The last few seasons have been difficult for those USA apple shippers dealing with the UK and European Union (EU) markets. While regulatory issues – first with morpholine and then DPA – affected producers and exporters around the world, the timing in the calendar and the short-, medium- and long-term implications of both decisions by the European Commission (EC) meant the impact on the USA’s apple industry was arguably greater than anywhere else
There has been a collective holding of breath amongst shippers in the last month while the EC decided its next steps on the post-harvest treatment diphenylamine (DPA). But at the recent SCOPAFF meeting, the committee voted in favour of a proposal to extend the current 0.1 mg/kg substantive maximum residue level (MRL) for up to a further two years, to allow for outstanding industry monitoring data to be submitted.
This is pretty good news, as any lowering of the MRL could have meant additional difficulties for shippers. However, it should also be noted that the extension is flexible. So, if at any time in the two-year period sufficient data is generated to conclude that residues are consistently at or below 0.05 mg/kg (the limit of determination) action will be taken to lower the MRL to that level.
As a result of the uncertainty created by the EU’s regularly changing stance on chemicals, fewer USA shippers are still involved in the historical business with the old continent, as the constraints imposed upon them have made sendings less commercially viable and more risky.
New York State remains committed
However, New York State’s apple industry has kept its nerve and, says Jim Allen, president of the New York Apple Association, the state’s shippers continue to work hard to meet the stringent import restrictions that the EU places on their industry.
“Many USA apple shippers have found that meeting and complying with the over-burdensome regulations have created undue risk and it drastically increases the cost of doing business,” says Allen. “In today’s very competitive global market, especially given the situation in Russia, the objective is to hold the line on costs, not to increase them.”
As is the case with the rest of North America, there are fewer New York State shippers involved in the European job these days, but Allen says those that remain in the game are as committed as ever.
“Despite the political and EU barriers, a [comparatively] small number of New York [State] apple exports continue to meet and satisfy the demands of the marketplace and continue to provide New York State apples to the UK and Europe.”
Empire variety holds strong in the UK
Empire is still the number one variety by volume, followed by Red Delicious and McIntosh. Presently – and until July – New York State Red Delicious is holding a strong and prominent position in one major UK retailer.
“Volume and shipments to the EU are steadily declining from year to year; last season that was primarily because of tensions in the EU and Russia, and the ever-increasing trade barriers that the EU continues to implement,” Allen says.
The 2015/16 season has started with Empire in demand from UK supermarkets though, and availability is not going to be an issue. New York State is forecast to harvest 26.2 million cartons of apples his year, which a slightly smaller crop than the state’s average over the past five years, but of no great consequence to exports — roughly 10% of the crop is exported each year.
One shipper that remains heavily involved in the UK is United Apple Sales. International account manager Brett Baker says: “Last season was much like many others in the past for Empire. One account was up, one account was down. The net was about the same.”
The firm took a calculated risk to introduce a greater volume of the McIntosh variety into the mix last season, as the variety had lost favour with some customers due to inconsistent performance. It paid off, according to Baker. “McIntosh arrivals went well; better than expected. We are encouraged and will look to expand on that this year.
Improvements critical to UK presence
United Apple Sales will continue to place a high priority on the UK/EU market, confirms Baker. “We are expanding our DPA-free storage network and have already visited the UK to develop our sales programmes. We continue to address the requirements set by the European market for us to ship to the EU. Each year, we improve our programmes and each year, we do a better job.”
That continual improvement is key, says Allen. “We will only sustain our position in the market by continuing to meet the market’s demands, which include high quality fruit, dependable service to the retail sector, and providing the consumer with an excellent eating experience. We continue to explore new markets and expansion is always an objective, as long as the results can sustain the business.
“We [New York Apple Association] have done better than any other exporting group to overcome and to meet the challenges. Our members have remained resolute to protect this market, and have risen to meet the demands. It has been an expensive exercise. As long as the return on that investment is favourable, then I expect business to continue.
“But, like any business, if it is not properly sustained, then it cannot survive.”
Washington State shows resilience
One leading UK topfruit importer, speaking on condition of anonymity, says his New York State suppliers have had to overcome significant hurdles to supply the British market.
The importer, whose company sources Empire from November, and Red Delicious from May onwards, says he is unsurprised that more Washington State growers have not adapted their production to meet EU conditions, describing the UK market as being too small for them to be worth jumping through hoops.
“The UK was a market for them in the past, but I think in the case of Washington apples, they have looked at the barriers and thought, ‘it’s just not worth it,’” he claims.
However, by no means all British topfruit importers have abandoned Washington State.
Worldwide Fruit, for example, maintains a significant level of apple imports from Washington State growers, according to commercial manager Keith Butterworth, who says the company imports Red Delicious from the state close to 12 months a year, as well as smaller volumes of Pink Lady.
“We have a gap in supply between old season fruit in October until the end of November/ beginning of December, but if we could source it 52 weeks a year, we would,” he says. “Some of our customers sell more fruit if it comes from Washington [State]. Customers like the really dark Red Delicious that Washington [State] delivers.”
Although the EC’s decision to extend current permitted DPA levels for a further two years may well be seen as a positive for the sector, Butterworth concedes that it has not been an ideal situation for Washington State growers.
The difficulties with DPA have also been exacerbated by the need to eliminate other additives, notably the glazing agent morpholine, which although is approved for use in the USA, is not permitted in the EU.
“Since the morpholine issue, we have cut back on both volumes and the growers that we deal with,” says Butterworth. In fact, he says Worldwide Fruit also no longer brings in organic apples from Washington State; citing a combination of the difficulties faced in meeting European requirements, combined with a strong domestic market.
Certain producers will meet the challenge
Despite this, Butterworth reveals that Worldwide Fruit has been able to find producers willing to overcome the challenges of exporting to the UK. “At the end of the day, we have the growers out there who will find the solution for us,” he says.
In the case of Pink Lady, the company sources from a single grower in Washington State that Butterworth says has overcome all the technical issues associated with exports to the EU.
“The guy we’ve got, who is based in Yakima region, has specifically planted and grown fruit to come over here — we’ve had a long-term relationship with him for 12 years that has proven to be successful,” he says.
Depending on the size of the crop, Butterworth says Worldwide Fruit would typically expect to import between 800-1,000 tonnes of Pink Lady from Washington State each year, equivalent to around 40-50 container loads.
Although still a relatively small volume and dependent on demand, the importer also brings in approximately 1,000-1,200t of Red Delicious from the Pacific Northwest on an annual basis.
Gap for USA-grown organic Pink Lady
In terms of other potential apple imports from the region that could do well in the UK, Butterworth says there has been a great deal of discussion in the sector about the relative merits of the Honeycrisp variety, although he remains to be convinced.
“There has been a lot of talk about Honeycrisp, but that really hasn’t worked for us in the UK,” he says. “Although there has been a great deal of discussion about it in the US, it just hasn’t performed as well for us as Envy or Ambrosia.”
In contrast, Butterworth believes there is a major opportunity for organic Pink Lady that could potentially be realised by USA growers if they are willing to make the necessary investments to meet EU requirements.
“If there is a desire to do it and they can overcome the technical issues, there is not enough organic Pink Lady in Europe to meet current demand,” he adds.