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September 1, 2017 CapitalPress.com 3 Smaller apple crops elsewhere may benefit Washington’s marketers By DAN WHEAT Capital Press YAKIMA, Wash. — Smaller apple crops elsewhere in the U.S. and in Mexico, Canada and Europe may help Washington marketers main- tain sales and prices for the state’s huge crop this season. The total 2017 U.S. apple crop is estimated at 248 mil- lion, 42-pound boxes, down 8 percent from last season. The national forecast was released Aug. 25 by the U.S. Apple Association at its an- nual outlook conference in Chicago. “All in all, people were op- timistic the U.S. crop should allow for solid prices,” said Mike Preacher, director of marketing at Domex Super- fresh Growers in Yakima, Wash. He attended the con- ference. The global picture looks good for Washington apples but it’s too early to know how good, he said. Early Gala pric- es are solid, he said. Desmond O’Rourke, ap- ple market analyst and retired Washington State University ag economist, said it’s doubt- ful this season will be as good as 2012, but that it should be better than the 2016 season now ending. Washington had a huge crop in 2012, when many oth- er apple-producing regions were down. It enabled Wash- ington to sell record volumes at high prices. O’Rourke said he sees the year-long average wholesale price of all varieties bouncing back up to $25 after being $22 this past season. Red Delicious should climb back up to $20 from $15 and Gala should go from $21.50 to $22, he said. Gener- ally, $17 to $18 is breakeven. Michigan’s apple crop is 27 percent down at 20.3 mil- lion boxes because of a freeze. “It’s an easier market for Dan Wheat/Capital Press Susana Flores picks Gala apples at Cameron Lewis’ orchard in East Wenatchee, Wash., on Aug. 28. Washington is starting har- vest of a large crop and hopes to have a better season since other apple-producing regions have lighter crops. our guys to tap into because it’s closer than New York,” O’Rourke said. New York is advancing strongly in fresh market with growing volumes of its new SnapDragon and RubyFrost varieties, developed by Cor- nell University and marketed by Crunch Time Marketing Group, he said. Mexico’s crop is down 30 percent and is Washing- ton’s largest export market. It should be an excellent oppor- tunity, O’Rourke said. “That all helps, but big crops are always tough,” said Andy Handley, a small grow- er in East Wenatchee, Wash. There’s a lot of new pro- duction in Quincy and it’s hard to know how big it real- ly is, Handley said, adding he suspects the crop may be big- ger than forecast. Washington’s fresh crop is forecast at 130.9 million, 40-pound boxes. Its total fresh and processing crop is estimated at 159.5 million, 42-pound boxes, down 8 per- cent from 2016. Other state fresh and pro- cessing forecasts: New York, 28 million, even with 2016; Michigan, 20.3 million, down 27 percent; and Pennsylvania, 11.2 million, up 6 percent. The next tier: Virginia, 5.2 million boxes, up 22 percent; Oregon 4.1 million, down 10 percent; California, 5 mil- lion, down 16 percent; North Carolina, 2.3 million, down 7 percent; West Virginia, 2.3 million, up 21 percent; Idaho, 1.2 million, down 8 percent; and Ohio, 1.1 million, up 40 percent. U.S. Apple’s national fore- cast of 248 million boxes is even with its five-year aver- age. It’s 400,000 boxes less than a USDA estimate. Mark Seetin, U.S. Apple’s director of regulatory and in- dustry affairs, there’s real rea- son to be optimistic about the 2017 season given industry advancements of recent years. He listed the ability to effec- tively market larger crops, increased productivity, im- proved quality in storage, new varieties aimed at consumer preferences, innovative mar- keting and export prospects. Apple production was 6 percent higher in 2016 than in 1995 but on 31 percent fewer acres, Seetin said. Yield per acre has increase 50 percent in the past 13 years. In 2016, 67 percent of the U.S. crop was fresh market and 33 percent processed ver- sus 51 percent fresh and 49 percent processed in 1994, Seetin said. Fresh market growth is driving grower in- come, he said. Total U.S. USDA apple farmgate value was $3.46 billion in 2016, up 3 percent from 2015, for a record. Even after adjusting the 1994 crop for inflation growers received more from the similar-sized 2016 crop, Seetin said. Mark Boyer, a principal in Ridgetop Orchards, Fisher- town, Pa., was elected chair- man of the board at the U.S. Apple meeting. Kaari Stan- nard, president and owner of New York Apple Sales, Glen- mont, N.Y., was elected vice chairman. Jeff Colombini, president of Lodi Farming, Stockton, Calif., was elected secretary; and John Graden, of Crunch Pak, Cashmere, Wash., was elected treasurer. Hop broker bankruptcy may signal industry turbulence By MATEUSZ PERKOWSKI Capital Press The bankruptucy of a Wash- ington state hop merchant may signal renewed turbulence in the hops market, with low- er-than-expected demand for the crop raising oversupply concerns. 