A $21 million a year marketing machine for Washington apples is on the verge of being dismantled, which could have a trickle down impact on New York apple growers.
The Washington Apple Commission, one of the nation's oldest and largest commodity marketing programs, is being restructured after its mandatory assessment on growers was struck down in federal court.
New York is the second largest apple growing state, well behind Washington, and the marketing change will reverberate through the industry. But whether changes in the marketplace will make it easier or harder to sell New York apples is uncertain.
"You would think this is going to open up the door for more New York apples in more markets, but that's not necessarily the case," said Jim Allen, president of the New York Apple Association.
Some growers think losing the Washington advertising could hurt the entire industry. The Washington Apple Commission spent a lot of its money on consumer advertising promoting the health benefits of eating apples.
"I don't think there's any question that there is spillover for the entire industry in keeping apples, and the benefits of eating apples, in front of consumers," said Darrell Oakes, who runs the 300-acre LynOaken Farms in Lyndonville.
Growers in Washington paid the commission a mandatory 25-cent fee for each 42-pound box of apples they sold in the 2002-03 season, for a total of $21.5 million.
On March 31, a federal judge in Richland, Wash., ruled that it is an unconstitutional violation of free-speech rights to force apple growers to pay the fee, which is used to support the commission and its promotion of the state's top crop. The commission has since halted its promotional activities.
Last month, Washington growers tentatively agreed to a settlement in which they would pay the commission a mandatory 4-cent fee per box. The money would be used to continue some limited programs that the courts have not deemed illegal.
A settlement conference before a federal magistrate was scheduled to begin today.
New York produced about 650 million pounds of apples last year, although the crop was one of the smallest in decades because of spring frosts.
Washington is the industry giant, producing a crop of 5.3 billion pounds last year.
New York's 674 commercial orchards grow Macintoshes, Galas, Ginger Golds and dozens of other varieties. Many upstate New York orchards are in full bloom this week.
The competitive marketplace for those apples is evolving. Marketing previously done by the commission may now be replaced by disparate campaigns from the state's largest growers and shippers.
"In general, there are going to be good things and bad things that come from this. We're going to have to get into this to see how the money that was being spent is now going to be spent," said Steve Reissen, president of Sun Orchard Fruit Co. in Burt.
For example, the Washington Commission spent millions of dollars each year on trade incentives, essentially payments to large grocery chains to give Washington apples prime shelf space. Some of those promotional payments may go away or be picked up by individual growers and shippers.
The New York Apple Association exists through a similar mandatory assessment on growers, but only has an annual budget of about $1.5 million. Allen said the New York association is much different than the Washington Apple Commission. The New York State Department of Agriculture and Markets collects the assessment and regulates the association.
Even though the state commodity programs are structured differently, the Washington case could ultimately prompt a court challenge to the mandatory assessment on New York growers.
"We're looking at our own marketing order and what repercussions this might have for it," Oakes said, "We feel we stand on very strong ground here."
This report contains material from the Associated Press.