How 'bout them apples?

The U.S. can't compete with China's cheap labor costs and mega orchards in the global apple trade.

C.M. SennottNovember 11, 2009 08:24Updated May 30, 2010 12:13

A vendor arranges apples at a market in China's Nanjing, Jiangsu province, Oct. 24, 2008. (Sean Yong/Reuters)

HARVARD, Mass. — It was a spectacular fall afternoon here in the heart of New England’s apple country.

Frank Carlson strolled the orchards of his family farm earlier this month and picked a red McIntosh and polished it against his green flannel shirt.

The oak and maples trees in the hills that surrounded us were brush-stroked with orange and red foliage that seemed to burn against a perfect blue sky.

Not a cloud in sight, but for Carlson, who owns Carlson Orchards, which is the largest producer of apple cider in New England, there were storm clouds on the distant horizon.

“They’re killing us,” said Carlson, biting into the apple and between chomps talking about the threat posed to the American apple growers by China’s aggressive campaign to dominate the global apple market.

“They are absolutely killing us,” he added.

In the global trade of apples, China has surged to become the leading producer of apples in the world with the U.S. now dropping to a distant second place.

China’s cheaper labor costs, its planned economy that allows the government to bulldoze huge tracts of land to build mega orchards and a growing international desire for fruits to be available year round in every corner of the world have all conspired against New England family apple orchards like the Carlsons.

Just after we moved into this area, I met Frank and over the years I have been impressed by his grasp of the history of the apple in America and how it came to dominate export markets in Europe and elsewhere. That is, until China began to aggressively overtake the global market. They began 20 years ago by cornering the market in apple juice concentrate and then more recently have surged ahead in the export of apples.

Carlson, whose family has been in the apple business for nearly 70 years, explained that in Europe during World War II many of the apple orchards were destroyed and so the U.S. apple growers developed a huge export market to Europe. Typically, the American growers would send the smaller apples that American consumers did not like and that fared well in shipping. In Europe, the small apples were a staple product.

But today, the New England growers are being boxed out of the European markets by China, which can offer larger apples at smaller prices.

The reason, says Carlson, is cheap labor. He says the Chinese pay their workers less than 50 cents an hour. Frank can’t find local workers with the patience and the expertise to pick seasonally. So he brings two dozen workers on legal work visas from Jamaica. They’ve been coming for more than 20 years and the men are a fixture in town. Carlson’s labor bill ends up at least 20 times what a Chinese orchard would pay. There is just no way he can compete with cheap labor in China and its industrial growing and economies of scale.