who wants to just break even?
DESCRIPTION
Who Wants to Just Break Even?. How long will it take for Red Delicious to start making money?. David Allan and David Marshall January 16, 2001. Alternate bearing since 1994, but production appears to be trending downward in deference to other varieties. When will it level off?. - PowerPoint PPT PresentationTRANSCRIPT
Who Wants to JustBreak Even?How long will it take for Red Delicious to
start making money?
David Allan and David MarshallJanuary 16, 2001
Washington State Red Production
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Ca
rlo
ad
s (
10
00
bo
xe
s)
Est
imat
e pe
r Ja
n 1
2001
Sto
rage
Rep
ort
Projections
Source: Yakima Valley Growers & Shippers
Alternate bearing since 1994, but production appears to be trending downward in deference to other varieties.
When will it level off?
F.o.b. Price of Red & Golden Delicious
$0
$4
$8
$12
$16
$20
$24
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Average price Adjusted to CPI 2000
Golds
Reds
Est
Source: Growers Clearing House
Red & Golden Delicious Return per Bin
$0
$50
$100
$150
$200
$250
$300
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Adjusted to CPI 2000
Average f.o.b. price adjusted by percent packout and packing costs as published each year by the GCH.Packout varies from 58% to 87%.Packing Cost varies from $5.68 to $7.25 per box.
Break-even price assumed $120/ bin.
Years below break-even: Reds: 8 out of 13 years Golds:5 out of 13 years
EstReds
Golds
Source: Growers Clearing House
$6
$8
$10
$12
$14
$16
$18
$20
40,000 44,000 48,000 52,000 56,000 60,000 64,000
Pri
ce
pe
r 4
2-l
b. U
nit
(f.
o.b
.)
9496 93
92
9095
91
Price v. Quantity, Red DeliciousWashington Growers Clearing House
(All grades and sizes)
Average price Adjusted to CPI 2000
Source: Growers Clearing House
$6
$8
$10
$12
$14
$16
$18
$20
40,000 44,000 48,000 52,000 56,000 60,000 64,000
Pri
ce
pe
r 4
2-l
b. U
nit
(f.
o.b
.)
98
97 9496 93
92
9095
91
Price v. Quantity, Red DeliciousWashington Growers Clearing House
(All grades and sizes)
Average price Adjusted to CPI 2000
99
A demand shift ??
00
Authors'Estimate
Source: Growers Clearing House
$6
$8
$10
$12
$14
$16
$18
$20
30,000 35,000 40,000 45,000 50,000 55,000 60,000 65,000
Pri
ce
pe
r 4
2-l
b. U
nit
(f.
o.b
.)
98
9794
96 93
92
90
95
91
Price v. Quantity, Red DeliciousWashington Growers Clearing House
(All grades and sizes)
Average price Adjusted to CPI 2000
99
00
Authors'Estimate
2003-05
Authors'Projection
Source: Growers Clearing House
Demand could continue to shift
downward.
Washington State Red Production
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
Ca
rlo
ad
s (
10
00
bo
xe
s)
Cars 56,845 61,408 48,190 55,975 44,052 52,222 41,397 45,394 36,397 40,088 32,397 36,088 31,397 35,088 31,397 35,088
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Assuming a reduction of 2.5 million boxes each year, we will reach economic viability around ’03/05. Later -- if demand is still dropping.
Source: Yakima Valley Growers & Shippers
Washington State Red Production
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
Ca
rlo
ad
s (
10
00
bo
xe
s)
Cars 56,845 61,408 48,190 55,975 44,052 52,222 41,397 45,394 38,397 42,088 35,397 39,088 32,397 36,088 29,397 33,088
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
If Red Growers react slower, and production drops by 1.5 million boxes each year, we wouldn’t get down to profitable levels until 2005 / 2007. Later -- if demand is still dropping.
Source: Yakima Valley Growers & Shippers
R2 = 53%
R2 = 45%
$6
$8
$10
$12
$14
$16
$18
$20
40,000 44,000 48,000 52,000 56,000 60,000 64,000
Pri
ce
pe
r 4
2-l
b. U
nit
(f.
o.b
.)
