March, 1999
by Matt McCallum
Ten years ago the thought of a national marketing order would have brought chuckles from most apple growers and probably fought vehemently by several states including Washington.
A few things have changed since then.
World apple production, fueled by a 400% increase by China in the last seven years, has increased dramatically and is forecasted to rise by another 27% by 2005. State organizations are working closer together now than they ever have and even New York growers put aside their geographical differences and formed one marketing association in 1994. Washington growers passed a referendum increasing their assessment which will pump an extra $25 million into their marketing budget for generic advertising to increase domestic consumption because of the poor Asian export market.
This year’s low grower returns were a result of a huge crop in Washington, a poor Asian economy and record-low Chinese concentrate prices.
On top of this lies domestic consumption, which has remained relatively flat at 18-20 pounds per person per year.
To come up with some ideas on how to increase consumption and hopefully pricing, the U.S. Apple Association formed a task force in February to consider whether the U.S. apple industry could benefit from creating a national marketing order.
"We have a different environment today than we had in years past," said task force Chairman and USApple Trustee Joe Nicholson of Red Jacket Orchards, Geneva, N.Y. "Nobody is interested in another assessment, particularly one that will squander growers’ resources. The apple industry is facing tough challenges, but I think answers lie in big competitive ideas and this is one of them. As the industry’s national trade association, USApple’s role is to provide a forum for an industry-wide discussion of this critical topic."
Other members of the task force include:
• Bruce Allen, Columbia Reach Packing, Yakima, Wash.;
• Fred Hess, Hess Brothers Fruit Company, Leola, Pa.;
• Mike Jameson, Sierra Hills Packing, Inc., Stockton, Calif.;
• Steve Kropf, Kropf Fruit Company, Belding, Mich.;
• Sam Rowse, Veryfine, Westford, Mass.; and
• Paul Weller, Apple Processors Association, Washington, D.C.
The task force will develop a recommendation for consideration by USApple’s board of trustees at that group’s fall meeting, to be held August 21 in Chicago, Ill. USApple’s consideration of a national marketing order was initiated in response to a request late last year from the Washington Growers Clearing House Association, Wenatchee, Wash., which represents 2,700 growers in Washington state.
Currently, 37 federal fruit, vegetable and specialty-crop marketing orders are operated nationally. An order can include fresh and processed products, and may contain provisions for one or more of the following types of activities:
• Generic promotion and advertising;
• Quality regulation;
• Quantity regulation; and
• Research and development, and collection and dissemination of marketing information.
A proposal to create a federal marketing order must be initiated by industry members, and be presented to the U.S. Department of Agriculture for evaluation. In most cases, an order must be approved by at least two-thirds of the producers voting in a referendum, or by producers representing two-thirds of the production volume of those voting. USApple estimates that a 15-cent-per-bushel assessment on domestic and imported fresh apples, for example, would generate approximately $30 million for national consumer promotion annually; a 25-cent-per-bushel assessment would generate about $50 million.
The Fruit Growers News