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CHICAGO -- While eastern and western apple-growing states are forecasting slight decreases in production, a surge in the Midwest, most notably in Michigan, should result in a 2011 U.S. apple crop that is slightly larger than this past year's.

Information released Aug. 11 by the U.S. Department of Agriculture predicts a national crop totaling 226.471 million bushels, or 42-pound units, for the 2011-12 season. If the estimate is accurate, this will be the nation's 18th largest crop on record.

Members of the apple industry gathered here Aug. 18-19 to discuss the outlook for the 2011 crop as well as the

According to Steve Lutz of the Perishables Group, 'Retailers are telling us through their actions that they want to promote premium product.'
information released by the USDA, which was provided to attendees. The U.S. Apple Association is predicting a slightly larger crop of 227.519 million bushels for the coming season.

Both USDA and USApple estimates anticipate that the 2011 crop will be right on the five-year average, which is a slight increase of 2-3 percent over last year's production of 221.467 million bushels.

On the first day of the conference, region-based groups reviewed the USDA information and determined what, if any, adjustments needed to be made to the figures.

Eastern states lowered the forecast from 56.152 million bushels to 55.119 million bushels of apples. This projects a 3 percent decrease from last year and a total that is 6 percent below the five-year average. Representatives from New York are expecting 30 million bushels, a slight decrease in production from last year's total of 30.238 million. Pennsylvania is expecting to be down over 1 million bushels from last year's total of 11.714 million, which means the state would be 12 percent below its five-year average.

The West is also anticipating a 3 percent drop in production from the 2010 crop totals. Representatives from Washington, the country's most productive apple-producing state, forecast a slightly stronger crop than the USDA had estimated.

Both organizations, however, predicted a decrease greater than 2 million bushels for the 2011 season, leaving the total very close to the five-year average of 129.286 million bushel.

Like many parts of the country, the odd weather in Washington made it challenging to anticipate how the rest of the season will play out. The state's crop is running 10-14 days late, and there is concern that an early freeze could leave apples on the trees.

California's numbers are also down. While the USDA predicted a season consistent with 2010, U.S. Apple is expecting a 10 percent drop to 6 million bushels for the 2011 season. This is due in part to an acreage dip, with older trees having been taken out and replaced with newer trees, which should produce an increase for next year's crop.

The Midwest is expecting the greatest change in production from the 2010 season and is the only region anticipating an increase. This can be attributed primarily to Michigan's dramatic increase from 14 million bushels to the USDA estimate of 25 million bushels or the USApple's forecast of 26.1 million bushels. The 86 percent increase anticipated by the USApple is indicative of the fluctuations that Michigan has experienced during the past four years.

While the 2011 crop is expected to be over 30 percent higher than the state's five-year average, Michigan produced over 27 million bushels of apples in 2009; however, 2008 and 2010 saw totals of 14 million bushels.

Mark Seetin, director of regulatory and industry affairs for USApple, evaluated the accuracy of the 2010 forecasts. The USDA's estimate was within 2 percent of the nation's 221.467-million-bushel yield. However, Mr. Seetin likened the association's 0.04 percent error to "shooting a stinkbug off of an apple from 100 yards away."

The 2010 U.S. apple exports reached a record 42.621 million bushels for a total just under $880 million, topping the previous year's high of 41.09 million bushels. The five largest destinations for U.S. apples are Mexico, which receives 25 percent, followed by Canada, India, Indonesia and Taiwan.

Aside from the weather, which all three regions mentioned as a concern and a wild card for the 2011 crop, there are issues with the industry's workforce.

Julia Rothwell, USApple chairperson, reported on the state of the industry and detailed concerns over labor issues. She cited that "export demand is outstanding," and apples "are on the move in the market." But Ms. Rothwell asked the audience, "Can our workers keep up?"

After repeating the need for a reliable, skilled and legal workforce, Ms. Rothwell expressed the ever-present concern over immigrants and visiting workers being able to consistently show up to work. "This uncertainty is intolerable," she said.

Another point of concern is the transition from the 2010 to the 2011 apple season. Steve Lutz, executive vice president of the Perishables Group, a Chicago-based marketing and consulting firm, discussed the potential issue during a session titled, "Marketing Apples to Today's Customers."

Mr. Lutz anticipates that, like 2008, "Prices will be high as we're trying to fill an empty pipeline." He warned that these high prices could keep customers away from apples during the crop's early months, causing the industry to lose September and October. This lost faith could continue to cause prices to drop throughout the remainder of the season.

Mr. Lutz also noted a change in the pattern of promotions. "Retailers are telling us through their actions that they want to promote premium product," he said.

According to the Perishables Group, the top 10 varieties are Red Delicious, Gala, Fuji, Granny Smith Honeycrisp, Golden Delicious, McIntosh, Braeburn, Pink Lady and Jazz. Mr. Lutz showed that the shift in promotion corresponds with buyers' purchases of premium varieties. Honeycrisp, Pink Lady and Gala are seeing the greatest increase in household penetration, while McIntosh, Red Delicious and Golden Delicious are seeing the largest decrease.

Dianne Hyson, department chairperson for the family and consumer science department at California State University-Sacramento, discussed the current state of apple research. In reviewing recent studies, she noted the trend in which components of apples are isolated and studied in contrast to earlier work that studied whole the effects of whole apples.

Her research shows that "the whole apple is greater than the sum of its parts," and that because of the role played by dietary factors, the myriad health benefits provided by consuming apples and apple products help combat the top three causes of death in the United States: heart disease, malignant tumors and cerebrovascular diseases.

On the second day of the conference, Tony Freytag, senior vice president of sales and marketing for Crunch Pak, discussed value-added apples. The category has increased 33 percent in the past five years, and the distributing points increased 24 percent from 2006 to 2010.

Mr. Freytag noted that the snacking category is the driving force and that the sales spike in September, when children go back to school, and January, when adults "go back to school in terms of New Year's resolutions."

Although he said that his company is not directly benefiting from the inclusion of apple slices in every McDonald's Happy Meal, Mr. Freytag noted that it is good news for everyone in the business. "If there is more awareness to the consumer, there is more awareness for the product."