Annual Report 2012

October 31

st, 2012

Vision

Ontario Apples…a healthy consumer… a healthy industry.

Mission

To foster a viable apple industry through advocacy with government and collaboration

with industry partners for the health of consumers and the wealth of producers.

Cover photo courtesy of Ontario Farm Fresh

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ONTARIO APPLE GROWERS NINTH ANNUAL REPORT

October 31, 2012 COMMENTS FROM THE CHAIR It’s been a year like no other, at least not since 1945. Incredibly warm March temperatures brought our trees out of dormancy far too early only to be decimated by freezing temperatures in April and May. Growers did what they could to save their crops but, in most cases, could only watch as the blossoms turned brown and an estimated 80 - 85% of the 2012 apple crop withered away. The OAG came out strong and early with our message to the media and consumers were very interested in the story. There was definitely a ‘media frenzy’ in May with numerous print and on air interviews.

We met with Minister McMeekin and Ministry staff to discuss the problem and formally requested an AgriRecovery assessment. The assessment was completed and submitted to both the federal and provincial Agriculture Ministers on September 7, 2012. There is no doubt that a disaster has occurred, the key question is, “Are there significant support gaps in the current programs?” As of the printing of this Annual Report, we are still awaiting word on funding for our apple farmers. Government Relations Along with requesting AgriRecovery funding for Ontario’s apple farmers, we have requested that the 2012 yield be removed from the production insurance six-year calculation and that 2013 premium rates remain at 2012 levels. These requests require Ministerial approval and are vital to ensure that coverage decreases and premium increases are buffered. The OAG Risk Management Committee has presented a priority list of recommended changes for the Ontario apple production insurance plan (details on page 15). These items are currently under review with Agricorp and we look forward to affecting positive change to the plan that reflects our evolving sector. We continue to press government on the need for an Ontario Orchard Revitalization Program. A program of this nature would include infrastructure expenses such as irrigation, wind machines, frost fans, hail netting and more profitable planting systems. This program is still very much an OAG priority and we continue to stress the ongoing economic benefit and overall value to Ontario. The OAG contributes on many committees and organizations which include: Ontario Fruit and Vegetable Growers’ Association, Canadian Horticultural Council (including the national CHC Apple Working Group), Horticultural Value Chain Round Table, Ontario Agricultural Commodity Council and President’s Council. Despite many consultations with industry, significant changes to the suite of business risk management programs will be implemented for the 2013 crop year. Details of Growing Forward 2 are emerging. The province has announced that the Self-Directed Risk Management (SDRM) Program will continue and this is a positive program for horticulture. Our relationship with both levels of government doesn’t just include BRM and other support programming. Issues such as labour, water and crop protection materials are most recently at the forefront of Board activities. Research and Development Over the past several years, we have been fortunate to have had Farm Innovation Program (FIP) funding. This funding ended October 1st, 2012. Projects undertaken with this funding included the development of AppleTracker.com – an online crop management tool to assist growers with food safety initiatives and recordkeeping. There is no cost to OAG members to use this web-based

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system. Also funded was a project illustrating the cost savings of using orchard platforms and the workshops on optimizing your sprayers’ efficiency and effectiveness. Further details on all the research projects undertaken by the OAG and our research partners are included later in this Annual Report. The Remote Storage Lab in Simcoe continues to be fully utilized on apple related projects – both provincial and national in scope. The OAG extends their thanks to Dr. Jennifer DeEll, OMAFRA Post- Harvest Specialist, and the Norfolk Fruit Growers’ Association for their continued support and assistance. It is a primary focus for your Board to leverage “to the max” OAG grower seed money to ensure that needed research is undertaken. My thanks are extended to Research Chair, Cathy McKay, and the other members on the Research Committee for their work on these important issues. Generic Promotion The OAG continues to work closely with Foodland Ontario to promote ‘Buy Local’ and Ontario apples. We are very appreciative of the government’s commitment to Foodland Ontario. It is a shining star in promotional programs that is the envy of other jurisdictions. In winter 2011, the OAG promotional campaign “Fight the Winter Blues with Ontario Apples” was very successful in continuing to educate consumers about the health benefits and versatility of Ontario apples. We thank the Apple Marketers’ Association of Ontario and the Ontario Fruit and Vegetable Growers’ Association for their funding towards these PR initiatives. Juice Apple Pricing In August 2011, a two-year agreement was made with the processors at 5.75 cents/lb. FOB the farm gate. Given the crop disaster this year, there was a definite lack of grounder juice apples. Golden Town Apple Products offered an additional incentive of 4.25 cents/lb. for any available juice apples for the harvest season this year. In conclusion, I would like to take this opportunity to recognize the Agricultural Adaptation Council, AAFC, Pest Management Centre and OMAFRA for their support and funding under the Farm Innovation Program (FIP), and Canadian Agricultural Adaptation Program (CAAP). My sincere thanks go to all the directors and committee members for their support and participation again this year. We also appreciate the efforts of those growers who, while not Directors, provide the apple perspective to various organizations – they include Brad Oakley (ACC Farmers’ Financial), John Ardiel (FARMS and CanAg), Steve Versteegh (FARMS). Thanks also to Charles Stevens for his efforts as Vice-Chair. A special thank you to Kelly Ciceran, OAG Manager, for all of her efforts on our behalf. Thank you also to Larissa Osborne, Sylvana Lagrotteria, Maureen Connell and Adrian Huisman who all provide valuable assistance to our organization. This is certainly a production year that we all hope is never repeated. For those with apples, prices hit an all-time high and I remain hopeful that moving forward we will be able to maintain a percentage of the increase. It is needed to offset increasing establishment and production costs. 2013 will be challenging financially for many of us but I am confident that Mother Nature will be more cooperative in the year ahead. All the best. Respectfully submitted,

Brian Gilroy Chair

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NINTH ANNUAL REPORT OF THE ONTARIO APPLE GROWERS

CROP AND MARKET REVIEW Crop Estimates The information presented in this report is based on both grower and marketer surveys. We have had excellent cooperation again this year from both groups and believe the statistics are a fair reflection of the crop and marketing results. The final 2011 apple crop estimate was up 20.7% over 2010. The preliminary November 2012 estimate (page 4) indicates that the 2012 crop is down 81.7% from 2011. Marketing Survey The results of the 2010 and 2011 marketing surveys are included on page 9. The survey provides the industry average returns per pound and per bin (820 lbs.) by variety and represents the prices for 100% of the apples in the bin, not just those for the fresh market pack out. With this information, growers and packers can now compare their results with the average. This information also provides valuable information for government programming. Tree Census Tree census information (as of December 31st, 2011) is included on pages 10 and 11. This information is based on Agricorp’s GPS mapping and information on total acreage provided by Statistics Canada. Agricorp continues to manage the ADaMS system for the OAG. The system provides reports on plantings by age, by variety and by district for all OAG members. Statistics Canada estimated that there are a total of 15,827 acres in Ontario. The assumption has been made that the variety mix for the remaining acres were about the same as for those that were mapped. Storage Holdings The OAG continues to collect storage holdings for the industry. As always, individual storage holder data is kept confidential. Similar information is collected in other apple producing provinces. This information is entered into AAFC’s InfoHort system and published on their website. The OAG summarizes the Canadian data and combines it with similar statistics on the U.S. crop and provides it to the marketers, storage holders and our grower members. The OAG thanks all the storage cooperators for their excellent participation.

