Eric Roberts 
In its Industry Outlook 2023 report, USApple, the leading advocate for American apple growers, highlights the ongoing challenges of labor and inflation faced by U.S. fruit growers.
Labor
Over the past five years, there has been a decline of 1.4% in average annual crop production employment, with a significant 22% decrease in apple orchard employment during the same period. In 2013, there were 116,406 certified H-2A positions in the U.S. agricultural sector. By 2022, this number had surged to 371,619, marking a remarkable 219% increase.
Moreover, the minimum compensation rate for H-2A labor has risen by 33% over the last five years, reaching $16.17 per hour. In the top seven apple-producing states, the average stands at $17.19 per hour. In 2023, the highest labor rates were found in apple-producing states, with Oregon and Washington at $17.97 per hour and California at $18.65 per hour. Notably, Michigan, another apple-producing state, experienced the largest year-over-year increase, a substantial $1.97 or nearly 13% rise compared to the previous year’s mandated minimum labor rates.
USApple emphasizes the particular challenges faced by the tree fruit industry, which relies heavily on manual labor due to limited automation capabilities. Labor costs account for an estimated 60% to 70% of variable expenses for apple growers.
Inflation
The cost of apple production has surged by almost 31% over the past year. Key factors contributing to this increase include rising prices for fertilizers, chemicals, fuel, vehicles, and other inputs crucial to apple production. These expenses have grown while the prices received by growers for apples have remained stagnant. From 2013 to 2017, the five-year average farm-gate price for all apples was $0.31 per pound. However, from 2018 to 2022, this price dropped by 2 cents to $0.29 per pound.
During the same period, from June 2022 to June 2023, the average price paid by urban consumers for fresh apples in the U.S. rose by 4.5%. In comparison, the overall food price index increased by 5.7%, while fresh fruit prices saw a 0.3% increase. These dynamics have left consumers perceiving apples as either more or less affordable when compared to alternative food products.
To cope with mounting expenses and flat revenues, the U.S. apple industry has had to improve its efficiency. From 2008 to 2022, the number of apple-bearing acres in the U.S. dropped by approximately 17%. Nevertheless, production managed to increase by around 2%. This trend suggests that while some cost-effective technologies and techniques have been employed to marginally boost yields, most of the gains are attributed to significant investments in the development of higher-density orchards, as stated by USApple.
Disclaimer: The views, suggestions, and opinions expressed here are the sole responsibility of the experts. No Dive Digest journalist was involved in the writing and production of this article.