Port slowdowns hurt Washington apple exports

The Washington apple industry is losing tens of millions of dollars weekly in sales because of the longshoremen’s work slowdown at West Coast ports over contract negotiations.

By Dan Wheat, November 26, 2014, Capital Press

The Washington apple industry is losing tens of millions of dollars weekly in sales because of the longshoremen’s work slowdown at West Coast ports over contract negotiations.

 

“Individual firms have lost millions of dollars a week in orders. We’re estimating tens of millions of dollars each week throughout the industry,” said Jon DeVaney, president of the Washington State Tree Fruit Association in Wenatchee and Yakima.

 

Sales to Asia, India, the Middle East and Caribbean have been effected since Nov. 1, DeVaney said.

 

“There’s an immediate negative impact on returns to growers and the industry as a whole. A number of firms (packer-shipper-marketers) have laid off 100 to 200 people or reduced hours because they’re not moving inventory at the rate they planned to,” he said.

 

“It hurts and continues to hurt. We need to find a solution. It’s having a huge impact,” said Todd Fryhover, president of the Washington Apple Commission in Wenatchee.

 

Negotiations between longshoremen and terminal operators have been suspended until Dec. 2 and many industries are urging elected officials and the president to help bring about a settlement, DeVaney said.

 

The Washington apple industry has already seen prices plummet because of oversupply. Prices are down 15 to 20 percent from a year ago, said Tom Riggan, general manager of Chelan Fresh Marketing in Chelan.

 

The crop was pegged at 155 million, 40-pound boxes on Nov. 1. That’s 35 percent larger than the prior year and 20 percent more than the record crop of 2012.

 

About 20 percent of the crop, 32.4 million boxes, had been sold as of Nov. 23 which is commensurate with the percentage sold at this time in 2012, DeVaney said.

 

Of the 32.4 million, 22.4 million is domestic and 9.9 million is export, Riggan said. Export would be 2 million to 3 million greater without the port problems, he said.

 

November, December and January normally are heavy shipment months to Asia for the Chinese New Year in February. Demand in Asia is strong, but product can’t get shipped.

 

Each week that’s lost is “irretrievable,” said Keith Mathews, CEO and general manager of First Fruits Marketing of Washington in Yakima. Shipments were 20 percent of capacity, he said.

 

Two weeks ago ports were at a “full standstill,” now they’re functioning but with smaller crews, said T.J. Rogers, an export salesman for Chelan Fresh Marketing. Shipments are down 60 to 70 percent, he said.

 

Chelan Fresh exported 70,000 boxes last week when it should be exporting 140,000-plus, Rogers said.

 

With low prices, trucking apples to Prince Rupert, B.C., or to the East Coast for overseas shipment is cost prohibitive, he said.

 

Another ramification is Asian customers are turning to Europe and elsewhere with quality becoming secondary to just get fruit on their shelves, Riggan said.

 

Loss of market share isn’t always easy to regain.

 

“The only alternative is to put this fruit onto an already depressed domestic market which doesn’t help at all,” Mathews said.

 

“I don’t have any hope it will come back soon. It probably will be this way all year. Unless growers have a pretty diverse portfolio of varieties, it will be difficult to make an income,” Mathews said.

 

Shipments, domestic and export, have been running 3 million boxes a week, but that’s not enough, he said. “At this pace we will either throw a lot of fruit away or not have a market,” he said.

 

Bruce Grim, manager of the Washington Apple Growers Marketing Association in Wenatchee, said 3 million boxes per week is good momentum. Once the industry sorts out what sizes and grades it can’t sell, prices will rebound, he said.

 

Sales to Mexico were up 100,000 boxes for the first two weeks of November from a year ago, Grim said.

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