Market Watch


Desmond O’Rourke figures another Ambrosia-type development would be amajor bonus.


I


n the global view, B.C. appears well-positioned to ride out the Trump wave, as well as maintain prices on international markets with both its premium apple varieties and its unique cherries, believes Desmond O’Rourke, professor emeritus in agricultural economics at Washington State University and owner of Belrose Inc., a global deciduous fruits market consulting firm in the U.S. He points to B.C.’s innovative cherry breeding program, which has produced some of the world’s best- known new varieties of cherries, as being a huge advantage to growers here.


As well, new apple varieties such as the locally-discovered Ambrosia, give B.C. growers a leg up on the competition in world markets, he says. It’s been a saviour of the industry in B.C., O’Rourke says. What’s needed now, he believes, is another Ambrosia-type variety. With the world apple market stalling the past few years, he points to the Ambrosia variety as the salvation of our industry, along with the fact that the B.C. crop is just a drop in the bucket compared to that of Washington State, in size. Last year’s crop south of the border was in the area of 170 million cartons, compared to B.C.’s three million. With the smaller volume to be marketed, he feels B.C. is in a good position to be able to continue to sell its apples successfully, at good returns, despite slower world markets.


On the other hand, he sees a future where larger-volume producers could be hampered by such eventualities as a sudden shift in China’s fortunes. Currently, it has huge capacity as an importer of fresh sweet cherries, for instance, and premium apples. But, the seven per cent growth rate in that country, with a population of


6


By Judie Steeves Noted marketing expert bullish on B.C.


nearly 1.4 billion today, is not likely to be sustainable as the country continues to go into debt to continue growing, reports O’Rourke. Such growth can only go on for so long, he warns, and yet countries such as Canada, the U.S., Chile and New Zealand are really putting their faith in that market for tree fruit exports. Due to the price of


premium fruit shipped into China, other Asian markets will not be able to take up the slack if the Chinese economy crashes, he advises, because incomes are not high enough for people to be able to afford them.


The premium market is limited, he warns.


While cherry markets are very volatile due to the


Desmond O’Rourke


little fruit’s vulnerability to adverse weather such as frost or rain, O’Rourke notes that B.C. has diversified by opening up overseas markets for its cherries, rather than being completely dependent on being able to send late-season fruit to U.S. markets.


If large U.S. companies such as Stemilt are still selling cherries late in


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the season, B.C. producers are going to see reduced prices for their late- season crop, he notes. B.C. is more likely to get caught at that later end of the season.


This coming year, he’s a little concerned about potential damage to both fruit crops and young trees with what he says has been a very hard winter in Washington State.


With a lot of young trees in the ground, he wonders whether there might be substantial losses, thanks to Mother Nature. Current prices have remained good despite what were very large apple crops throughout North America last year, he reports, and with a strong U.S. dollar, he’s optimistic that will continue.


However, it’s anyone’s guess what will happen with a new leader at the helm in the U.S., and questions about terms of the North American Free Trade Agreement going forward, he notes.


Cross-border trade could be impacted if new U.S. President Donald Trump insists on changes to terms of that agreement, he warns.


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