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APPLE INDUSTRY STATISTICS

ONTARIO APPLE PRODUCTION 2007 TO 2012

Production % Change

From

('000 lbs) Previous Year

2007 494,984 28.8%

2008 373,244 -24.6%

2009 392,384 5.1%

2010 299,168 -23.8%

2011 361,048 20.7%

2012 est. 63,203 -82.5%

5 Yr Avg (’07–‘11) 384,166 -

Source: OAG Annual Apple Yield Estimate Survey

PRELIMINARY 2012 APPLE CROP ESTIMATE As of November 19th, 2012

Varieties

November 2010

Production ('000 lbs.)

November 2011

Production ('000 lbs.)

November 2012

Production ('000 lbs.)

% Change 2012 vs.

2011

Other Early Varieties 5,263 5,136 1,484 -71.1%

Ambrosia 1,213 1,609 737 -54.2%

Cortland 5,247 6,512 2,566 -60.6%

Crispin/Mutsu 4,946 5,481 543 -90.1%

Empire 51,103 54,054 2,378 -95.6%

Fuji 1,018 1,284 139 -89.2%

Gala 10,599 12,962 4,277 -67.0%

Golden Delicious 9,352 11,568 2,973 -74.3%

Honeycrisp 3,118 10,884 3,080 -71.7%

Idared 15,850 18,372 3,031 -83.5%

Jonagold 3,620 3,547 1,398 -60.6%

McIntosh 66,476 81,530 12,556 -84.6%

Northern Spy 39,416 50,024 12,806 -74.4%

Red Delicious 26,866 27,902 4,213 -84.9%

Spartan 7,445 7,475 2,631 -64.8%

Other Late Varieties 1,582 6,100 2,220 -63.6%

Total Fresh 253,114 304,440 57,033 -81.3%

Juice 46,054 56,608 6,170 -89.1%

All Varieties 299,168 361,048 63,203 -82.5%

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2011 ONTARIO APPLE MARKETING SURVEY RESULTS

PRODUCTION (LBS.)

2011 2010 2011 2010 2011 2010 2011 2010

Ambrosia 1,604,547 1,210,654 4,293 2,346 1,608,840 1,213,000

Cortland 6,375,029 4,997,874 137,102 249,126 6,512,131 5,247,000

Crispin (Mutsu) 5,295,094 4,595,837 186,336 350,163 5,481,430 4,946,000

Early Varieties 4,883,617 4,868,463 252,035 394,537 5,135,652 5,263,000

Empire 49,955,914 49,314,169 4,097,772 1,788,831 54,053,686 51,103,000

Fuji 1,187,287 1,018,000 96,360 0 1,283,647 1,018,000

Gala 12,828,248 10,575,701 134,507 23,299 12,962,755 10,599,000

Golden Delicious 9,830,533 7,815,147 1,737,891 1,536,853 11,568,424 9,352,000

Honeycrisp 10,846,007 3,118,000 37,993 0 10,884,000 3,118,000

Idared 15,251,998 14,138,386 3,120,002 1,711,614 18,372,000 15,850,000

Jonagold 3,208,578 3,592,960 338,820 27,040 3,547,398 3,620,000

McIntosh 72,671,344 56,756,337 8,858,656 9,719,663 81,530,000 66,476,000

Northern Spy 29,484,558 23,480,704 20,539,234 15,935,296 50,023,792 39,416,000

Red Delicious 27,532,199 26,561,623 369,801 304,377 27,902,000 26,866,000

Spartan 7,111,486 6,813,809 363,209 631,191 7,474,695 7,445,000

Other Late Varieties 4,969,778 564,618 1,130,222 1,017,382 6,100,000 1,582,000

Total 263,036,217 219,422,282 56,607,910 46,054,661 41,404,233 33,691,718 361,048,360 299,168,661

VarietyFresh Orchard Juice Non-Juice Total Fresh and Non-Juice

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GROWER PRICE ($/LB)

2011 2010 2011 2010 2011 2010 2011 2010

Ambrosia 0.424 0.363 0.104 0.100 0.423 0.363

Cortland 0.235 0.221 0.103 0.100 0.232 0.215

Crispin (Mutsu) 0.220 0.153 0.103 0.105 0.216 0.150

Early Varieties 0.242 0.212 0.103 0.085 0.235 0.202

Empire 0.209 0.187 0.104 0.100 0.201 0.184

Fuji 0.228 0.213 0.103 0.105 0.219 0.213

Gala 0.252 0.231 0.103 0.100 0.251 0.231

Golden Delicious 0.225 0.193 0.103 0.105 0.207 0.179

Honeycrisp 0.614 0.470 0.103 - 0.612 0.470

Idared 0.191 0.145 0.161 0.131 0.186 0.143

Jonagold 0.225 0.184 0.103 0.105 0.214 0.184

McIntosh 0.187 0.165 0.103 0.100 0.177 0.155

Northern Spy 0.220 0.256 0.178 0.176 0.203 0.224

Red Delicious 0.180 0.192 0.103 0.100 0.179 0.191

Spartan 0.223 0.214 0.103 0.100 0.217 0.204

Other Late Varieties 0.262 0.252 0.108 0.100 0.234 0.154

Avg. Grower Price -

All Utilization ($/lb) 0.224 0.196 0.058 0.050 0.145 0.138 0.189 0.167

Avg. Transaction -

All Utilization ($/lb) 0.295 0.261 0.058 0.050 0.163 0.156 0.243 0.217

Variety

Average Fresh and

Non-Juice ($) Non-Juice ($)Orchard Juice ($) Fresh ($)

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GROWER VALUE $

2011 2010 2011 2010 2011 2010 2011 2010

Ambrosia 680,253 439,702 448 235 680,700 439,937

Cortland 1,495,953 1,102,646 14,053 24,913 1,510,006 1,127,558

Crispin (Mutsu) 1,166,224 703,593 19,118 36,767 1,185,342 740,360

Early Varieties 1,181,842 1,030,522 25,834 33,536 1,207,676 1,064,057

Empire 10,453,198 9,240,143 424,575 178,883 10,877,773 9,419,026

Fuji 271,262 217,051 9,877 - 281,139 217,051

Gala 3,238,557 2,447,509 13,787 2,330 3,252,344 2,449,839

Golden Delicious 2,213,598 1,512,036 178,134 161,370 2,391,732 1,673,406

Honeycrisp 6,661,185 1,466,563 3,894 - 6,665,079 1,466,563

Idared 2,914,447 2,043,663 501,444 224,143 3,415,890 2,267,806

Jonagold 722,771 661,437 34,729 2,839 757,500 664,276

McIntosh 13,554,268 9,360,536 909,928 971,966 14,464,196 10,332,502

Northern Spy 6,484,695 6,022,094 3,654,952 2,803,378 10,139,647 8,825,472

Red Delicious 4,946,603 5,103,083 38,005 30,438 4,984,608 5,133,520

Spartan 1,588,396 1,456,234 37,229 63,119 1,625,625 1,519,353

Other Late Varieties 1,304,068 142,484 122,008 101,738 1,426,076 244,222

Total Grower Value 58,877,319 42,949,296 3,254,955 2,302,733 5,988,013 4,635,655 68,120,287 49,887,683

Total Transaction Value 77,652,153 57,343,819 3,254,955 2,302,733 6,733,289 5,242,106 87,640,397 64,888,658

Fresh ($)Variety

Orchard Juice ($) Non-Juice ($)Total Fresh and

Non-Juice ($)

Notes:

1. The above marketing data is based on a survey of six major Ontario apple marketers. 2. Juice production is estimated and is now being reported as a total of the crop versus by variety as there is no way to determine the actual volume by variety. 3. Orchard juice price per lb. does not include sort outs (pack line culls) or handpicked apples for juice. 4. Transaction price for non-juice uses an historical factor of 1.8 cents added to the grower non-juice price. 5. Based on the survey results, variety mix for the entire crop may vary from the sample. 6. Total transaction value for fresh is determined using the combined bag and tray net return (before grower deductions) and takes into consideration the total

pack out percentage from the 2010 marketer’s survey.

