When you pay for an apple at the grocery store, you might assume you're paying for a little bit of everything that helped create that apple — fertilizer for good soil, chemicals to keep pests away, workers to tend the trees and pick the fruit.
So it would make sense that rising costs for growers would result in higher sticker prices at the store.
Costs for apple growers have indeed gone up in the past decade, and sticker prices at grocery stores have gone up, too. The average consumer price for a pound of apples has increased from about $1 to $1.80 from 2018 to 2024. With uncertainties over new tariffs imposed by President Donald Trump, prices are poised to continue going up.
But despite rising store prices, the amount growers get paid for their apples has essentially stayed the same for the past seven years — about 70 cents per pound since 2018. That's mostly because the sheer supply of apples in Washington, the nation's top apple producer, is keeping the wholesale price level.
"There's so much competition that the growers themselves don't have the pricing power to pass on their added costs," says Jon DeVaney, president of the Washington State Tree Fruit Association.
That means that as production costs go up, profit margins for Washington's most iconic fruit shrink every year.
In search of higher paying contracts, Washington recently focused on finding new markets for its fruit, such as India, which imported $120 million worth of apples in 2017. But when the deal with India was interrupted by tariffs during Trump's first term, Mexico and Canada became the largest importers of Washington apples.
Now, new tariff uncertainties are disrupting the already skin-tight margins. As trade relations with our northern and southern neighbors grow more volatile, apple exports to Canada and Mexico may decline. If they do, even more fruit could flood American markets — decreasing wholesale prices to growers even further.
Grocery stores, however, still face increasing costs for transportation, power and other operational expenses. They'll likely continue raising prices to cover their own costs.
The resulting ecosystem is one that decreases profits for growers — therefore potentially pushing small farms out of business and driving the consolidation of Big Ag — while groceries continue to get more expensive.
"There's a lot of frustration on the part of consumers who are seeing those higher prices," DeVaney says. "We just think it's very important that they understand that growers are feeling that pain as well, and are not seeing benefits themselves from these higher retail prices."
Washington is the largest U.S. apple producer, growing between 10 billion and 12 billion apples annually. About 30% gets exported, which still leaves at least 7 billion Washington apples competing for space in American produce sections — not to mention competing apples from New York, Michigan or South American countries, and a whole host of other fruits trying to catch shoppers' eyes.
This pressure makes international markets key for growers.
In 2023, Mexico imported almost $200 million worth of apples, about 18% more than the year before. Canada imported $132 million, making it Washington's second-largest apple market in 2023. These countries are especially attractive to growers because` they can truck the fruit over land instead of shipping it across the Pacific Ocean, which is usually more expensive.
Apple exports through the Northwest Seaport Alliance, which operates marine cargo through the Ports of Seattle and Tacoma, took a hit when India put retaliatory tariffs on Washington apples after Trump put a steel and aluminum tariff in place in 2018. Even though those tariffs were lifted in 2023, apple exports to India have not bounced back to pre-tariff levels, says Kate Nolan, communication and outreach manager for the alliance.
Even short-lived tariffs can disrupt contracts and drive hungry importers elsewhere. Recently, China has already started sourcing soybeans from Brazil instead of the U.S. after tariffs went into effect in early April.
"Once that's lost, that's gone," Nolan says. "Even if the tariffs ended tomorrow, [those contracts are] not going to come back overnight."
The U.S. and China agreed to a trade deal that will lower tariffs on each side for 90 days starting May 12, but it could be too late.
The negative effects of tariffs are often delayed and longer-lasting than the tariff itself. The Northwest Seaport Alliance's most recent cargo numbers show that imports at both ports are actually a combined 27.6% higher than they were in April last year. But exports are starting to show signs of slowing, Nolan says, as cross-Pacific contracts are canceled or not renewed.
Widespread tariffs make it hard to find new markets, and as Mexican and Canadian interest in Washington apples shrinks, it could accelerate the transformation of Washington's apple industry. The most vulnerable farmers are the family orchardists who can't weather extreme swings in the market.
"It is the smallest farmers that are under the most pressure and may not be able to survive a disruption as easily as larger farms that might have outside financial backing," DeVaney says. "While the intent was not to favor consolidation in agriculture, a disruption to the system can create an environment where the smaller farmers are least likely to survive." ♦
