Great Lakes Fruit Growers News: July, 1998

Washington apple growers asked to increase assessment 60%

Washington state apple growers are being asked to put their money where their increased production has put them.
Facing a record crop of more than 130 million bushels and the first time packing more than 100 million boxes for the fresh market, the Washington State Apple Commission is asking growers to increase the assessment from 25 to 40 cents a box for the next three years.
The move would boost the state's promotion assessment, which is already the highest in the nation, by 60% increasing its budget from $25 million to $40 million. It could help all apple growers because the extra $15 million would be aimed at increasing U.S. apple consumption which has been stagnant for many years. The commission has been spending $7 million on consumer advertising, so the extra funds will boost that total budget to $23 million. None of the money will be used to pay retailers to take more Washington apples.
"We've done the job at the retail level," said commission President Steve Lutz. "We aren't going to make any more sales by paying off retailers. We've got to make the market bigger."
With the increase, the commission will test year-round radio, television, and print advertising - something that's never been done before.
The commission's advertising agency, McCann-Erickson, Seattle, is developing a fall advertising campaign that will be unveiled in August. Meanwhile, a $225,000 research project is being conducted to help the agency come up with a new and compelling consumer message to be featured in advertising starting in the new year.
If Washington growers decide to increase their assessment, it could come just in time for the nation's apple growers who are facing a depressed market and a large crop this season.
Low apple prices due to a significant carry over of 1997 apple crop at the start of the season, slower export trade to Asia because of its financial crisis, Mexico's dumping claim that shut that market off until recently and cheap Chinese concentrate that is depressing processing prices have pushed more apples onto the domestic market and depressed prices.
To market a crop of 100 to 105 packed boxes, Washington will need to sell about 70 to 75 million boxes on the domestic market, yet the industry has never sold much more than 60 million boxes domestically before.
"We may have a challenge just to get the market we once had, let alone grow the market for bigger crops," Lutz said. "The knee jerk reaction by the growers is "there is no way to support this because I'm not making money as it is," but in reality if we don't do something we will have bigger problems, like 20 million boxes of apples that the world market won't take."
Ballots are expected to go out August 5, with the results to be announced by the end of that month . The increase would last for three years and then growers would vote at the end of that period whether to continue the assessment or go back to the current rate of 25 cents per box. The increase will pass if 51% of the growers, representing at least 51% of the acreage, vote in favor.