The Core of the Problem

Here's one more reason to hate the Snapple lady: the high price of apples.

Apple prices have more than doubled since last year, but what does an ice tea-based beverage have to do with the price of Granny Smiths?

Apple and pear juices are now the neutral sweetener of choice in much of the beverage industry. And with that boom has come a shift in apple economics. It used to be that juice was a secondary market for apple growers; it's where they would send blemished fruit that wouldn't sell fresh.

All that's changed. Apple juice concentrate that was selling for $40 to $70 a ton last year has been going for as high as $220 a ton this year. And when growers figure the break-even point between fresh and juice is $100 a ton, you can guess which way they're tilting.

How much of an effect does that have on the apple market? Preliminary estimates had this year's California fresh harvest (not including juice apples) at about 352 million pounds. The current mid-season estimate has the fresh crop closer to 240 million pounds--a drop of about 30%.

"We have never experienced a crop decline as dramatic as we are facing this year," says Kenton Kidd, president of the California Apple Commission.

Certainly some of that decrease is the result of weather-induced blemishes; after all, the cold, wet weather of last winter and spring was tough on apples. But a report by the California Apple Commission also notes an "abnormally high volume of processing."

Of course, California apples are not the only ones heading for the juicer. Washington State--by far the country's largest apple-producing state--has revised its harvest downward as well, to 2.8 billion pounds from an early projection of 3.5 billion pounds.

As a result, the wholesale price of apples is about 50 cents per pound, as opposed to last year's 20- to 25-cent-per-pound range. At the grocery store, they're showing up at about 90 cents to $1 a pound.

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