A Brief History of Apples
There might not be any single crop with deeper connections to human culture and history than apples. Touted for millennia for their diversity, health benefits, and sweet flavors, apples have transformed civilizations, they’ve transformed and reinvented themselves many times, and they figure centrally in America’s culture. We’re all familiar, for example, with the iconic American frontiersman John Chapman, better known as “Johnny Appleseed”.
Today, apples are the #1 fruit consumed in the US and are grown commercially in at least 32 states; the US trails only China on the list of leading global producers. And still, the path to that ubiquity in our culture and diet has been a fascinating, circuitous one involving thousands of years of change. Fortunately, that story culminates in a present-day picture that makes apple farming one of the most compelling styles of agriculture in the US.
Let’s take a minute to explore apples’ origins, diversity, production styles and economic outlook together, and showcase why land planted in apple orchards represents such a great opportunity for farmland investors.
Origins: From Central Asia to the Americas
The ancestor of the modern apple is a species of fruit tree of the scientific name Malus sieversii, native to the Tien Shan mountain range of Kyrgyzstan and Kazakhstan in central Asia. The fruit of these wild apples figured prominently in the cultures and cuisines of the region – notably, Kazakhstan’s largest city of Almaty was formerly known by its Russian name “Alma-Ata” which loosely translates to “Father of Apples”, and its culture still bears many hallmarks of this heritage.
Over thousands of years of breeding and cross-pollination with secondary genetic contributors, such as wild crabapples, Malus sieversii has been gradually transformed into the species Malus domestica, which represents most of the varieties of apple that we see grown on commercial farms and sold in grocery stores. Still, even Malus domestica’s genetic diversity is immense – it’s genome was first sequenced in 2010 and was found to contain approximately 57,000 unique genes. Put another way, it is the most diverse plant genome ever studied, and contains approximately 21,000 more unique genes than the human genome!
By the first millennium C.E., the apples of the Tien Shan were among the most significant mercantile discoveries by incoming travelers to the region from the west along the Silk Road. Gradually, both the fruit and the trees themselves made their way throughout western Europe, and by the early 1700’s, European colonists brought apples to the Americas.
In the US, apples expanded rapidly throughout the country’s first century of independence, driven in large part by the work of the aforementioned John “Johnny Appleseed” Chapman, who established apple nurseries in many states including Pennsylvania, Ohio, Virginia, Indiana and Illinois. Thanks to his evangelism of the crop, at one point, the US alone was home to an estimated 7,500 different varieties of apples. Thomas Jefferson even cultivated apple trees on his Monticello estate.
Apple production in the US has evolved greatly since the early 1800’s, and the diversity of apples present in grocery stores and farmers markets has ebbed and flowed as the nation’s agricultural economy has evolved. To get an idea, let’s look at where production stands today and how some of this evolution – of the market and the fruit itself – has taken place.
The US Apple industry is among the nation’s most important agricultural sectors
Today, according to the trade association US Apple, over 5,000 producers operate commercial apple orchards across at least 32 US states, at a total planted area of roughly 322,000 acres. Collectively, these producers harvest roughly 240 million bushels of apples annually, which fetch a combined wholesale value of over $5 billion. Every year, about 20% of that value is exported and the rest consumed domestically. Of domestic consumption, about two-thirds of apples are consumed as fresh fruit and the rest as processed apple products – applesauce, apple butter, ciders, and canned apple products, to name a few.
While total production volume has been fairly stable for the last several decades, the economic value of the crop has increased substantially during that same period, more than doubling since the turn of the millennium and continuing to project upward as consumers’ tastes shift in favor of eating more and more fresh fruit. Though macro-level forces such as population growth do explain some of this change, underlying this increase in total crop value is an accelerating change in the specific varieties of apples leading the way in the market.
The explosion of industrial agriculture in the US during the mid-20th century had reduced commercial apple farming to a very narrow focus on a small list of varieties, such as the Red Delicious, Granny Smith, and McIntosh. These apples still are cornerstones of US production, but as fresh fruit has become a more popular snack food category, the popularity of these varieties – which were bred mainly for yield, fruit size and color rather than flavor – has started to fade. In particular, younger consumers are driving demand for “premium” varieties that are popular as snacks, such as Gala and Honeycrisp.
Still, while there has been some churn in the specific varieties that command the biggest market and the best price, the overall domestic apple market in the US has remained extremely strong and projects to get stronger yet. New innovations in breeding and marketing of new varieties – Honeycrisp being perhaps the best example – are driving continued growth in the value of the crop. Furthermore, domestic production in the US is crucial to the health of the overall market: According to the US Agriculture Marketing Resource Center, apples imported from abroad account for only roughly 6% of US apple consumption.
Apple Orchards: Favorable environments and styles of production
Apple farming’s popularity and wide geographic reach in the US has been enabled by apples’ ability to thrive in a variety of conditions. That said, most apple production in the US is concentrated in northern latitudes, given the trees’ requirement for the annual chill of winter to set their blossoms and produce fruit each year. Today, the top states by total production are Washington, New York, and Michigan; harvest seasons begin as early as July and as end as late as November, with the “peak” season typically occurring in October.
