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Comparing apples to apples:
An Iowa perspective on apples and local food systems (continued)
Rich Pirog, education coordinator and John Tyndall, summer intern
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Comparing the pathways
Table 1 compares key activities in the pathways of the Iowa and Washington Red Delicious apples as they make their way from the orchard to the Iowa consumer. Most of the Iowa Red Delicious apples are sold from the orchard store and farmers markets and are consumed in Iowa. The majority of Washington Red Delicious apples are shipped out-of-state for export sales and consumption. Most Iowa Red Delicious apples not for immediate sale are put in cold storage for up to two months; a significant percentage of Washingtons crop is put in CA storage for distribution, sales, and consumption for up to eight months after harvest. Washington grades its apples to meet USDA standards, whereas Iowa uses a simple grading process based on appearance and does not follow USDA standards. Although the comparison focused on Red Delicious apples, the paths of other varieties grown in both states, such as Golden Delicious, would likely follow similar steps.
The 1990s--China surpasses the United States in apple production
The 1990s have been a decade of great change in the apple industry globally. China overtook the United States as the world leader in apple production in the early 1990s. Spurred by agrarian and land use reforms, and financed in part by the Chinese central government and Japan, Chinese growers initiated a massive apple tree-planting program in the late 1970s that continues today. By 1997, China produced more than four times as many apples as the United States.21 See Table 2 for a list of the top apple-producing countries. Current industry predictions see China doubling its 1997 production by 2005.
There are several factors fueling the Chinese apple industrys growth. China enjoys geographic proximity to Asian and Pacific Rim markets once supplied by the United States. China's inexpensive apples are more attractive to Asian countries with fragile economies and low per capita income. As an example, exports of Washington apples to Indonesia have declined about 80 percent in recent years.22
When millions of Chinese apple trees began to bear fruit in the early 1980s, the Chinese government invested in equipment and an infrastructure to produce huge volumes of apple juice concentrate. Leading apple-producing states such as Washington have felt the economic pressure as low-cost Chinese apple concentrate has flooded the global market in recent years, cutting their market share. As of September 1999, 21 U.S. Senators have called upon Secretary of Commerce William Daley to respond to the apple industrys complaints and impose stiff anti-dumping tariffs on Chinese apple concentrate entering the United States.23
Implications for local food systems in Iowa
Most of the apples grown in Iowa are purchased and consumed within the state. Most of the apples grown in Washington are exported for sale and consumption. The Washington apple industry has an infrastructure, along with name recognition among consumers, which allows it to dominate the markets of Iowa and other apple-producing states and compete in world markets. However, apple industries in Washington and other apple-exporting states are affected by the current market dominance of Chinese apples (and apple concentrate) to a far greater extent than is Iowas. Iowa apple growers have few, if any, export markets to be lost to Chinese competitors.
Apple consumption in Iowa
Do Iowa consumers eat more Iowa-grown apples than apples produced outside the state? To answer this question it is necessary to first make a few assumptions:
- Use a five-year Iowa apple production average (1994-1998) of 261,000 bushels.24
- Apply a five-year average (that ends with the 1997-1998 seasons) for U.S. per capita consumption of 19.0 pounds of fresh apples and 28.4 pounds of processed apples (total of 47.4 pounds yearly) to Iowa consumers. 25
- Based on conversations with growers and horticulturists, estimate 95 percent of Iowa production is consumed in Iowa.
- Based on conversations with growers and horticulturists, estimate 15 percent of the Iowa apples produced are put in CA storage.
- Estimate 20 percent of total production is used for apple cider.26
Using 1998 Iowa population figures (2.862 million people), and the assumptions made above, Iowans eat more than 3.2 million bushels of fresh and processed apples per year, but Iowa grows less than eight percent of this total. Looking at fresh apple per capita consumption, Iowans eat almost 1.3 million bushels of fresh apples per year, but Iowa grows only about 15 percent of the fresh apples it consumes.
The 15 percent fresh apple consumption does not tell the whole story, however. The majority of Iowas fresh apples are not available to Iowa consumers year-round, as are apples from states and countries that have adequate CA storage. Fresh apple consumption for the four-month period (mid-August to mid-December) when most of the Iowa-grown fresh apples are available for sale is estimated at one-third of the 1.3 million bushels per capita fresh apple consumption, or 433,000 bushels.27 Using this per capita consumption estimate and the assumptions above, Iowa supplies about 36 percent of the fresh apples consumed in the state during the four-month peak sale season.
Potential for new retail and wholesale local markets
Iowa apple growers hold a large share of the fall fresh apple market due to strong on-farm and farmers market retail sales, and they count on these retail sales to make a profit. Iowa apple growers have a small share of the yearly apple market, in part because they do not have enough CA storage and production volume to store, distribute, and market apples year-round. Given these and other constraints, it does not seem realistic for Iowa growers to compete with major apple-growing states and countries for fall export markets, or for a larger share of the Iowa market during the winter, spring, and summer seasons.
