This year’s good news is Washington apple production is the second best ever. The better news is shipments to Asian markets are returning to normal.
Let me explain.
In 2014, our state had its best apple crop in history, but prospects to deliver cases of apples across the ocean were dampened by a labor dispute at West Coast seaports. That dispute led to a prolonged slowdown (and eventual shutdown) in loading ships carrying thousands of agriculture and manufactured products.
According to a report issued jointly by the National Association of Manufacturers and the National Retail Federation, the shutdown cost $2 billion a day.
One of the most heavily impacted industries was agriculture, particularly fresh product exports. Shipping containers of just picked apples destined for Asian markets sat on the docks allowing the fruit to spoil.
Our state’s growers lost $95 million in overseas sales. Foreign buyers, while preferring the quality of Washington apples, looked elsewhere to fill the void.
The slowdown crested in the fall months two years ago just as Washington apples ripened. The dispute was not resolved until February 2015, but growers, who could not find cold-storage, were forced to either dump their picked fruit in fields or leave it on the trees to rot.
The best news is earlier this year, the Washington State Tree Fruit Association (WSTFA) was among 112 organizations inking a contract with the Pacific Maritime Association and the Longshore and Warehouse Union. The contact goes through 2019 so shipments of sensitive fresh fruits and vegetables should reach their markets on time and in good condition this year.
Exports account for more than 30 percent of all Washington apple sales. Our state exports to 60 countries around the world.
While Mexico and Canada, which make up nearly one-half of our apple purchases, are our largest markets, the Washington Apple Commission looks at China, India, Indonesia, Vietnam, Malaysia and Thailand as the best opportunities for export growth. Those markets depend on timely oceangoing container shipments.
Dan Wheat, Capital Press, recently reported that sales to China-Hong Kong, Mexico and India are doing well so far this year. While Russia closed its markets to western produce, China recently opened its imports to all varieties of U.S. apples.
Interestingly, while American consumers are buying new varieties, such as Honeycrisp, they need to buy more. Slower than expected domestic apple consumption is driving prices and production down.
Wheat reports that Honeycrisp and other high-value apples are not seen as volume exports. Red Delicious and Gala remain the foreign focus.
WSTFA projects Washington’s annual apple crop has a total economic impact of $7.5 billion and supports 61,000 jobs. Apple exports alone are our state’s eighth largest export commodity.
The International Trade Administration reports exported Washington products contributed $86.4 billion to our economy and supported 375,000 jobs. Across the U.S., exports generated $2.26 trillion and created 11.5 million jobs.
Export Washington summarized it best. Washington’s economy is unusually dependent upon exports. In most other states and most global economies imports are greater than or equal to exports. Our state’s exports account for 19 percent of GDP while imports are 12 percent.
A big concern to American traders is the strong dollar hampers sales. The other is the increasing pressure to unilaterally change or abandon trade agreements.
International trade is governed by free trade pacts in which our country has 14 with 20 other countries. Those nations also produce goods for sale in the United States.
Trade agreements take years of carefully negotiation, so it is important for our leaders to look deeply at the provisions of those accords before upsetting the apple cart.
Don C. Brunell is a business analyst, writer and columnist. He retired as president of the Association of Washington Business, the state’s oldest and largest business organization, and now lives in Vancouver. He can be contacted at theBrunells@msn.com.
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