Apple trees can survive in a range of soil types from gravelly sands to clays, but perform best in soils that are well-drained and high in organic matter. The root systems of apple trees tend to be shallow, meaning that soils rich in organic matter, because of their typically superior structure and water holding capacity, can provide better uptake of water by the trees regardless of whether the water arrives through irrigation or rainfall. In order to further augment water holding capacity, many apple farmers will sow grasses or other low cover crops between rows of apple trees. Still, waterlogging or poor soil drainage can be harmful to the crop, causing blights such as crown rot and severely impacting yields, making water management a crucial aspect of successful apple production.
As with most permanent crops, apple trees also take a while to mature. “Dwarf” varieties usually won’t reach their full productive capacity until 5-7 years after planting, and taller “standard” trees will take even longer. For added flexibility in production, most orchard managers will therefore maintain and vary their crop through the use of grafting – a technique by which a cutting or “scion” of a tree that the farmer wants to produce fruit can be joined to an already-mature rootstock. Beyond allowing the farmer to maintain a stand of trees at various stages of maturity and productivity, grafting also provides other key agronomic advantages. Most mature apple trees will not come “true to seed” – in fact, the seeds from many commercial apples are inert – so grafting can allow breeders to raise cuttings that farmers can employ without needing to raise a tree from seed in the first place.
Modern-day apple farming: A shift from mass-production to breeding and marketing for flavor and diversity
The 21st century is seeing a re-birth of diversity in both apple production and consumption in the US, as well as in research and breeding of apple varieties.
Much of this re-birth stems from the consumer trends we alluded to earlier – but these trends go well beyond “mainstream varieties” like the Honeycrisp. In fact, almost every year, there is at least one new variety that hits grocery store shelves with a huge marketing campaign behind it. Last year, a relative of the Honeycrisp called the “Cosmic Crisp” was even featured on NPR as the holiday season approached.
But beyond consumer trends, heirloom varieties of apples are garnering well-deserved interest among scientists and farmers alike for the inherent value of their genetic diversity. As with any type of agriculture, apple orchards will be increasingly threatened by the agroecological impact of climate change. Temperatures will grow more extreme, and weather patterns will be more unpredictable – both posing a threat to apple crops that genetic diversity can help withstand.
For example, Apple trees need to flower in order to set fruit early in their growing season, which means that unseasonably late frosts or snows can decimate harvests if they cause trees to lose their blossoms. One potential use of apples’ inherent genetic diversity is to breed hardier varieties by introducing genes from apples adapted to warmer climates – and that would remain dormant during brief early warm spells before flowering. Beyond controlling the timing of flowering, apples’ hardiness to classic diseases like crown rot, fire blight, apple scab and leaf spot can be improved through reintroducing genes from heirloom or wild varieties.
Conserving the genetic diversity of apples has become a major priority in the scientific and conservation communities, both in the US and abroad. The USDA’s Agricultural Genetic Resources Preservation Center in Fort Collins, CO is just one of various “seed vaults” around the world stowing away seeds from as great a diversity of wild and heirloom apple varieties as scientists can find. Scientists are even making expeditions back to the Tien Shan mountains in search of genetic resources they have yet to recapture, and the urgency around this objective is growing. The IUCN has even recognized Malus sieversii as a vulnerable species, due to climate change and to deforestation in its native ecological range.
Additionally, devoted farmers and consumers are increasingly finding ways to celebrate and market apples’ vast diversity. Seasonal cultural events focused on the apple harvest are common across the US, especially in leading production regions – Ithaca NY’s Apple Festival and the Rare Apple Tasting in Santa Cruz, CA are two great examples. Meanwhile, farms and nurseries like Scott Farm in Dummerston, VT and Fedco Trees in Clinton, ME are specifically emphasizing the conservation of ancient diversity in apples through the production of heirloom varieties for exclusively local consumption.
Apple orchards represent a promising investment opportunity
The combination of the increasing diversity of marketable apple varieties, the strong position of the US apple industry and the increasing economic value of the apple crop makes a very compelling case for apple orchards as an investment opportunity. Better yet, this opportunity will likely improve even further given two additional forces – the advent of the organic market for apples, and the ability of farmers to take advantage of value-added opportunities.
The US is already the global leader in production of certified-organic apples, despite that organic production only occupies about seven percent of the country’s current planted apple acreage. This share figures to increase given the strength in the growth of the organic fresh fruit market. According to a recent article by The Packer, a leading produce industry publication, apples led the way among all certified organic fruit in terms of dollar sales value in 2019, growing at 4-5% annually, with much of that growth focused on the “premium” varieties being sought by younger consumers. Additionally, apple orchards can add a tourism component to their revenue by allowing visitors to pick their own apples, and can also pursue niche markets for certain varieties such as specialty cider apples.
All the above trends tie back very well to a key component of good farmland investing, which is solid cash returns to farmland. Apples’ economic outlook, diversity, and evolving market give us confidence that their production and value will remain strong and continue to get stronger.
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Disclaimer: FarmTogether is not a registered broker-dealer, investment adviser or investment manager. FarmTogether does not provide tax, legal or investment advice. This material has been prepared for informational and educational purposes only. You should consult your own tax, legal and investment advisors before engaging in any transaction.