47 Hops of Yakima, Wash., has filed for Chapter 11 bank- ruptcy protection, which shields the company from cred- itors while it develops a restruc- turing plan to repay debts and remain operational. The hop broker has more than $7.4 million in debt and $4.3 million in assets, accord- ing to the filing. In 2016, the company earned $10.6 million in revenues, up from $7.1 mil- lion the previous year. Douglas MacKinnon, the company’s president, did not respond to a request for com- ment, but on 47 Hops’ website he blames the bankruptcy on slower growth in the craft beer market. “Unfortunately, during the past several years, brewers fu- eled by optimism contracted for more hops than they now need,” he wrote. Some brewers have delayed paying for hops and taking de- livery of the crop, saddling 47 Hops with a higher inventory and debt burden, according to MacKinnon. Judging from USDA sta- tistics, 47 Hops is not alone in this predicament. Earlier this year, growers and dealers held hops stocks of 105 million pounds, three times the amount held by brewers, ac- cording to the agency. To compare, growers and dealers held hop stocks of 64 million pounds five years earli- er, while brewers held 53 mil- lion pounds of the crop. The growing inventories reflect excessive enthusiasm among brewers and farmers, who both overestimated de- mand for “aroma” hops used in craft beers, said John Annen, a hop grower near Mt. Angel, Ore., who supplies 47 Hops. “There are too many aroma hops around. Too many in the ground, too many in the ware- house,” Annen said. Craft brewers expected the steep upward trajectory of their beer sales to remain constant, spurring farmers to plant more hops, he said. “One thing builds on another.” When sales weren’t as ro- bust as projected, brewers pushed back deliveries of hops, Annen said. “It just starts back- ing up.” In 2014, sales of craft beer grew 22 percent by value and 18 percent by volume, but last year, sales increased 10 percent by value and 6 percent by vol- ume, according to the Brewers Association. “We have seen a deceler- ation,” said Bart Watson, the group’s chief economist. Craft beers typically require three to four times more hops per barrel than conventional domestic beer, so the upswing in craft beer production had an outsized impact on hop de- mand, he said. Many of the new brewer- ies are small and lack storage space, though, which partly helps explain the rising hop stocks among dealers and growers, Watson said. However, in some areas, the craft beer market has grown in- creasingly competitive but re- tailers have been slower to add shelf space and tap handles to accommodate new brands, he said. “It’s crowded out there,” Watson said. The hop industry is no stranger to turmoil. In 2007, a shortage of hops caused brewers to start “panic buying,” but strong production soon reversed that trend, lead- ing to an oversupply in 2009, said Ann George, executive director of the Hop Growers of America. The situation has grown more complicated as farmers now produce numerous hop cultivars to meet brewers’ needs, so there can be surpluses of some varieties and shortages of others, she said. Don Jenkins/Capital Press Corn grows in a dry field Aug. 29 in southwest Washington. The federal Climate Prediction Center forecasts temperatures far above normal in Washington during the first half of September. An ‘incredibly dry’ Washington to heat up Weather forecasters issue warning By DON JENKINS Capital Press Washington state, already described in the USDA’s lat- est crop report as “incredibly dry,” likely will experience temperatures much above normal for the first 10 days of September, the Nation- al Weather Service warned Tuesday. The agency’s Climate Pre- diction Center’s “hazardous outlook” for heat also includ- ed most of Oregon, Idaho and Northern California, but the probability of soaring tem- peratures is particularly high in Washington, according to the center. The state already has been going through one of its hotter and drier summers on record. July was drier than in 2015, when Washington suffered a severe statewide drought. In a report released Monday, the USDA said that some corn fields are not developing and pastures are rapidly drying. “The state as a whole has been incredibly dry and many of the operations were hoping for some rain to alleviate the dry conditions,” according to the USDA’s National Agricul- tural Statistics Service. A wet winter and spring washed away drought condi- tions for much of the West, but those conditions are creeping back in, especially in Idaho and Washington. The U.S. Drought Monitor last week classified 17 per- cent of Idaho in a “moderate drought,” up from 4 percent the week before. A section of northeast Washington, mak- ing up 2 percent of the state, was also classified as in a moderate drought, the first time any part of Washing- ton has been designated in a drought since October. Washington State As- sistant Climatologist Karin Bumbaco said Tuesday that this summer has resembled 2015, but the conditions are comparatively favorable. “The streams are still look- ing decent in a lot of places,” she said. “If we return to fall rains, we’ll be fine.” Sea-surface temperatures in the Pacific Ocean, a key indicator of the region’s com- ing weather, are expected to be neutral this winter. Bum- baco said making long-range climate forecasts will be dif- ficult. “There’s not a strong signal one way or the other,” she said. Two-thirds of the streams monitored by the U.S. Geo- logical Survey in Washing- ton were running at normal or above-normal levels on Tuesday. Yakima River Basin reservoirs held 112 percent of the average amount of water for the date, according to the U.S. Bureau of Reclamation. The Washington Depart- ment of Ecology in August issued curtailment notices to a total of 108 irrigators in the Chehalis and Similkameen basins and warned 75 other ir- rigators in three basins about possible water shortages. Still, it’s unlikely the state will move toward declaring a drought, Ecology drought co- ordinator Jeff Marti said. “It’s an interesting dispar- ity between our water-supply picture, and the dry summer we’ve had,” he said. “It goes to show our tank got filled up pretty well this winter and spring.” Clark County, Wash., farmer Bill Zimmerman said Wednesday that an extended growing season in Western Washington may help some crops, but a heat wave could have lingering effects. He said his raspberries produced a good crop af- ter struggling through a wet spring, but are now suffer- ing in the heat. “I say we could see about a 60 per- cent loss for next year,” he said. Services & Supplies 2017 Special Section October 6th, 2017 PULP BERRY BASKETS FALL CLEARANCE SALE! 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