to rise by 29 percent in Production in Spain is expected to decline by 4 percent from last year s crop, while production in Hungary is forecast to increase by 33 percent. Apple production in the Netherlands is expected to increase by 11 percent, while Belgian production is expected to rise by 37 percent. In terms of varieties, European production of that region s most prevalent variety, Golden Delicious, is forecast at 2.6 million metric tons (136 million bushels), a 2 percent increase from 2013, and 4 percent greater than the average production over the last five years. Gala, now the second largest variety produced in Europe, is expected to yield 1.3 million metric tons (68 million bushels) in European Gala production is expected to be 7 Table 20: European Union Apple Production, By Country (000 Metric Tons) YEAR CHANGE FROM FORECAST AVERAGE YR AVG. Poland 2,600 1,850 2,500 2,900 3,170 3,540 2, % +36% Italy 2,237 2,179 2,293 1,939 2,122 2,388 2, % +11% France 1,651 1,579 1,701 1,169 1,576 1,487 1,535-6% -3% Germany 1, , % +12% Hungary % +48% Spain % -4% Romania % -26% Netherlands % +0% Portugal % +2% Greece % -8% Belgium % +9% United Kingdom % +11% Austria % +9% Czech Rep % +2% Croatia % -19% Slovenia % +12% Slovakia % +17% Lithuania % -46% Denmark % +13% Sweden % -7% Latvia % +5% TOTAL 11,009 9,739 10,747 10,087 10,911 11,893 10,499 9% 13% Source: WAPA. Note: Sum of country totals may not add to total due to rounding. 30 U.S. Apple Association

33 percent greater than in 2013, and 17 percent above the five-year average. Red Delicious, the fourth most popular European variety, is forecast at 635,000 metric tons (33 million bushels) and is expected to increase by 6 percent from last year but will be 1 percent below the five-year average. Jonagold production, forecast at 562,000 metric tons (29 million bushels), is up 12 percent from last year but 4 percent below the five-year average. Table 20 shows historical European production by country, while Table 21 denotes historical European production by variety. Table 22 shows production in other European and perimeter countries which are not members of the EU. Table 21: European Union Apple Production, By Variety (000 Metric Tons) YEAR CHANGE FROM FORECAST AVERAGE YR AVG. Golden Delicious 2,636 2,413 2,628 2,290 2,530 2,587 2,499 +2% +4% Gala 1, ,137 1,114 1,204 1,294 1,104 +7% +17% Idared ,054 1, % +31% Red Delicious % -1% Jonagold % -4% Shampion % +35% Jonagored % +72% Elstar % +6% Granny Smith % +1% Braeburn % +3% Fuji % +24% Cripps Pink % +31% Gloster % +32% Jonathan % -32% Reinette Grise % +16% Red Jonaprince % +141% Bramley % +1% Boskoop % +22% Pinova % +86% Morgenduft % +30% Annurca % +1% Cox Orange % -49% Lobo % -56% Cortland % -53% Stayman % -7% Spartan % -6% Other 1,652 1,494 1,541 1,364 1,304 1,682 1, % +14% Other New Varieties % +59% TOTAL 11,009 9,742 10,748 10,086 10,912 11,893 10,499 +9% +13% Source: WAPA. Note: Column totals reflect EU production as listed in Table Production & Utilization Analysis 31

34 International Market Outlook Canadian Crop Outlook Total Canadian apple production for the 2014 crop is forecast at 21.6 million bushels, roughly the same as the 2013 crop. Compared to the five-year average, 2014 production is expected to rise by 4 percent. Ontario production is slated to decrease by 6 percent to 9.0 million bushels in 2014, which is 1 percent above the fiveyear average. British Columbia production is expected to increase to 4 million bushels in 2014, up 0 percent from 2013, and 15 percent above the five-year average. Quebec production is forecast at 5.8 million bushels Table 22: Other European and Perimeter Countries Apple Production, By Country (000 Metric Tons) YEAR CHANGE FROM FORECAST AVERAGE YR AVG. China 31,681 33,263 35,985 38,500 37,500 35,000 35,386-7% -1% Turkey 2,518 2,402 2,432 2,445 2,681 2,033 2,496-24% -19% Russia 1,775 1,233 1,500 1,622 1,647 1,716 1,555 4% 10% Ukraine ,126 1,177 1, % 31% Mexico % -35% Moldova % 16% Serbia % 1% Macedonia % -35% Belarus % -11% Switzerland % 6% Bosnia-Herzegovina % -29% TOTAL 38,476 39,233 42,546 44,998 44,528 41,365 41, % -1% Source: WAPA. Note: Sum of country totals may not add to total due to rounding. NC = Change of less than one percent. Table 23: Canadian Apple Production, by Province ( lb. Units) YEAR CHANGE FROM PROVINCE FORECAST AVERAGE YR AVG. Ontario 8,887 9,796 7,622 8,567 9,543 8,960 8,883-6% +1% Quebec 5,176 5,404 5,543 5,786 5,920 5,772 5,566-3% +4% British Columbia 3,056 3,579 4,502 4,439 3,838 4,457 3, % +15% Nova Scotia 2,365 2,350 2,282 2,030 2,120 2,243 2,229 +6% +1% New Brunswick % +6% Total 19,628 21,273 20,122 20,995 21,589 21,602 20,722 +0% +4% Source: The Ontario Ministry of Agriculture and Rural Affairs, Federation des Producteurs de Pommes du Quebec, New Brunswick Apple Marketing Board and Nova Scotia Fruit Growers Association. British Columbia data are adjusted BC Tree Fruit Estimates. 32 U.S. Apple Association

