Apple Growers Continue To Struggle

Thursday, November 30th 2000, 12:00 am

By: News On 6

WENATCHEE, Wash. (AP) â€” Apple growers may have won a victory earlier this spring when the U.S. government imposed a tariff that helped stem the flood of below-cost Chinese apple juice concentrate, but the industry continues to struggle.

Juice apple prices from the growing season that just ended jumped to $98 a ton, up from $57 a ton the previous year, but significantly lower than the $153 a ton in 1995.

But other problems in the cyclical economy of the apple industry also have plagued growers across the country and here in Washington, the nation's No. 1 apple-producing state.

There's the double-edged sword of ever-increasing yield and production, which drives down prices; the concentration of buying power as supermarket chains consolidate, giving them tremendous leverage in a buyer's market; and the loss of some export markets due to economic conditions abroad, increased competition and trade regulation.

In Wenatchee, a 55-year-old tree-fruit lending cooperative has stopped making loans and will shut down next year because apple farmers aren't making enough money to cover the cost of production.

So far, nine orchardists have filed for bankruptcy protection this year, compared with three total in its entire history, said Ron Ward, general manager at Growers Credit. And industry representatives are predicting that several thousand acres of Red Delicious apples may be pulled out this winter as unprofitable.

Meanwhile, a global glut of apple-juice concentrate is also affecting prices.

``While we have succeeded in preventing the Chinese from exporting unfairly priced concentrate to our market, it's still being sold somewhere in the world, displacing sales wherever that's occurring,'' said Kraig Naasz, director of the U.S. Apple Association, an industry trade group in McLean, Va.

Pat Moss, a spokeswoman for Selah-based juicemaker Tree Top, said long-term effects of the tariff are still unclear, though they should benefit the industry.

Between 1995 and 1998, imports of Chinese concentrate had grown a staggering 1,200 percent, from 2.2 million gallons to 49 million gallons, while the price per gallon fell from $7.65 to $3.57. China's market share in the United States increased from 1 percent to 18 percent.

It cost domestic producers $760 million from the years 1996 through 1998, Naasz said.

China is now the world's largest producer of apples at 1.09 billion bushels, compared with 252 million bushels produced in the United States.

Something of a turnaround began in June 1999, after the anti-dumping complaint was filed with the U.S. government.

The International Trade Commission would eventually rule that the cheap concentrate had economically damaged U.S. producers. In May, the U.S. Department of Commerce imposed a 52 percent duty on most of the Chinese concentrate imports to even competition.

But the industry has been slow to bounce back, Naasz said.

``American apple growers received $49 million more in revenue for their 1999 juice apple crop than they got for their 1998 juice apple crop,'' he said.

``Forty-nine million dollars is a dramatic improvement over 1998, but we still haven't covered the ground lost over the preceding three years for imported Chinese concentrate.''