Production Declines Amid Rising Costs and Labor Challenges
The U.S. apple industry is projected to produce 11.1 billion pounds or 282 million bushels of apples in the 2024/25 crop year, marking a 2% decrease from last season. According to the U.S. Apple Association’s (USApple) latest report, this reduction comes in the wake of a particularly strong 2023/24 season, which saw yields surpass expectations and reach a revised total of 270 million bushels. The current forecast reflects both shifting market dynamics and ongoing challenges that the industry must navigate.
Washington State remains the leading apple producer in the country, with nearly 179 million bushels expected in the coming season. While Washington’s output represents more than 60% of the nation’s total apple production, this year’s yield is down by 1% compared to last year. This slight decline is attributed to varying weather conditions that were generally favorable but slightly less ideal than the previous season.
Meanwhile, New York, which has experienced a more robust growing period, is forecasted to produce around 31 million bushels—up by 4%—reclaiming its position as the second-largest apple-producing state. On the other hand, Michigan, which has enjoyed two consecutive record-breaking seasons, is expected to see a significant 10% drop, yielding approximately 29 million bushels.
At the national level, the apple industry continues to face a confluence of challenges that are weighing on production and profitability. The rising costs of inputs such as labor, fertilizers, and utilities have put significant pressure on growers. Labor, in particular, remains the most pressing issue. It now accounts for approximately 60% of total production costs, largely driven by the industry’s reliance on the Temporary Agricultural Worker Program (H-2A visas). The program has seen a 177% increase in certifications over the last decade, reflecting the growing difficulty in securing domestic farm labor. The average hourly wage for H-2A workers in apple-producing states is now $18.22, with some states like California and Washington nearing $20 per hour. Beyond wages, the program also entails costs for transportation, housing, and various application fees, further straining growers’ budgets.
Despite these rising costs, the industry has not yet found commercially viable alternatives for mechanizing apple harvesting, meaning that the vast majority of U.S. apples continue to be picked by hand. This reliance on manual labor makes the industry particularly vulnerable to fluctuations in labor availability and costs. For many growers, this season will be marked by declining profit margins, with some even facing negative returns. The situation is exacerbated by the inflationary pressures on inputs like fertilizers and irrigation, which have seen double-digit percentage increases over the last decade.
Varietal shifts within the apple industry are also shaping production dynamics. Gala remains the most produced variety, accounting for approximately 17% of total U.S. apple output. However, newer varieties like Honeycrisp and Cosmic Crisp® are steadily gaining ground, while long-standing staples such as Red Delicious continue to decline.
Image: US Apple’s Outlook Report
Honeycrisp, in particular, has seen a dramatic rise in popularity, though this has been accompanied by significant price volatility. Over the past year, prices for Honeycrisp apples dropped by 16% due to an oversupply driven by a 51% increase in production during the 2023/24 season. Retailers have struggled to move the excess stock, resulting in higher-than-usual storage levels and contributing to downward pressure on prices.
The export market, a key component for balancing domestic supply, has also been a point of concern. Although U.S. apple exports grew by 44% year-over-year in the 2023/24 season, the industry is still recovering from the impact of trade disruptions and a strong U.S. dollar. In recent years, export volumes have fallen by 31%, driven in part by retaliatory tariffs from key markets like India, which severely restricted access to what was once the U.S.’s second-largest apple export destination. While India has lifted these tariffs, allowing exports to rebound, competition from low-cost producers like Iran and Türkiye continues to challenge the U.S.’s market share in this region.
The report also highlights the growing role of government purchases in stabilizing the industry during times of surplus. In the 2023/24 season, the USDA authorized nearly $138 million in apple purchases through the Section 32 program, which included fresh and processed apples for schools, food banks, and other institutions. These purchases provided critical relief to growers facing excess supply and plummeting prices. Looking ahead, another significant purchase is expected in the fall of 2024 to help manage the 2024/25 crop and prevent market saturation.
While the industry’s challenges are significant, there are also reasons for optimism. U.S. apple growers have demonstrated resilience and adaptability, embracing new technologies and varietal improvements to enhance efficiency. Over the past 20 years, the industry has managed to increase yields by nearly 50%, even as total apple-bearing acreage has decreased by 15%. Much of this growth can be attributed to the development of higher-density orchards and the replacement of outdated varieties with more marketable and productive options.