35 in 2014, down 3 percent from 2013, but up 4 percent from the five-year average. Nova Scotia production is estimated at 2.2 million bushels, up 6 percent from 2013, and 1 percent above the five-year average. In New Brunswick, production is expected at 171,000 bushels, up 1 percent from 2013 production, and up 6 percent from the five-year average. Varietal production in Canada is dominated by McIntosh, which makes up approximately 28 percent of total Canadian apple production. The 2014 McIntosh crop in Canada is forecast to decrease by 2 percent over the 2013 crop. Gala, the second-most widely grown variety this year, is up 12 percent from 2013 production levels. Red Delicious, has fallen to seventh place, and production is expected decrease by 1 percent from The Table 24: Canadian Apple Production, By Variety ( lb. Units) British Columbia Ontario Quebec New Brunswick Nova Scotia Canadian Total F F F F F F McIntosh ,755 1,627 3,611 3, ,256 6,115 Gala 1,360 1, ,058 2,300 Spy 0 0 1,690 1, ,990 1,998 Empire 0 0 1,227 1, ,544 1,592 Cortland ,105 1,143 Spartan ,098 1,106 Red Delicious , Honeycrisp Idared Ambrosia Golden Delicious Paula Red Fuji Granny Smith Crispin/Mutsu Jonagold Gravenstein Pink Lady* Braeburn Others ,090 1,039 Juice ,500 1, ,180 2,032 Total 3,838 4,457 9,543 8,960 5,920 5, ,120 2,243 21,589 21,602 Source: The Ontario Ministry of Agriculture and Rural Affairs, Federation des Producteurs de Pommes du Quebec, New Brunswick Apple Marketing Board, and Nova Scotia Fruit Growers Association. British Columbia data are adjusted BC Tree Fruit estimates. Data for all provinces include processing apples in each variety estimate. Note: Columns may not add to total due to rounding. F = Forecast * Pink Lady added in Production & Utilization Analysis 33

36 International Market Outlook forecast for other important varieties in 2014 compared to 2013 follows: Empire up 3 percent, Spartan up 1 percent, Spy steady with 2013, Idared down 11 percent, and Cortland up 3 percent. Table 23 shows historical Canadian apple production by province, and Table 24 shows Canadian apple production by variety. Figure 13: U.S. Fresh Apple Exports as Percent of Fresh Production 30% 27.3% 29.0% 29.4% 29.8% 27.3% 42 - lb. Bushels (000) 25% 20% 23.8% 15% Source: USDA Global Agricultural Trade System (GATS) and U.S. Department of Commerce Marketing year is July through June. Figure 14: U.S. Fresh Apple Imports as Percent of Fresh Production 12.0% 11.0% 10.0% 42 - lb. Bushels (000) 9.0% 8.0% 7.0% 6.0% 5.0% 6.2% 5.9% 5.7% 5.4% 6.7% 6.8% 4.0% 3.0% Source: USDA Global Agricultural Trade System (GATS) and U.S. Department of Commerce Marketing year is July through June. 34 U.S. Apple Association

37 Table 25: USDA Apple Purchases for Various Years TOTAL COST (000 S) COMMODITY TYPE FY 2010 FY 2011 FY 2012 FY 2013 FY 2014* Apple Juice $25,320 $7,704 $14,725 $10,988 $10,836 Applesauce $44,562 $30,957 $22,981 $34,223 $28,862 Kosher Canned Applesauce N/A N/A $145 $125 $98 Apple Slices, Canned $6,491 $4,611 $3,287 $4,696 $3,031 Apple Slices, Frozen $3,669 $1,964 $4,712 $6,388 $3,936 Apples, Fresh $1,755 $1,060 $694 $3,771 $0 Apples Fresh Cut $4,564 $2,110 $725 $0 $0 Fresh for Further Processing N/A N/A $980 $858 $1,198 FY Total* $86,362 $48,406 $48,249 $61,049 $47,961 Source: USDA,Agricultural Marketing Service (AMS) Fruit and Vegetable Division *Fiscal Year from October 1-September 30 FY2014 data represents purchases only to July 1, Production & Utilization Analysis 35