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APPLE MARKETING SURVEY 2011 CROP – SUMMARY

2011 2011 2010

Combined

(Bag+Tray)

Other

Deductions

INDUSTRY

AVG.

INDUSTRY

AVG.

INDUSTRY

AVG.

Variety Total lbs

Graded

Total lbs

Packed

Fresh

Total

Pack Out

%

Return

/lb.

Bin Rental

/lb.

Freight to

Packer /lb.

Storage

(includes

1MCP &

Dipping)

/lb.

Juice

Factor For

Culls (+/-)

/lb.

Non-Juice

Factor for

Culls (+/-) /

lb

Net Return

/lb.

Total Fruit

Delivered

For Fresh

Net Return

/820 lb Bin

Total Fruit

in the Bin

Net Return

/820 lb Bin

Total Fruit

in the Bin

1 2 5 16 17 18 19 20 21 22 22 22

Ambrosia 2,380,236 1,984,467 83% $0.592 $0.012 $0.014 $0.051 $0.048 $0.048 $0.424 $348 $298

Cortland 3,250,917 2,525,435 78% $0.387 $0.012 $0.014 $0.051 $0.048 $0.048 $0.235 $192 $181

Crispin (Mutsu) 3,519,801 2,377,810 68% $0.417 $0.012 $0.014 $0.051 $0.048 $0.048 $0.220 $181 $126

Early Varieties 4,649,720 3,725,162 80% $0.386 $0.012 $0.014 $0.051 $0.048 $0.048 $0.242 $198 $174

Empire 23,836,895 17,807,625 75% $0.367 $0.012 $0.014 $0.051 $0.048 $0.048 $0.209 $172 $154

Fuji 1,853,411 1,201,543 65% $0.445 $0.012 $0.014 $0.051 $0.048 $0.048 $0.228 $187 $175

Gala 22,919,932 18,914,750 83% $0.389 $0.012 $0.014 $0.051 $0.048 $0.048 $0.252 $207 $190

Golden Delicious 7,688,999 5,505,090 72% $0.396 $0.012 $0.014 $0.051 $0.048 $0.048 $0.225 $185 $159

Honeycrisp 8,168,105 6,475,720 79% $0.859 $0.012 $0.014 $0.051 $0.048 $0.048 $0.614 $504 $386

Idared 5,461,899 3,817,246 70% $0.348 $0.012 $0.014 $0.051 $0.048 $0.048 $0.191 $157 $119

Jonagold 408,080 215,354 53% $0.530 $0.012 $0.014 $0.051 $0.048 $0.048 $0.225 $185 $151

McIntosh 42,933,613 29,757,920 69% $0.356 $0.012 $0.014 $0.051 $0.048 $0.048 $0.187 $153 $135

Northern Spy 587,920 435,598 74% $0.384 $0.012 $0.014 $0.051 $0.048 $0.048 $0.220 $180 $210

Red Delicious 24,744,313 17,825,763 72% $0.338 $0.012 $0.014 $0.051 $0.048 $0.048 $0.180 $147 $158

Spartan 4,881,519 4,106,461 84% $0.348 $0.012 $0.014 $0.051 $0.048 $0.048 $0.223 $183 $175

Other Late Varieties 920,670 731,230 79% $0.415 $0.012 $0.014 $0.051 $0.048 $0.048 $0.262 $215 $207

Total(s) 158,206,030 117,407,174 74% $0.398 $0.012 $0.014 $0.051 $0.048 $0.048 $0.232 $190 $164

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2011 Ontario Apple Tree Acreage By Variety, By District

Variety Name 1

Western 2

Central West 3

Northern 4

Central 5

Eastern Total

Acreage % of Total

Crop

McIntosh 272 660 1,661 305 809 3,707 23.4%

Empire 355 695 241 171 243 1,705 10.8%

Northern Spy 95 370 967 70 79 1,581 10.0%

Red Delicious 424 377 88 376 214 1,479 9.3%

Gala 376 337 58 261 219 1,251 7.9%

Honeycrisp 189 229 226 107 252 1,003 6.3%

Idared 148 188 284 75 90 786 5.0%

Golden Delicious 413 102 7 218 26 767 4.8%

Crispin/Mutsu 180 110 23 207 48 568 3.6%

Ambrosia 188 97 54 51 86 477 3.0%

Cortland 42 94 123 90 84 434 2.7%

Spartan 20 56 184 26 71 357 2.3%

Jonagold 58 20 214 37 3 331 2.1%

Mixed 43 26 5 141 73 288 1.8%

Paulared 47 29 27 30 97 230 1.5%

Other6

26 55 21 55 46 203 1.3%

Fuji 96 26 4 28 5 159 1.0%

Ginger Gold 70 31 8 17 12 137 0.9%

Jerseymac 23 2 79 7 3 114 0.7%

Golden Russet 17 8 15 20 30 90 0.6%

Jonamac 60 1 4 5 0 70 0.4%

Earligold 7 4 30 1 9 51 0.3%

Aurora Golden Gala 24 3 0 9 3 40 0.3%

TOTAL 3,174 3,520 4,325 2,305 2,503 15,827 100% Notes: 1. District 1 Western is comprised of the upper-tier municipalities of Essex, Lambton and Middlesex and the single-tier municipality of Chatham-Kent. 2. District 2 Central West is comprised of the upper-tier municipalities of Huron, Perth, Oxford and Elgin and the single-tier municipalities of Haldimand and Norfolk. 3. District 3 Northern is comprised of the upper-tier municipalities of Bruce, Grey, Simcoe and Dufferin. 4. District 4 Central is comprised of the upper-tier municipalities of Wellington, Peel, York, Halton, Waterloo and Niagara and the single-tier municipalities of Brant, Toronto and Hamilton. 5. District 5 Eastern is comprised of the upper-tier municipalities of Durham, Northumberland, Peterborough, Frontenac, Hastings, Lanark, Lennox and Addington, Leeds and Grenville, Renfrew and Stormont, Dundas and Glengarry and Prescott and Russell and the single-tier municipalities of Kawartha Lakes, Ottawa and Prince Edward. 6. Other includes: Braeburn, Cox's Orange Pippin, Creston, Elstar, Fortune, Goldrush, Granny Smith, Liberty, Lobo, Lodi, Macoun, Marshall Mac, Shizuka, Silken, Melba, Novaspy, Quinte, Rome, Sunrise, Tydeman Red, Viking, Vista Bella, Wealthy and Winesap.

