Cost dynamics within the apple-producing industry in the United States have exhibited upward momentum, affecting both growers and retailers. Between 2018 and 2024, consumer prices per pound for apples escalated from approximately $1 to $1.80. This increase contrasts with the stagnation in payouts to growers, who have received roughly 70 cents per pound since 2018. The prolific supply of apples within Washington, a leading producer, exerts downward pressure on wholesale prices, as noted by Jon DeVaney, president of the Washington State Tree Fruit Association: "There's so much competition that the growers themselves don't have the pricing power to pass on their added costs."
In the face of rising production costs and narrowing profit margins, growers in Washington have sought international markets to secure better contract terms. India's 2017 import of $120 million in apples from Washington highlighted initial success until tariff impediments during President Trump's administration shifted focus to Canada and Mexico. Today, with renewed tariff contingencies, export dynamics to these countries remain unstable, further affecting the already low-profit margins faced by growers.
The retail sector, burdened by rising transportation, power, and operational costs, tends to adjust prices. Such increases have not translated into higher returns for growers, posing challenges to smaller farms and paving the way for industry consolidation. According to DeVaney, "There's a lot of frustration on the part of consumers who are seeing those higher prices."
The international trading prospects remain vital, with Mexico and Canada being significant importers due to favorable logistical considerations. In 2023, Mexico's apple importations reached almost $200 million, and Canada accounted for $132 million, despite earlier disturbances from tariffs originating in 2018. Post-tariff recovery attempts in markets like India have yet to restore previous trade volumes, according to Kate Nolan of the Northwest Seaport Alliance. Nolan emphasized, "Even if the tariffs ended tomorrow, [those contracts are] not going to come back overnight."
Future agreements may revive exports, though the existing scenario fosters pressures that could accelerate industry transformations, notably affecting smaller family-run orchards, as stated by DeVaney regarding their susceptibility to market volatility.
Source: Inlander