98
97 9496 93
92
9095
91
Price v. Quantity, Red DeliciousWashington Growers Clearing House
(All grades and sizes)
Average price Adjusted to CPI 2000
99
00
Authors'Estimate
Source: Growers Clearing House
R2 = 13%
$5.00
$10.00
$15.00
$20.00
$25.00
12,000 13,000 14,000 15,000 16,000 17,000 18,000
Pri
ce
pe
r 4
2-l
b.
Un
it (
f.o
.b.)
98
97
94
96
93
92
90
95
91
Price v. Quantity, Golden DeliciousWashington Growers Clearing House
(All grades and sizes)
Source: Growers Clearing House.
Average price Adjusted to CPI 2000
99
00 Proj.
Source: Growers Clearing House
Old Red Crop Shipments
1998-99 Crop1999-00
Crop
Total Shipments 52,222 41,397
Shipped After Sep 1 of New 1,695 3.2% 2,282 5.5%
Source: Yakima Valley Growers & Shippers
R2 = 65%
$10.00
$12.00
$14.00
$16.00
$18.00
$20.00
$22.00
$24.00
4,000 5,000 6,000 7,000 8,000 9,000
Pri
ce
pe
r 4
2-l
b.
Un
it (
f.o
.b.)
9897
94
96
93
92
90
95
91
Price v. Quantity, Granny SmithWashington Growers Clearing House
(All grades and sizes)
Source: Growers Clearing House.Average price Adjusted
to CPI 2000
99 00 Proj.
Source: Growers Clearing House
R2 = 83%
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
$50.00
$55.00
$60.00
0 1,500 3,000 4,500 6,000 7,500 9,000 10,500 12,000 13,500
Pri
ce
pe
r 4
2-l
b.
Un
it (
f.o
.b.)
9897
94
96
93
92
95
91
Price v. Quantity, FujiWashington Growers Clearing House
(All grades and sizes)
Source: Growers Clearing House.Average price Adjusted
to CPI 2000
9900 Proj.
Source: Growers Clearing House
R2 = 86%
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
0 2,000 4,000 6,000 8,000 10,000
Pri
ce
pe
r 4
2-l
b.
Un
it (
f.o
.b.)
9897
94
9693
92
95
91
Price v. Quantity, GalaWashington Growers Clearing House
(All grades and sizes)
Source: Growers Clearing House.Average price Adjusted
to CPI 2000
99
00 Proj.
Source: Growers Clearing House
Total U.S. Apple Production, by Variety
Red43%
Goldens15%
Granny7%
Fuji2%
Gala2%
McIntosh5%
Rome6%
Empire1%
Other19%
1993: 254.4 million boxes
Source: US Apple, 1998
Total U.S. Apple Production, by Variety
Red35%
Goldens14%Granny
8%
Fuji8%
Gala6%
McIntosh4%
Rome5%
Empire2%
Other18%
2000: 254.2 million boxes
Source: US Apple, 2000
Total U.S. Apple Production, by Variety
Red21%
Goldens10%
Granny8%
Fuji6%Gala
6%McIntosh
3%
Rome3%
Empire2%
Other10%
31%
2008 or 2009: 175.2 million boxes (4% annual reduction)
Source: Pure Speculation
WHAT IF WE REMOVED…36% of the Red Production20% of the Gold production50% of the Rome and McIntosh, 50% of the 'other' varieties, especially those grown for processing. ?????
WHAT WILL WHAT WILL FILL THE FILL THE HOLE?HOLE?
Market Share of Washington Grown Apple Varieties, 1920-1999
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1920 1930 1940 1950 1960 1970 1980 1990
Crop Year
Pe
rce
nt
of
To
tal P
rod
uc
tio
n
Granny
Fuji
Braeburn
Golden DeliciousWinesaps
Red Delicious
Standard Delicious
Gala
Source: Growers Clearing House
Contact Info:David Allan3630 Lateral BWapato, WA [email protected]
David Marshall408 North First StreetYakima, WA [email protected]
Copies of this material are available upon request. This Power Point presentation can be downloaded at:
http://www.agrimgt.com/newsletters.htm