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2011 Ontario Apple Tree Acreage By Variety, By Tree Age

Variety Name

1 To 5 Years

(2007-2011)

6 To 10 Years

(2002-2006)

11 To 15 Years

(1997-2001)

16 To 20 Years

(1992-1996)

21 To 30 Years

(1982-1991)

31 Years and Over (Pre-1981)

Total Acreage

% of Total Crop

McIntosh 186 304 284 272 1,720 941 3,706 23.4%

Empire 62 70 113 235 1,007 217 1,705 10.8%

Northern Spy 149 95 200 127 579 430 1,580 10.0%

Red Delicious 63 65 171 204 635 341 1,479 9.3%

Gala 383 322 292 169 73 12 1,251 7.9%

Honeycrisp 568 304 124 2 3 2 1,003 6.3%

Idared 2 13 22 41 403 304 786 5.0%

Golden Delicious 69 111 121 128 235 103 767 4.8%

Crispin/Mutsu 40 85 114 70 171 89 568 3.6%

Ambrosia 243 228 5 0 0 - 477 3.0%

Cortland 80 37 61 49 123 84 433 2.7%

Spartan 19 5 20 62 145 107 357 2.3%

Jonagold 109 110 15 45 40 13 332 2.1%

Mixed 19 28 22 83 59 77 288 1.8%

Paulared 36 6 16 10 98 64 230 1.5%

Other1

88 19 19 8 37 33 204 1.3%

Fuji 23 25 24 67 19 1 159 1.0%

Ginger Gold 20 22 78 13 3 1 137 0.9%

Jerseymac 2 1 5 6 66 34 114 0.7%

Golden Russet 3 7 25 8 29 18 91 0.6%

Jonamac 4 0 - 6 39 21 70 0.4%

Earligold 4 3 27 10 5 1 51 0.3%

Aurora Golden Gala 4 34 1 - - - 40 0.3%

TOTAL 2,174 1,894 1,761 1,616 5,490 2,891 15,827 100%

Notes: Acreage for both reports is based on the Dec. 31st, 2011 tree inventories as reported by growers to Agricorp and the 2011 Fall Harvest Survey (Statistics Canada). 1

Other includes: Braeburn, Cox's Orange Pippin, Creston, Elstar, Fortune, Goldrush, Granny Smith, Liberty, Lobo, Lodi, Macoun, Marshall Mac, Shizuka, Silken, Melba, Novaspy, Quinte, Rome,

Sunrise, Tydeman Red, Viking, Vista Bella, Wealthy and Winesap.

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PROVINCE EMPIRE GALA

GOLDEN

DELICIOUS

GRANNY

SMITH IDA RED MCINTOSH

RED

DELICIOUS UNSPECIFIED TOTAL

Alberta 2,385,943 131,779 370,689 153,047 483,021 3,524,480

British Columbia 37,899,473 7,662,589 17,367,432 8,232 120,441 14,525,282 28,868,529 106,451,977

Manitoba 103,555 33,497 89,957 201,242 55,334 168,559 652,144

New Brunswick 1,799 768,475 211,302 409,982 377 265,236 362,226 2,019,397

Nova Scotia 339,683 469,981 141,296 950,961

Ontario 710,359 74,317,429 12,940,892 28,240,009 147,359 31,308 16,294,970 32,993,574 165,675,901

Québec 185,060 11,232,539 1,636,060 6,909,242 10,789 126,265 2,008,122 5,000,978 27,109,055

Saskatchewan 122,861 6,149 21,277 210,072 24,489 80,447 465,294

Total By Variety 897,219 127,169,960 22,622,267 53,878,569 166,380 689,704 33,326,480 68,098,628 306,849,208

Ontario - 2010 504,191 33,137,144 6,638,734 13,887,757 200,942 75,224 9,949,190 16,589,113 80,982,295

Ontario - 2011 vs. 2010 41% 124% 95% 103% -27% -58% 64% 99% 105%

Total By Variety - 2010 1,565,950 125,849,652 24,855,488 57,634,638 443,001 857,410 39,840,213 66,376,344 317,422,696Total By Variety -

2011 vs. 2010 -43% 1% -9% -7% -62% -20% -16% 3% -3%

PROVINCE EMPIRE GALA

GOLDEN

DELICIOUS

GRANNY

SMITH IDA RED MCINTOSH

RED

DELICIOUS UNSPECIFIED TOTAL

Alberta 2,421,271 240,425 795,585 11,877 478,762 523,284 4,471,205

British Columbia 11,719 34,949,469 8,513,031 18,624,675 3,284 50,170 14,824,951 26,351,721 103,329,019

Manitoba 167,874 36,613 77,056 326,729 69,180 150,431 827,882

New Brunswick 1,052,842 412,080 829,961 231 106 508,420 588,979 3,392,620

Nova Scotia 371,273 139,432 51,267 561,971

Ontario 805,120 63,981,512 15,048,998 31,708,297 271,728 79,680 21,485,180 32,265,160 165,645,675

Québec 325,334 13,487,172 2,240,733 8,595,645 273,325 2,483,659 4,015,498 31,421,368

Saskatchewan 57,960 10,788 20,812 161,843 20,474 21,353 293,230

Total by Variety 1,142,173 116,489,373 26,502,668 60,791,464 275,244 903,730 39,870,626 63,967,693 309,942,971

Ontario -

2011 vs. 5 Year Average -12% 16% -14% -11% -46% -61% -24% 2% 0%

Total By Variety -

2011 vs. 5 Year Average -21% 9% -15% -11% -40% -24% -16% 6% -1%

Note: The province denotes the port of entry and may not necessarily reflect the final provincial destination of imported apples.

Source: Statistics Canada

IMPORTS OF FRESH APPLES 2011 (LBS)

IMPORTS OF FRESH APPLES - 5 YEAR AVERAGE 2007-2011 (LBS)

12

PROMOTION

2011 Crop Year Promotional Activities Review The Ontario Apple Growers work in collaboration with Foodland Ontario and the Apple Marketers’ Association of Ontario (AMAO) on promotional programs to entice consumers to purchase Ontario apples. This year there were many exciting initiatives in promotion which include: Foodland Ontario Fall 2011 Promotions:

Foodland Public Relations – Year long Public Relations activities include monthly Press Releases featuring Ontario apples and communicates and encourages Ontario’s food/lifestyle media (print and broadcast) to research, write and book Foodland Ontario recipe segments.

The Fresh Perspectives’ newsletter distributes 6 issue/year with apples featured in every issue from October 2011 to September 2012.

There are 9 recipe releases per year and apples were featured in 6 of the releases.

These materials are sent out to over 600 media throughout the year. Total Foodland apple public relations from October 1st, 2011 to September 30, 2012 was 32 television appearances (audience 429,000) and 145 media articles (circulation of 8.8 million). This is a total editorial value of $1.3 million.

Foodland Billboard – Ontario Apples “Crunch the Good” was featured from late October 2011 to February 2012

Foodland TV Commercials – 30 and 15 second commercials “The Good” with fresh Ontario apples. Commercials aired in heavy rotation for the month of September and the first week of October 2011.

Foodland Radio Tags – Foodland Ontario Radio Tags for “Fresh Ontario Apples” were in rotation during September 2011.

Foodland Retailer Display Contest – The 2011 apple contest ran from September 19th to November 25th. Partnering with Foodland, the OAG sponsors an apple display contest to encourage retailers to build eye-catching displays to entice shoppers to purchase Ontario apples. As part of their contest entry, individual stores report any lift in sales and product movement. All

stores who participated in the contest saw an increase in sales.

