The Offshore Scene

In the US I confined my attention to what was available in the supermarkets. Apples on display were almost all of US origin and included Washington grown Gala types now stored for some 8 months from harvest, Red Delicious, Golden Delicious, Fuji, Braeburn, Pink Lady, Granny Smith and their new variety, Cameo. Cameo pulled the highest price at US$1.99/lb (NZ$10.40/kg), followed closely by large Royal Gala at US$1.89/lb (NZ$9.90/kg), then large Granny Smith at US$1.69/lb (NZ$8.85/kg), a similar price to large Fuji and large Braeburn. Pink Lady is not all that popular there and was selling for only US$1.39/lb (NZ$7.28/kg) - not much above large Red Delicious which was selling for US$1.29/lb (NZ$6.75/kg).

Only one line of New Zealand Royal Gala was seen. This was small fruit selling at US$1.49/lb (NZ$7.80/kg), and looked distinctly forward in maturity compared to the Washington Royal Gala which was six months older.

The very strong message from that market is that large size fruit commands a considerable premium. Of the varieties we grow, large sizes of Royal Gala, Granny Smith, Braeburn and Fuji all sell to consumers at considerable premium compared with other types of apples.

Chile has just harvested a big crop of small, poorly coloured fruit, so their industry is having difficulty marketing this year's crop for a satisfactory return.

Process prices are very low for them this year and well under process prices here. Even amongst the general gloom there were reports of some producers who had targeted their production to specific high value niche markets who were making satisfactory returns.

For instance, well coloured large sized Royal Gala were selling well with good prices. On the other hand, large sized poorly coloured reverted Royal Gala have little or no demand.

In southern Chile around Angol and Temuco, some 600 to 800 km south of Santiago, a specialist apple production area is developing with the objective of growing high specification northern European varieties including Braeburn for the United Kingdom and European markets. They get better colour due to the cooler climate. The Braeburn from that area has been impressive. Jonagold grows well, and more recently there have been plantings of Cox's Orange. Royal Gala is also a substantial variety and is meeting the English market specifications in regard to pressure, brix and acid balance.

Red Delicious remains the dominant variety in Chile. Here the trend is away from older strains towards the high coloured spur type varieties. In the warmer areas I have actually seen quite large blocks of Braeburn grafted over to Red Delicious.

As older blocks of Red Delicious are pulled out, their Granny Smith area is also being reduced.

Because of the difficult off-shore markets, there is greatly increased interest in developing the South American market. Columbia is often mentioned as a growing market and becoming an important outlet for Chilean fruit. They tend to think and trade in US$, so do not show a lot of interest in countries whose currencies have depreciated sharply against the US$, even though the Chilean currency has slipped steadily from 340 pesos in 1997 to 606 pesos at present to the US$.

New apple plantings in Chile have virtually ground to a halt while some established apple orchards are being removed. Cherries and wine grapes tend to be the favoured replacement crops where apple orchards are being pulled out.

In recent years, large plantings of Pink Lady were made. These are now coming into production and there are reports of difficulties in finding satisfactory markets for this variety. With its very good shelf life, they are looking hard at developing market outlets for this variety in South America.

In their main apple production districts, high temperatures during the growing season and poor conditions for colour development are giving real quality problems and poor packout performance for Royal Gala, Braeburn and Fuji. Sunburn is a major problem with Braeburn and Fuji. Fuji is also suffering from a skin cracking disorder known as "checking" in California, so Fuji packouts are very low.

2000/2001 was the "on" crop for the Chilean apple industry. Next year will be their "off" crop, so we can expect smaller volumes, but better fruit size.

Brazil had a smaller crop this year, estimated to be something like 40% below normal. This has led to good marketing conditions on their domestic market, so little interest this year in export. The Real (Brazilian currency) had devalued sharply in the last three months from US$0.57 to US$0.42, which has made it difficult for Chilean and Argentinean fruit to be sold for a satisfactory price in Brazil, so this is tending to keep foreign competition out of the Brazilian market.

Grade I fruit of Gala or Royal Gala was returning the orchardist at the farm gate about NZ$0.40/kg, while Grade III fruit, which would normally be sent for processing, was giving a farm gate return of NZ$0.07 to NZ$0.13 per kg.

The Brazilian industry is a dual-variety industry, based on roughly equal amounts of the Gala group and Fuji.

Their plantings are relatively new, with a large proportion planted intensively on dwarf rootstocks.

With most of the apple industry located in a low latitude, high altitude summer rainfall area, growing conditions are difficult. Winter chilling is marginal, and rather variable from year to year, and their high summer rainfall gives big problems with fungus disease and russet.

The industry has a strong history of biennial bearing, so as this year was an "off" crop, we can expect next year to be an "on" crop for them. Expect to see a lot more export fruit out of Brazil next February/March.