Iowa apple growers could look at increasing their share of the Iowa fall retail and wholesale apple market. There are existing markets where sales could increase, and potential local markets that remain untapped. Apples from Washington and other states and countries compete strongly with Iowa apples for grocery shelf space during the fall. Produce department shelf space for apples was surveyed at eight supermarkets representing four different grocery chains in six Iowa cities (Ames, Ankeny, Cedar Rapids, Davenport, Des Moines, and Iowa City) from September 20 through October 3, 1999. The survey found that apples from Arizona, Illinois, Iowa, Michigan, Minnesota, Missouri, New Zealand, South Africa, Utah, and Washington were for sale. Iowa apples averaged less than 10 percent of the total apple shelf space across these stores.
College and university residence halls could be a potential wholesale market for Iowa apple growers. For example, Iowa State University residence halls purchased 732 bushels of apples grown in other states from September through December, 1998.28 Conversations with growers and horticulturists indicate that few Iowa apple growers sell to elementary and secondary schools, suggesting schools may be a potential fall wholesale market. Other Iowa institutions, including restaurants, hotels, conference centers, workplace cafeterias, and convenience stores offer potential for fall sales.
Iowa apple growers would welcome more people coming to their orchard stores and to farmers markets to buy their apples. Many Iowa apple growers would not consider hotels, restaurants, convenience stores, supermarkets, schools, and other institutions as viable wholesale markets because it would usually not be cost-effective to compete with low-priced apples from Washington and other states and countries. Iowa growers may also not have access to the labor needed to box or bag the apples to meet the buyers needs. However, increasing interest in developing Iowas local food systems is an important reason to reexamine these wholesale markets as potential value-added opportunities.
Pilot local food system projects
Pilot local food system projects in several Iowa counties have reported success in increasing sales of locally grown produce and meats to hotels, restaurants, and institutions such as hospitals, universities, workplace cafeterias, and conference centers. For example, a Leopold Center-funded project at Allen Hospital in Waterloo reported that 22 percent of the produce purchased during the 1998 growing season and an estimated 40 percent for the 1999 season came from local growers. Allen Hospital had purchased little to no local produce in previous years. The Field to Family Project associated with Practical Farmers of Iowa has been linking growers with the food service staff at ISUs Scheman Building, resulting in Scheman offering an Iowa-grown food menu for its conference service clients as of July, 1999. The Farm Bureau cafeteria in Des Moines, operated by Sodexho-Marriott Services, began serving Iowa-grown foods as part of its 1999 summer menu. (Sodexho-Marriott Services is one of the largest food and facilities management service companies in North America.) Other pilot projects in Adams, Audubon, and Johnson counties have raised awareness of and interest in local food systems.
Interest in eating Iowa-grown and processed foods has increased due to these projects and an Iowa Department of Economic Development and Iowa Department of Agriculture and Land Stewardship-sponsored promotional campaign, "A Taste of Iowa." Another promising development was Agriculture Secretary Patty Judges appointment of a Local Food Task Force in the spring of 1999. Its main purpose was to expand local markets for Iowa farmers. A copy of the task forces recommendations, which were released in September, 1999, can be found in Appendix A.
Washington apple growers reexamining local markets
Washington has developed an apple industry that paralleled Iowas own corn and soybean industries in terms of financial support, marketing and promotion, and university research. Today Washingtons apple industry is facing economic hardship just like Iowas corn and soybean industries, in part because of intense price competition from other countries. An increasing number of Washington apple growers tired of low wholesale apples prices are looking at direct consumer sales to obtain a higher price for the apples they grow.29 They are starting with local markets, building new or reestablishing on-farm stands that were abandoned years ago, and using different venues such as the internet to reach new customers directly. Washington apple growers are becoming interested in local food systems as a way to get more of the consumer dollar for the apples they grow.
Suggestions for increasing local sales and consumption of Iowa apples
Pilot projects have demonstrated that there are Iowa consumers, chefs, distributors, and food service managers who are very interested in purchasing more locally grown products, particularly if these products meet their standards for quality, convenience, and price. Although price is important, the pilot projects have shown that chefs and food service managers may purchase a local food item over a lower-priced imported food because of quality, taste, and local community considerations. Given the potential for increased local markets for Iowa producers and the interest in local food systems, Iowa apple growers and other stakeholders in Iowas apple food system may want to consider the following:
- The authors do not suggest that apple growers initially consider increasing acreage and/or the number of apple trees to meet a potential increase in demand for Iowa-grown apples. Rather, growers could examine the economic advantages of improving orchard management as a flexible means to meet any increased demands for Iowa-grown apples. Economic and social questions regarding an available labor force to help growers handle increased demand remain unanswered and need serious consideration.
- Apple growers and supporters of local food systems could survey Iowa consumers to get a better handle on the percentage of Iowans who would favor Iowa-grown apples over those produced elsewhere, even if Iowa apples were priced higher. There is inadequate information on why consumers who currently eat Iowa apples prefer them to apples produced elsewhere, nor is there information on how much more consumers would be willing to pay for Iowa apples than for imported apples.