2011 Foodland Calendar – Foodland Ontario produced and distributed 750,000 calendars in November 2010. Of these, 250,000 calendars were distributed in the LCBO Food & Drink Holiday issue. Apples were prominently featured in the calendar: front and back cover, December 2011 page as well as on the producer page.

Winter & Spring 2012 Promotions:

Spring Foodland Recipe Booklet – featured three apple recipes and distributed 335,000 at retail stores and farmer’s markets.

Ongoing Foodland Activities:

Website – www.foodland.gov.on.ca is always a source of information for recipes, care and handling tips and a section for children.

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Social Media – o Since 2007, the Foodland Ontario Twitter account has gathered more than 13,000

followers. Staff tweet updates to their followers several times a day including recipe ideas and local food news and events.

o Foodland’s Facebook page was launched in March 2011 and currently has over 84,000 people who have “liked” them.

o Pinterest is the newest edition to Foodland’s social media tools.

OAG Initiatives Winter 2012 Promotions:

“Fight the Winter Blues with Ontario Apples” – the OAG campaign was designed to build awareness of Ontario apples’ availability through the winter months and drive sales beyond the fall harvest season. A ‘mood food’ campaign was established based on research showing that certain foods can affect mood and that apples specifically contain properties that can help elevate mood.

An expert spokesperson was retained to offer professional insights into the area of mood foods and to provide credibility to the claim that apples can help beat the winter blues. Four new recipes were developed that featured Ontario apples along with complementary mood boosting ingredients: Baked Ontario Apple Frittata Cups, Ontario Apple Mac and Cheese Bake, Quesadillas with Ontario Apple Salsa, and Ontario Apples and Almond Butter Whole Wheat Cookies.

The research was incorporated into a factsheet and media release accompanied by spokesperson quotes, which were sent to a targeted media list.

The ‘mood food’ campaign has generated 127 media hits (48 print, 72 online and 7 broadcast) and more than 9.6 million media impressions. Twitter conversations reached 107,453 followers. There were 3,117 website visits to www.onapples.com during the campaign period of January 9 to February 29 (8 weeks), compared to 1,806 website visits in the two months prior (November 14 to February 8), a 42 per cent increase.

OAG Social Media – OAG’s Twitter (@ontarioapples) and Pinterest (Ontarioapples) are growing in followers and are an excellent way to connect with consumers, growers and media.

Farm and Food Care Spring Media Tour – The OAG was pleased to participate in Farm and Food Care’s spring media tour. Art Moyer of Ronald Moyer Inc. hosted a sold out tour bus of food writers and bloggers in June 2012. Numerous articles, blogs and tweets were generated from this event.

OPMA’s Apple Months – A portion of Ontario apple sales in April and October each year supports the OPMA’s promotional program, Heart and Stroke Foundation and Canadian Cancer Society. This year, $37,798 was raised by the Ontario apple industry and our retail partners.

OPMA’s Learn Live Love Local Promotions – is the OPMA’s most recent promotional campaign and we are fortunate to be partners. The campaign includes website (www.learnlivelovelocal.com), recipe development and cooking videos, 24-month recipe calendar, commodity info booklets, billboards, retail flyer ads, and Facebook.

Royal Winter Fair Promotion – November 4th – 13th, 2011 – Ontario Apples were showcased on the 5th and 6th at the OFVGA Booth. The Royal Apple Competition again took

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place with an increase in entries. The OAG expanded the apple presence at the 2011 Royal Winter Fair to further increase our presence to our urban consumers and continue to celebrate the 200th anniversary of the McIntosh apple.

Ontario Produce Marketing Association Promotion – OAG sponsored the Golf Tournament and Gala Dinner.

The OAG would like to thank the Apple Marketers’ Association of Ontario and the Ontario Fruit and Vegetable Growers’ Association and Hort Crops Ontario (HCO) for providing funding towards our promotional activities.

Examining frost damage (left to right - Brian Gilroy, Rich Feenstra, OMAFRA Minister McMeekin, and Deputy Minister Amin).

Art Moyer (r) speaks with writer Kat Tancock (Fresh Juice magazine)

and other food writers at the June Farm and Food Care media tour.

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DISTRICT APPLE PRODUCERS’ COMMITTEES

Each District has a District Apple Producers’ Committee and each District may elect one committee person for each 20 growers. If the District is not a multiple of 20, then there shall be one grower representative for each 20 growers plus one additional representative. On or before December 31st of each year, each District Apple Producers’ Committee will elect two members to the board of directors of the Ontario Apple Growers. Based on the current membership, the number of growers to be elected to the District Committees is as follows:

District Grower Numbers Committee Numbers District 1 43 3 District 2 38 3 District 3 51 3 District 4 36 3 District 5 34 3 Members 202 15 Voluntary Members 35 TOTAL MEMBERS 237

RISK MANAGEMENT COMMITTEE REPORT The Risk Management Committee met three times this past year. The Committee members are: Chris Hedges (Chair), Pete Geerts, Rich Feenstra, Brian Gilroy, Art Moyer, Charles Stevens, and Brett Schuyler. The Committee provides input and deals with issues pertaining to the following Growing Forward suite of programs to farmers:

Agri-Insurance (previously production insurance) Agri-Invest (previously the top 15% of a producer’s reference margin) Agri-Stability (previously the bottom 85% of a producer’s reference margin and negative margins) Agri-Recovery (previously disaster coverage)

Given the crop situation for 2012, the OAG requested to Minister Ritz and Minister McMeekin that grower’s 2012 yield be removed from their FAY calculation and that premium rates remain at 2012 levels. The OAG is awaiting a response from government. The Risk Management Committee has developed a list of crop insurance items which are in the process of being reviewed with Agricorp. These items include: Due to increased cost of production for apples, the OAG has asked Agricorp to investigate increased

coverage levels to include 90% level. Varietal mix in the orchard has been slowly changing and now includes higher-valued varieties.

Growers are interested in options to insure these higher priced apple varieties. We have asked

Agricorp to investigate variety specific coverage for apple growers.

Given the changes in orchard practices, the OAG has asked Agricorp to review how potentials are calculated. As well, apple trees are producing sooner than in their 4th year of growth so it would be beneficial for potentials to be included for 2nd and 3rd year.

Requested Agricorp to look at the tree rider and suggest options for improvement. One option may be offering growers the opportunity to buy down the deductible.

As a way to encourage new growers to the apple insurance plan, the OAG has asked Agricorp to look into properly insuring growers in their first year of production, especially if they are taking over an existing orchard.

Current technologies that mitigate risk such as wind machines should be taken into account. Agricorp could encourage growers to establish technologies through reduced premiums. There is a long list of technologies which could be considered (i.e. irrigation, hail netting, frost fans and wind machines).

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Following is a review of the current programming.

