MarketCompass (@FreshWorldBiz) “How Apple Prices Are Determined in North America Apple prices in Canada are driv” — TopicDigg

How Apple Prices Are Determined in North America Apple prices in Canada are driven by the United States, meaning North American apple prices are effectively US prices, and US prices are determined by Washington State, which accounts for approximately two thirds of total production capacity. There is no apple futures market in the US, so market prices are not the result of capital market speculation. Instead, large apple growers, packing houses, and major supermarket chains negotiate long term supply contracts with agreed upon prices, factoring in growing conditions, labor, and energy costs. The purpose is to avoid destructive competition and price disorder. In practice, the entire US vertical supply chain operates under a shared understanding: abnormal price volatility is bad for apple sales and bad for stable orchard operations. As a result, the USDA and industry associations including the Washington State Tree Fruit Association closely monitor spot prices at origin and wholesale prices across regions, publishing them publicly on a daily basis to prevent price manipulation. At the farm level, growers store harvested apples in controlled atmosphere (CA) storage facilities. This functions similarly to China’s historical “Changping Granary” system which is a buffer mechanism designed to prevent supply shortages caused by weather disasters from triggering price spikes, and to store surplus apples during bumper years to prevent price collapses. When I was in the Middle East, I came across a video from Israel showing workers in a field harvesting a type of melon, using perforated boards to measure each melon’s diameter and leaving the undersized ones in the field. The goal was for growers to control market supply and prevent prices from crashing. In the early days of New Zealand’s kiwifruit industry, growers were at the mercy of fruit traders who aggressively pushed prices down, leaving the entire sector operating at a loss. The New Zealand government eventually stepped in to establish a kiwifruit growers’ association, prohibiting individual growers from quoting prices independently those who did so lost the right to use the origin designation. By presenting a unified pricing front, the association secured profitability for growers, generating surplus capital to invest in research, maintain quality, and enforce strict controls on pesticide and fertilizer use. The result is the world-renowned New Zealand kiwifruit brand. When you order fruit juice overseas, you often see “kiwi” right there on the menu. Cutthroat competition has become even more chaotic in the e-commerce era. China’s fresh fruit industry has, in practice, been a process of bad money driving out good. That said, we have also seen a different kind of standard emerge one from the futures market that has brought renewed discipline to the apple sector. Exchange delivery standards have incentivized higher quality apples, creating a clear distinction from substandard fruit that does not meet delivery requirements. This is an important point I raised in the previous piece, and one that futures speculators cannot afford to ignore. That said, not many of my readers are active in apple markets, so that piece did not get much attention. China should, in my view, list oranges and other major fruits on futures exchanges as well, to bring the same kind of regulatory discipline to those sectors. This report is published openly. For more fresh commodity market reports, visit in approximately two months.