Mexican apple output way up, but Canada down slightly
CHICAGO - Canada’s apple output is down slightly, but Mexican apple production is way up this year, according to industry reports at the U.S. Apple Association’s Crop Outlook & Marketing Conference on Aug. 23.
Mexico’s economy is hurting, but the country won’t be hurting for apples in 2019, said Leighton Romney, CEO of Chihuahua-based Mexican apple grower/importer Paquime.
The abundant production this year — estimated at 27 million 42-pound cartons, more than 20% larger than an average year — will keep the country well-supplied until 2020.
Chihuahua, the most important apple region, is expecting a crop of 23 million boxes this year, up substantially from its average of about 18 million cartons.
Prices started out this summer as high as $35 per carton for golden delicious but have since dropped to $5 per carton.
With apples in oversupply, Romney said prices will continue dragging through December.
The total crop in Mexico is projected at 27 million cartons. Of that total, about 7 million cartons will be put in controlled atmosphere storage and 10 million will be put in conventional storage.
The rest must be marketed immediately.
“Between now and November is going to be kind of a bloodbath,” Romney said.
Because Mexico never has never supplies export markets, the Mexican apple market will be flooded until January 2020.
However, U.S. apple exports can still find demand with retailers in Mexico, he said.
Over the course of a year, Mexico consumes about 38 million cartons of apples. That leaves about 11 million cartons this year for the U.S. and other countries to fill, he said.
For the 2018 marketing season, the U.S. shipped about 12.8 million cartons to Mexico, and Mexico is the biggest export market for U.S. growers.
U.S. apples are popular picks for Mexican retail chains, because they come with precise sizing that Mexican packers don’t typically achieve.
However, a slowing economy is hurting fresh fruit demand now, Romney said, with the second quarter economic activity expected to decline by 0.7%.
“Fresh fruits basically are a luxury for about one-third of the population in Mexico, so it is difficult for them to buy expensive fruit,” he said.
Because 80% of Mexico’s apples are golden delicious, the country produces very few galas.
“Consumers love gala apples, so there are opportunities to export a lot galas to Mexico,”
Romney said. Granny smith demand also grows every year, he said.
The U.S.-Mexico-Canada Agreement needs to be signed to assure certainty in trade relationships, he said.
Industry leaders from Canada estimated the total output this year at 18.8 million cartons, down 2% from the 2018 crop. Compared with the five-year average, 2019 production in Canada will be up 1%.
By province, U.S. Apple reported:
- Ontario production is forecast down 11% to 7.3 million cartons, 2% below the five-year average;
- British Columbia is forecast at 4 million cartons, 15% more than the five-year average;
- Quebec apple output is rated at 5.3 million cartons, down 8% from the five-year average;
- Nova Scotia apple estimate is 2 million cartons, up 16% from the five-year average; and
- New Brunswick output is forecast at 144,000 cartons, down 12% from the five-year average.
Mcintosh variety apples account for 26% of the Canada crop, followed by gala with 17% and Honeycrisp with 7.5%. U.S. apple exports to Canada in 2018 totaled about 6.8 million cartons.