Agri-Insurance - The following table provides a summary of the Agri-Insurance results for 2007 to 2011:

Apple Crop Insurance, 2007 - 2011

Year Accounts Liability ,000's

Total Premiums

,000's

Grower Share of

Premiums ,000's

(a)

Claims ,000's

(b)

Net Benefit to Growers

,000's (b) - (a)

2012 140 $34,866 $3,504 $1,546 unknown unknown

2011 139 $28,473 $3,657 $1,916 $3,036 $1,120

2010 139 $27,912 $3,823 $2,001 $2,428 $427

2009 143 $28,242 $4,317 $2,266 $3,694 $1,427

2008 148 $26,233 $3,960 $2,066 $8,190 $6,124

2007 151 $22,746 $4,226 $2,198 $1,739 $(469)

5 Yr Average ('07 - '11) 144 $26,721 $3,997 $2,089 $3,817 $1,726

Agri-Invest – Growers deposit 1.5% of their ANS annually into an account at their financial institution which is then matched by government. Growers can withdraw these funds as they need them. The government portion and the interest earned on the account are taxable in the year of withdrawal. Agri-Stability - This was the previous CAIS program except that now it doesn’t cover the top 15% of a producer’s reference margin. That portion is now covered under Agri-Invest. Self-Directed Risk Management Program (SDRM) – In the 2011 provincial budget, the government announced funding for a permanent SDRM program which is designed to help farmers manage risks beyond their control, like fluctuating costs and market prices. Farmers established SDRM accounts with Agricorp. To be eligible, farmers must grow at least one of the more than 150 eligible commodities for a minimum of six consecutive months in the 2011 taxation year, file a T1163 to Canada Revenue Agency or submit a statement A to Agricorp for 2011. Farmers must also have a minimum of $5,000 in allowable net sales in 2011 for your edible horticulture production.

FRESH APPLE ADVISORY COMMITTEE (FAAC)

The Fresh Apple Advisory Committee met on several occasions and dealt with such issues as generic promotion, crop estimates, research requirements, ministerial exemptions, food safety, and information requirements. The OAG and marketers have also had several conference calls to discuss crop and market conditions at the start of the harvest season. The make-up of FAAC is as follows: Ontario Farm Products Marketing Commission Anna Andres – Committee Chair (Farm Products Marketing Commission Director) Grower Representatives Rien VanBrenk – Director, District 2 Keith Wright – Director, District 1 Bob Bell – Director, District 4

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Apple Marketer Representatives Mike Gibson – Algoma Orchards Jim Dolmer – Bay Growers Ken Martin – Martin’s Family Fruit Farms David Knight – Knight’s Appleden (Alternate)

JUICE APPLE ADVISORY COMMITTEE (JAAC) The Juice Apple Advisory Committee deals with issues relating to crop estimating, quality issues, recording and dissemination of information as well as Ministerial Exemptions. The Juice Apple Advisory Committee members are: Farm Products Marketing Commission Anna Andres – Committee Chair (Farm Products Marketing Commission Director) Grower Representatives Pete Geerts – Director, District 1 Brett Schuyler – Committee Member, District 2 Art Moyer – Director, District 4 Juice Processor Representatives Jay Johnson – Golden Town Apple Products Vincent Giasson – A. Lassonde Additional processors are invited to participate at Advisory Committee meetings in order to get a broader perspective of the industry.

JUICE APPLE NEGOTIATING AGENCY In 2011, the growers and processors agreed to a two-year price agreement (2011 and 2012) on orchard juice apples of 5.75 cents/lb. FOB the farm. Given the crop disaster this year, there was a definite lack of grounder juice apples. Golden Town Apple Products offered an additional incentive of 4.25 cents/lb. for any available juice apples for the harvest season this year.

The marketing and pricing of packing line sort outs are outside of the authority of the OAG and are subject to normal supply and demand factors. Grower Representatives Brian Gilroy – Chair, District 3 Brett Schulyer – Committee Member, District 2 John Deleeuw – Committee Member, District 5 Juice Processor Representatives Jay Johnson – Golden Town Apple Products Jean Gattuso – A. Lassonde

RESEARCH COMMITTEE REPORT The Research Committee is made up of the following members: Cathy McKay (Chair), Harold Schooley, Bob Bell, Peter Geerts, Richard Feenstra and Art Moyer. Research priorities (see page 22) were established by the committee.

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Research and Service Projects:

1. Physiological and Pomological Studies of Newer Apple Cultivars for the Ontario Apple Industry. – Dr. John Cline, University of Guelph

This project will focus on the following key industry-identified problems: a) increased production efficiency through the development of new high-density precocious orchard systems that produce a greater percentage of target fruit with the goal of reducing grower cost using labour saving technologies; b) develop pre-harvest cultural practices for the management of postharvest disorders of pome fruit, and; c) develop new recommendations for thinning and plant growth regulators to address issues such as early cropping, crop load management, and enhanced fruit colour development. This project is funded in part by the University of Guelph and OMAFRA Research Program.

2. Advanced Postharvest Handling and Storage Technology for Canadian Apples – Dr. Jennifer DeEll, OMAFRA The following industry-driven issues are being investigated with funding from the Canadian Agri-Science Cluster for Horticulture (which is within the Growing Canadian Agri-Innovations Program administered by AAFC): 1) Determining the time frame of flesh browning development in ‘McIntosh’ and ‘Empire’ apples throughout the storage season, in relation to growing season and weather data. 2) Evaluating the effects of postharvest handling, 1-MCP technology, and storage regimes on the physical and sensory quality of new cultivars (‘Honeycrisp’, ‘Nicola’, ‘Creston’). 3) Assessing the application of diphenylamine (DPA, antioxidant, Stop Scald) using thermo-fogging technology.

3. Apple Scab and Powdery Mildew Resistance Project – Margaret Appleby, Leslie Huffman and Kristy Grigg-McGuffin, OMAFRA

The OAG is very fortunate to have secured funding from Pest Management Centre (PMC) and through AAFC’s Canadian Agricultural Adaptation Program (CAAP) to conduct a national apple scab and powdery mildew survey to identify the extent of systemic fungicide resistance in Canadian orchards and communicate the findings to the grower community. Preliminary results indicate there is a significant shift from susceptible to resistant apple scab populations throughout Canada for Nova (myclobutanil), while most orchards across Canada are susceptible to the newly registered sterol inhibitor, Inspire (difenoconazole). However, there is some indication that scab populations are beginning to shift towards resistance for this product. There is a wide sensitivity distribution in orchards across Canada for the strobilurin, Flint (trifloxystrobin), ranging from susceptible to resistant apple scab populations. Similarly, preliminary results for powdery mildew testing indicate the presence of the mutation associated with strobilurin resistance in some Canadian orchards. Powdery mildew surveys will continue in 2013.

4. Apple Variety Testing Projects The OAG has partnered with two leading organizations to maximize our work in the area of apple variety testing. Details are as follows:

1) DIAP Project – Paul Birzins, PICO The OAG is a contributing partner to a Developing Innovative Agri-Products Initiative (DIAP) project with Okanagan Plant Improvement Corporation (PICO) and REPUCOM (Quebec). This three-year project will provide funding for testing of AAFC Summerland varieties in Ontario’s growing conditions.

2) Varietal Testing at Vineland Research and Innovation Centre (VRIC) – Daryl Somers, Vineland Research and Innovation Centre

The OAG is providing funds for apple variety testing and breeding for Ontario growers. VRIC will work with various apple breeding programs to identify possible varieties to test in Ontario’s climate. As well, they will look for available seeds or seedling that may be available for further testing and development.

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3) Identifying genetic markers to enhance apple breeding in Canada - Dr. Sean Myles, Nova Scotia Agricultural College

The objective of this project is to lay the foundation for a large-scale marker assisted apple breeding program by collecting genomic data from over 1,000 diverse apple cultivars. Funding for this project is from Canadian apple producing provinces and the Canadian Agri-Science Cluster for Horticulture (which is within the Growing Canadian Agri-Innovations Program administered by AAFC).