- Apple growers and local farmers market organizers may want to document why Iowa consumers and food buyers who purchase mostly Washington and other imported apples prefer them to Iowa-grown apples. Growers, farmers market organizers, and others interested in local food systems could determine what changes are needed in the apple food production system to interest these parties in Iowa-grown apples. Are there issues of taste, appearance, convenience, storage, or price that need to be addressed?
- Researchers and educators could survey Iowa apple growers, farmers markets, community supported agriculture projects, chefs, produce distributors, food service managers, and food brokers to understand what sort of infrastructure is needed to efficiently grow, process, and distribute Iowa apples to Iowa consumers through established and new retail and wholesale markets. All obstacles to developing an appropriate infrastructure should be identified. Researchers could collaborate further with small growers to address the food safety issues for apple cider that threaten profitability.
- Apple growers and distributors could reexamine past attempts to develop apple cooperatives and central packing facilities, evaluating what worked and what didnt as an instructional guide to discussing potential for a cooperative and central packing facility focused on the Iowa market.
- Apple growers and the Iowa Department of Agriculture and Land Stewardship could study the success of other state-based marketing programs, such as New Jerseys "Jersey Fresh" program, to determine what could be learned and applied to the "A Taste of Iowa" program that could ultimately benefit growers. Economic analysis of the "Jersey Fresh program indicated that for every dollar invested in the program, approximately $46.90 was returned to the local agricultural economy, and $15.20 in net farm income was generated for local growers.30 The 1997 annual budget for the "Jersey Fresh" program was $1.2 million.
- Apple growers, distributors, university researchers, food service managers, and food retailers could conduct feasibility studies on the potential for niche apple markets for Iowa consumers, including organic apples and reduced pesticide-use apples. Although many Iowa apple growers use integrated pest management practices, apple trees may be sprayed for insects and diseases 10 to 12 times per year.31
- Consumers interested in eating Iowa-grown products can raise interest and provide support by asking for Iowa-grown apples at supermarkets, restaurants, workplace cafeterias, schools, and convenience stores. The taste and variety of Iowa apples are key selling points. Iowa apple growers could collaborate with informed consumers to promote their apple varieties by helping to sponsor apple-tasting events at county fairs, city-sponsored celebrations, and other local gatherings.
Application to and implications for other local food systems in Iowa
The specific activities suggested above make a case for increasing the focus on local food systems for apples. These activities fit well with the recommendations developed by the Iowa Local Food Task Force and are applicable to those involved in production, processing, and distribution of other Iowa-grown fruits, vegetables, and meats. The foods may be different, but many of the steps needed to develop local food systems are the same. Another reason for Iowa to consider local food systems is the states strong agricultural heritage. Unlike states with higher percentages of urban residents, many native urban Iowans are only one or two generations removed from the farm. It may be easier to explain the benefits of local food systems to urban Iowans than to urban residents in other states.
Iowans purchase $8 billion worth of food per year, and about $2.5 billion of this amount is spent in eating and drinking establishments.32 Could Iowa farmers, along with help from state and local agencies, restaurants, and other institutions, grow a higher percentage of the food that Iowans consume? Results from local food system projects in Iowa have been encouraging. More research is needed on how best to establish local food system infrastructures in Iowa that would attract and satisfy consumers, producers, retailers, wholesalers, distributors, food service managers, and chefs.
These potential local markets and revenue streams may add more diverse options for those farmers interested in getting more of the consumers dollar for what they produce. These opportunities may not significantly divert Iowas acreage from corn and soybean commodity production, nor will they alone solve the current economic crisis facing Iowa agriculture. But they may provide opportunities for a number of Iowa producers to add sufficient income to remain on the farm.
Currently, Iowa exports most of the crops it produces and imports most of the food it consumes. The Iowa apple food system described in this paper is a good example of a local food system. The authors hope that the reader will draw parallels from apples to other foods to further explore the potential for local food systems.
Table 1. Comparison of Iowa-grown and Washington-grown Red Delicious apples (for sale and consumption in Iowa)
Most sold retail at apple orchards and farmers markets and consumed in Iowa. May reach an Iowa consumer in as little as one or two days after harvest.
Most shipped wholesale for export to Iowa and other states and countries. May reach an Iowa consumer in as little as one to three weeks after harvest.
Cold storage used to keep most apples fresh for up to two months. Some CA storage used.
Cold storage and CA storage used to keep apples fresh. Apples for "out of season" sales kept in CA storage for eight months or longer
Wax not usually applied
Wax applied to preserve freshness
Simple grading, not USDA standards
Grading meets USDA standards
Migrant labor used
Migrant labor used
No stickers used
Stickers used for apples sold bulk by weight
Most apples purchased within two months of harvest
Apples purchased within a few weeks to eight months or longer after harvest
Table 2. Leading apple-producing countries, 1997
Country Rank Production* China 1 18,009 United States 2 4,639 Turkey 3 2,350 Iran 4 1,925 France 5 1,918 Poland 6 1,900 Russian Federation 7 1,550 Italy 8 1,452 Germany 9 1,400 Argentina and India 10 1,200
Source: World Apple Review, 1998
*(000 metric tons)
(Note: One metric ton equals 2204.6 pounds or 52.5 bushels)
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