ARI SHAPIRO, HOST:
The U.S. is overflowing with apples. In fact, this season, for the second year in a row, the government will help growers out and make a record-setting purchase of apples. Darian Woods and Alan Jinich of The Indicator explain why there is an excess of apples.
DARIAN WOODS, BYLINE: John Brugier grows apples in the hills of Central Virginia, where his family started planting trees almost 200 years ago.
JOHN BRUGIER: Unfortunately, the rural part of Virginia where we're from - we have excess supply of tree fruit and just simply not enough demand.
ALAN JINICH, BYLINE: In a typical year, around 3% of American apples go unsold. That's around 350 million pounds left to rot. But if you zoom into John's neighboring state, West Virginia, around 50% of their harvest was sitting on the trees without buyers. And that's because the processing companies that normally buy these apples and turn them into applesauce and apple juice have lots of apples left over from last year.
WOODS: These apples can be stored up to a year in what's called controlled atmosphere storage. These are like giant refrigerators without oxygen. Because apples have become abundant and cheap, these big commercial operations have been buying while the buying is good.
JINICH: To learn more about what's happening in the Apple industry beyond Appalachia, we spoke with Karina Gallardo. She's a professor of economics at Washington State University.
KARINA GALLARDO: The profits that have been realized by the apple growers in the last 20 years have been consistently decreasing and especially these past years - right? - as the volume of production increases. Moreover, the domestic consumption in the United States has stayed stagnant.
WOODS: So as apple yields go up with stagnant consumption, the price of apples has been going down, in particular what's called the farm-gate price, which is what growers receive. Over the past year, this farm-gate price has dropped more than 50% on some varieties of apples. But the price people actually pay at the supermarket has dropped a lot less at only 13%.
JINICH: This is why more and more family businesses are selling land, consolidating or being absorbed by investment corporations.
WOODS: But all is not lost. The federal government is stepping in to help create a market for these apples, at least in the short term. It's doing it through the Farm Bill, more specifically with something called Section 32.
JINICH: And there are Section 32 purchases every year for commodities like potatoes, fish, meat, whatever happens to be in surplus. The idea is to purchase the surplus, keep the growers in business and then donate the produce to people in need.
WOODS: But over the past two years, Section 32 purchases for apples have topped more than $100 million, which is the most money the government has ever spent on apples. It's an indicator of how desperate growers are to find a market. So, Alan, was John able to sell any of his apples to the government?
JINICH: Well, he's not exactly sure.
BRUGIER: I may sell to the distributor who got the grant money to do that, but I haven't received one directly.
JINICH: Since farmers like John aren't selling directly to the USDA, they're not receiving the best price. In any case, John doesn't want to depend on the government to get by.
BRUGIER: As an entrepreneur, I think it's a bad business plan to rely on any government, state or local or federal.
JINICH: And for John, that means cutting down his orchards from a hundred acres to less than 40. John is diversifying his land use to become more resilient.
BRUGIER: We went from tobacco in the 1700s. We went to apples in the 1800s and stayed into the 1900s. Now we're in the 2000s, and who knows what the future may hold?
JINICH: Alan Jinich.
WOODS: Darian Woods, NPR News. Transcript provided by NPR, Copyright NPR.
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