5. Defining, Targeting and Mapping Apple Sensory Preference of Ontario Consumers – Dr. Isabelle Lesschaeve, Vineland Research and Innovation Centre

The goal of this project is to investigate and address the rapid demographic change of the apple consumer in Ontario and to gain an understanding of their apple purchase and consumption habits along with their sensory preferences. Information learned will assist with breeding and cultivar evaluations for Ontario. Investment in this project has been provided by Agriculture and Agri-Food Canada (AAFC) through the Canadian Agricultural Adaptation Program (CAAP). In Ontario, this program is delivered by the Agricultural Adaptation Council.

6. Growing Ontario Apple Products in Public Institutions - Hayley LaPalme, My Sustainable

Canada With funding from OMAFRA through the Broader Public Sector (BPS) Investment Fund, OAG is a partner on a project working with the BPS (hospitals, universities, schools, prisons) to understand its apple product needs, catalogue and characterize the market opportunities for the Ontario apple industry to compete with imports. We will aim to raise the profile of existing apples and apple products and their uses and, to promote their use in BPS institutions.

7. Improving Efficiencies in Ontario Apple Orchards – John Zandstra Cedar Springs is one of the 10 field locations for the OAG’s cultivar trial. Additionally, John Zandstra is examining the influence of rootstock on bitterpit incidence (9 different rootstocks) on Honeycrisp. Stoller is providing some funding trying to find out if some of their products can reduce bitterpit in Honeycrisp. Cedar Springs’ location also has a high density planting of Honeycrisp and Ambrosia on B9, at densities of 907, 1210 and 1815 trees/acre (2’, 3’ and 4’ between trees on 12’ row spacing) and working with Leslie Huffman on some different pruning techniques to try and find the proper spacing/pruning approach to allow Ambrosia to fill in allotted space.

8. Pesticide Priority Coordinator - Wayne Roberts

Funded through Niagara Peninsula Fruit and Vegetable Growers’ Association, Wayne Roberts examines and advises on pesticide issues.

9. Sprayer Optimization Project – Dr. Jason Deveau, OMAFRA The OAG secured funding through the Farm Innovation Program (FIP) and held ten workshops on five different growers’ farms to work through the methodology of optimizing their sprayers. We did three workshops in 2011 and two workshops in 2012 and had approximately 130 growers attend the ten workshops. As well, OAG members were provided with a copy of the manual “AirBlast 101”. This project is now completed.

10. Orchard Platform Labour Saving Study – Leslie Huffman and John Molenhuis, OMAFRA The OAG secured funding through the Farm Innovation Program (FIP) to study and determine the cost savings using orchard platforms in Ontario apple orchards with Ontario labour rates. The study will compare using a ladder vs. platform during dormant pruning, summer pruning and thinning. The results in 2011 indicated the following improved efficiency in Ontario’s orchards using platforms:

o Hand thinning 46% o Summer pruning 25%

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o Tying tree leaders 77% o Harvest 15%

Data collection for 2012 proved to be very difficult. We were able to collect some data but not at all locations. All the cooperators have agreed to assist with data collection in the 2013 growing season.

11. Online Crop Management (AppleTracker.com) The OAG secured Farm Innovation Program (FIP) funding to develop an online crop management tool specifically for Ontario’s apple farmers. The AppleTracker.com system was launched at the Ontario Fruit and Vegetable Convention in February 2012. The system now provides a comprehensive tool for growers to record their spray records, harvest data as well as shipping and storage information. This program also provides growers with the reports needed for CanadaGAP food safety program.

Other Research and Services

Horticultural Products Lab – The remote storage lab located at Norfolk Fruit Growers in Simcoe continues to pay benefits for the Canadian apple industry. The lab was supported by the Apple Working Group members of Canadian Horticultural Council with cost-shared funding from the CanAdvance Program. The funding ended December 31, 2011. The Lab was fully utilized again this year. The industry very much appreciates the cooperation of the Norfolk Fruit Growers’ Association and the efforts of OMAFRA research, Dr. Jennifer DeEll. Orchard Network News - The Orchard Network News publication continues to be a useful vehicle for technology transfer to apple growers. We greatly appreciate the efforts of the research and extension community for delivering this publication to our members. We also thank our advertisers and sponsors who provide support for printing and mailing of this publication.

Platform Demonstration at Chris Hedges’ farm, July 2012

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OAG APPLE RESEARCH AND SERVICES PRIORITIES November 2012

Sustainable IPM Systems

INTEGRATING NEW PESTICIDES INTO OUR CURRENT PRODUCTION SYSTEMS. HOW ARE THE NEW PESTICIDES CHANGING THE PEST/BENEFICIAL DYNAMICS AND AFFECTING FRUIT QUALITY & STORABILITY?

Emerging Pest Issues: Apple leaf curling midge, Apple maggot, San Jose scale, Plum curculio, European apple sawfly, Woolly apple aphid, Brown marmorated stink bug, Cankers, Mites & Bitter rot.

Insect management including pesticide efficacy testing, pesticide timing using degree day predictive models and evaluation of biological controls.

Strategies for management of Fire Blight on pome fruit including nursery tree health, plant growth regulators, cultural methods, biocontrols, predictive models and non-chemical alternatives.

Development of an integrated approach for difficult diseases and disorders such as Glomerella, Black and Bitter rot (including cankers), Calyx end rot, Russetting, Root and Crown rot (e.g. replant disease).

Evaluate late season reduced risk insecticides for apple maggot, OBLR, Codling moth and OFM including the efficacy of border sprays.

Invasive species/pest issues (for example Brown marmorated stink bug).

Identification of resistance in Apple scab, Powdery mildew, Codling moth and Mites and ongoing sustainable resistance testing service for growers.

Development of sustainable IPM practices and resistance management for internal Lepidoptera pests (including OFM and CM) and the development of mating disruption strategies for apple insect pests such as Codling moth, Dogwood borer, and Apple clearwing moth.

Optimizing sprayer performance for improved coverage and product efficacy while controlling input costs by eliminating wasted spray and investigate new application technology techniques.

Postharvest Strategies for Apple Quality

Storage Technology:

- 1-MCP/SmartFresh and new application techniques

- Cultivar storage recommendations especially for new varieties

- Investigate new storage technology, energy efficient systems and innovative packaging

Control and Management of Storage Disease and Disorders:

- Fungicide resistance - Investigating new products for control - Optimizing storage regimes to reduce disorders

Marketing Strategies

Research on the healthy attributes of apples and apple products including research on Nutraceuticals, Functional Foods (for example antioxidants, bioflavonoids and other functional components).

Consumer preference testing and taste profiling.

New product development.

Crop Cultural Management

New variety/cultivar (development and evaluation).

Rootstocks evaluation.

Cultural practices for optimum yield and marketability to ensure maximum return for the grower without compromising storability (listed in order of priority):

1. Early cropping (plant growth regulators and quality nursery stock) 2. Crop load/thinning

3. Fruit firmness and Brix levels 4. Irrigation

5. Crop Nutrition 6. Harvest dates

7. Fruit finish 8. Colour development

9. Light interception

Evaluation of frost protection methods and weather monitoring equipment.

New recommendations for plant growth regulators including thinning, stop drop, early cropping and canopy development. Research and development on thinning options as consistent and effective as carbaryl with a wide application window.

