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China's apple crop soars

Northwest growers say they must expand markets

From wire and staff reports

China produces a billion 42-pound boxes of apples a year, nearly 170 pounds for every person in the United States. In another five years, the billion-box figure is expected to double.

Growers in Washington, the nation's top apple-growing state, have produced as many as 100 million boxes of apples a year.

No one predicted China would go from being a minor player to where it is today, Washington State University agricultural economist Desmond O'Rourke said.

Right now, only a small percentage of China's apple crop is exported, but the country is boosting production and has the potential to flood the globe with apples.

The Northwest apple industry faces a number of obstacles, including the loss of farm chemicals and worries about labor shortages. But the growing supply of apples worldwide and a leveling-off of demand are its main concerns.

When you stop to think that China has 43 times the acreage in apples as does the entire Northwest, you can't help but be scared, said Tony Freytag, marketing director for Medford-based Naumes Inc. _ the nation's largest independent apple and pear grower.

Naumes, which grows apples in Washington, Oregon and California, exports to more than two dozen countries _ including Taiwan, Hong Kong and Singapore. Those markets are in China's back yard and Freytag said there's little question that Naumes' customer base there is threatened by China's growing presence.

It's there and we'd better learn how to deal with it, he said.

Growers, including Naumes, were hurt last year by a nearly 180 percent increase in below-cost Chinese apple juice-concentrate imports, which drove domestic prices down so far that it wasn't cost effective to pick some apples. The federal government is imposing a tariff on the juice imports to prevent future dumping, the practice of selling goods and commodities below the cost of production.

Naumes' Freytag and others in the industry said the globalization of apple sales means the industry needs to develop new markets.

Naumes is working to increase its exports to the Middle East and South America and build a stronger domestic market.

It is also strengthening its hold in established markets, such as Mexico. Where the majority of the company's sales in Mexico were handled by third-party brokers, Naumes now has a full-time sales representative to handle that. The more direct approach is building stronger relationships with customers that Naumes is counting on to ensure growth there.

Still, Freytag said China's emergence has been and will continue to be felt. For one thing, markets such as the Middle East and South America don't tend to be as rich as those on the Pacific Rim, where consumers have more disposable income.

Some of those markets will be very difficult to replace, he said.

Mike Yale, produce clerk at Takima's Fred Meyer, stacks some of the new varieties of apples available to consumers. - Photo from AP