38 Appendix A Monthly Apple-Juice Concentrate Price Ranges, ($US per Gallon 70 Brix) 1999 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC European, Ex-Dock, NY South American, Ex-Dock, NY Chinese, Ex-Dock, NY U.S.A. FOB, Northwest JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC European, Ex-Dock, NY South American, Ex-Dock, NY Chinese, Ex-Dock, NY U.S.A. FOB, Northwest JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC European, Ex-Dock, NY South American, Ex-Dock, NY Chinese, Ex-Dock, NY U.S.A. FOB, Northwest JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC European, Ex-Dock, NY N/A N/A South American, Ex-Dock, NY Chinese, Ex-Dock, NY U.S.A. FOB, Northwest Source: The Food Institute ¹ Apple juice concentrate prices are segregated by country of origin. ² N/A indicates that data is unavailable. 36 U.S. Apple Association

39 Monthly Apple-Juice Concentrate Price Ranges, (cont d) 2003 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC European, Ex-Dock, NY South American, Ex-Dock, NY N/A N/A N/A N/A N/A N/A N/A N/A Chinese, Ex-Dock, NY U.S.A. FOB, Northwest JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC European, Ex-Dock, NY South American, Ex-Dock, NY N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Chinese, Ex-Dock, NY U.S.A. FOB, Northwest JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC European, Ex-Dock, NY South American, Ex-Dock, NY Chinese, Ex-Dock, NY U.S.A. FOB, Northwest JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC European, Ex-Dock, NY 8.25 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A South American, Ex-Dock, NY N/A N/A N/A N/A 6.20 Chinese, Ex-Dock, NY N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A U.S.A. FOB, Northwest Source: The Food Institute ¹ Apple juice concentrate prices are segregated by country of origin. ² N/A indicates that data is unavailable Production & Utilization Analysis 37

40 Appendix A Monthly Apple-Juice Concentrate Price Ranges, (cont d) 2007 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC European, Ex-Dock, NY 7.00 N/A N/A N/A South American, Ex-Dock, NY N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Chinese, Ex-Dock, NY N/A N/A U.S.A. FOB, Northwest N/A JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC European, Ex-Dock, NY N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A South American, Ex-Dock, NY N/A N/A N/A N/A N/A N/A Chinese, Ex-Dock, NY U.S.A. FOB, Northwest N/A N/A N/A N/A N/A N/A N/A N/A 2009 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC European, Ex-Dock, NY N/A N/A N/A N/A N/A N/A South American, Ex-Dock, NY Chinese, Ex-Dock, NY U.S.A. FOB, Northwest N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 2010 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC European, Ex-Dock, NY N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A South American, Ex-Dock, NY 5.25 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Chinese, Ex-Dock, NY N/A U.S.A. FOB, Northwest N/A N/A N/A N/A N/A N/A N/A N/A Source: The Food Institute ¹ Apple juice concentrate prices are segregated by country of origin. ² N/A indicates that data is unavailable. 38 U.S. Apple Association

41 Monthly Apple-Juice Concentrate Price Ranges, (cont d) 2011 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC European, Ex-Dock, NY N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A South American, Ex-Dock, NY N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Chinese, Ex-Dock, NY U.S.A. FOB, Northwest N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 2012 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC European, Ex-Dock, NY N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A South American, Ex-Dock, NY N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Chinese, Ex-Dock, NY U.S.A. FOB, Northwest N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 2013 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC European, Ex-Dock, NY N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A South American, Ex-Dock, NY N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Chinese, Ex-Dock, NY U.S.A. FOB, Northwest N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC European, Ex-Dock, NY N/A N/A N/A N/A N/A 7.85 South American, Ex-Dock, NY N/A N/A N/A N/A N/A N/A Chinese, Ex-Dock, NY U.S.A. FOB, Northwest Source: The Food Institute ¹ Apple juice concentrate prices are segregated by country of origin. ² N/A indicates that data is unavailable Production & Utilization Analysis 39

42 Appendix A Monthly Apple Juice Concentrate Prices, $15.00 $12.00 $9.00 $US per 70 Brix Gallon $6.00 $3.00 JAN 99 APR JUL OCT JAN 00 APR JUL OCT JAN 01 APR JUL OCT JAN 02 APR OCT JAN 03 APR JUL OCT JAN 04 APR JUL OCT JAN 05 APR JUL OCT JAN 06 APR JUL OCT JAN 07 APR JUL OCT JAN 08 APR JUL OCT JAN 09 APR JUL OCT JAN 10 APR JUL OCT JAN 11 APR JUL OCT JAN 12 APR JUL OCT JAN 13 APR JUL OCT JAN 14 APR JUL Source: The Food Institute, Fair Lawn N.J., Bureau of Census. 40 U.S. Apple Association

43 Notes

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