Orchard system efficiencies with the goal of reducing grower cost of production (for example robotics, platforms, high density systems, mechanical thinners, fixed application systems, new mechanized pruning, thinning and harvest options).

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CANADIAN HORTICULTURAL COUNCIL APPLE WORKING GROUP UPDATE The Apple Working Group (AWG) met formally twice in 2012: at the CHC AGM in March and the Mid-Summer meeting in July. A number of conference calls have taken place as well, including the AWG managers’ call in September. The direction and workplan of the AWG includes:

Benchmarking Study AgriMarketing Program Cost of Production Model Canadian Agri-Science Cluster for

Horticulture Research and Promotion Agency

Apple Forum Crisis Management Plan Media Royal Winter Fair Vitalization Program

The Canadian Apple Industry Mid-Summer Meeting was held July 24th & 25th in Brossard, QC. The meeting included updates on a number of initiatives and issues the AWG is currently engaged in: Benchmarking Study

This year saw the completion of the Apple Benchmarking Study, conducted by the George Morris Centre Value Chain Management Centre.

Based on the research findings, the report presents five recommendations to industry and government for how to increase the long-term competitiveness and profitability of the Canadian apple industry: 1. Focus on the domestic market ahead of exports 2. Establish a national market and industry development body 3. Invest in production and packing efficiencies/effectiveness 4. Ensure the adequate collection and sharing of market information 5. Learn from other jurisdictions

The report will be presented to AAFC’s Horticulture Value Chain Roundtable at their next meeting and will then be released to the industry for distribution.

Cost of Production Model

The AWG association managers have been working with AAFC representatives on completing a national Cost of Production model for some time now. At this point, there is a need for further discussion in regards to the differences in line items and reporting on expenses (i.e.: labor, fertilizers, amortization costs, etc.) by province.

National Research and Promotion Agency

The opportunity for developing an agency for the apple industry has been explored for the past 3 years and continues to be a discussion item among industry. The AWG continues to explore the possibility and gather pertinent information on the development of an agency.

Agri-Science Cluster for Horticulture and Research Priorities

The AWG has participated in the Agri-Science Cluster for Horticulture through the following two projects:

Advanced Postharvest Handling and Storage Technology for Canadian Apples Dr. Jennifer DeEll, OMAFRA

Identifying genetic markers to enhance apple breeding in Canada Dr. Sean Myles, Nova Scotia Agricultural College

The group discussed the challenges and opportunities with the science cluster and the future of the program under Growing Forward 2. The group discussed regional and national priorities, identifying some basic priorities across all provinces:

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Storage Research

Pest Management

Rootstocks and systems

Varietal Development

Review of Canadian Apple Situation & Trends (Farid Makki, AAFC) F. Makki updated the group on the current production, export and import statistics, as well as presenting a review of challenges and opportunities for the sector:

Challenges: o Expanding global supply & commoditization of apples o High production costs in Canada compared to other global sources o More stringent buyer requirements (quality, safety & traceability, sustainability) o Highly consolidated retail trade & concentration of buying power o Shifting consumer trends o Stagnating/declining apple consumption o Competition from processed snacks & other fruits (berries, tropical fruits)

Opportunities: o Increase orchard productivity and yields o Improve consistency of quality in packed out product o Further alter the product mix with the introduction of “appropriate” varieties o Strengthen consumer appeal of apples (health benefits, pleasure, fun) o Capitalize on the "buy-local" trend o Build brands or trademarks o Build stronger relationships with retailers sourcing Canadian branded apples o Build alliances with packers/marketers to help meet retailers and consumers’ needs o Explore and create new direct sales opportunities for apples. o Explore new export market opportunities with the best risk/reward potential

Repeal of Standard Containers and Ministerial Exemptions

On July 25, Daniel Miller, Executive Director, Food Labelling and Claims Directorate (CFIA) joined the industry meeting via conference call. Mr. Miller gave a presentation on the repeal of standard containers and industry members posed a number of questions. The repeal continues to be a concern for the apple industry and CHC.

Seasonal Agricultural Workers Program (SAWP)

The group agreed to develop an AWG letter for provincial use and possibly submit a resolution in regards to immigration status for foreign workers to the CHC AGM in March.

GMO/Arctic Apple

Since the CHC AGM in March, discussions have continued with BC and QC because of some GMO vegetables in QC. Both provinces are still concerned over GMO apples, especially because of the Arctic Apple. BC and QC conducted a public opinion survey with Leger Marketing which resulted in the basic understanding that consumers aren’t ready for GMO apples. BC will be communicating these results to MPs and recommending that the approval of the Arctic apple is stalled until the review process and issues be resolved.

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DIRECTORS AND STAFF ONTARIO APPLE GROWERS

2011/2012 CHAIR Brian Gilroy District 3 VICE CHAIR Charles Stevens District 5 DIRECTORS Keith Wright District 1 Peter Geerts District 1 Chris Hedges District 2 Rien Van Brenk District 2 Shane Ardiel District 3

Bob Bell District 4 Richard Feenstra District 4 Cathy McKay District 5 DISTRICT GROWER COMMITTEE Steve Versteegh District 1

Brett Schuyler District 2 Brad Johnston District 3 Art Moyer District 4 John Deleeuw District 5 GENERAL MANAGER Kelly Ciceran ([email protected]) PRODUCTION & MARKET ANALYST+ Larissa Osborne ([email protected]) TREASURER* Maureen Connell ACCOUNTING ASSISTANT* Sylvana Lagrotteria + Shared staff with Tender Fruit Board

* Shared staff with GTFOL

ASSOCIATION DELEGATES Agricultural Commodity Corporation Brad Oakley Canadian Horticultural Council Brian Gilroy (Rien Van Brenk – Alternate) CHC Apple Working Group Brian Gilroy, Rien Van Brenk (Brett Schuyler – Alternate) Ontario Federation of Agriculture Rien Van Brenk FARMS John Ardiel (Steve Versteegh – Alternate) Hort Crops Ontario Kelly Ciceran Ontario Fruit & Vegetable Growers’ Assoc. Brian Gilroy (Rien Van Brenk – Alternate) Ontario Agricultural Commodity Council Brian Gilroy (Chris Hedges – Alternate) Presidents’ Council Brian Gilroy Okanagan Plant Improvement Corporation Cathy McKay Fruit Technical Working Group Charles Stevens, Brett Schuyler COMMITTEE DELEGATES Fresh Apple Advisory Committee Bob Bell, Keith Wright, Rien Van Brenk Juice Apple Advisory Committee Art Moyer, Brett Schuyler, Pete Geerts Juice Apple Negotiating Agency Brian Gilroy, Brett Schuyler, John Deleeuw Risk Management Committee Chris Hedges (Chair), Pete Geerts, Brian Gilroy,

Art Moyer, Charles Stevens, Brett Schulyer Research Committee Cathy McKay (Chair), Harold Schooley, Art Moyer, Bob Bell,

Pete Geerts, Rich Feenstra Revitalization Committee Charles Stevens (Chair), Brian Gilroy, Chris Hedges, Paul

Frankis, Shane Ardiel, Rich Feenstra, Tom O’Neill, Kirk Kemp

Political Action Committee Committee of the Whole Cost of Production Committee Committee of the Whole

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Notes

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PO Box 100, Vineland Station, Ontario L0R 2E0 P 905.688.0990 F 905.688.5915

[email protected] www.onapples.com