2026 Apple Outlook: High Supply with Tight Margins

The U.S. apple industry is moving a lot of fruit, but profitability is being squeezed by heavy supply, stubborn demand and rising costs. Farm Credit East recently hosted a webinar with Chris Gerlach of USApple for an overview of the industry. The following are key points growers should be aware of as they plan orchard decisions, labor and marketing for the season ahead.

Supply is Still Large

According to USApple estimates, the 2023–2024 season may be the highest-producing year on record for the U.S. at 292 million bushels. The 2024-2025 season production total fell slightly to 275 million bushels. While U.S. apple acreage is down about 3,000 acres since 2022, Washington still added around 1,000 acres in that window. This suggests meaningful removal has not yet shown up in the data.

Variety Mix is Shifting

The industry continues to be dominated by fresh varieties, and that dominance is growing as older blocks come out and newer plantings come into production. Honeycrisp, Granny Smith, Cosmic Crisp and Pink Lady are all varieties that continue to grow. Gala, still the top variety by volume, is beginning to trend down.

Strong Movement

On the surface, the shipment pace has been encouraging. 2025 had the strongest November movement on record, about 18.3 million bushels. Storage numbers also suggested faster fresh movement later in the season.

Even so, the industry has crossed a threshold where supply growth is exceeding demand at profitable prices. Retail data shows apples are down about 1% in volume over five years, with berries highlighted as a key competitive set.

Exports Can Provide Relief

Exports were one of the brighter signals as the season-to-date volumes are running above the five-year average and slightly ahead of last year. Mexico remains the top destination with Canada second. Those two markets together account for more than half of export value, which is why it will be important to maintain favorable trade conditions under the United States Mexico Canada Agreement (USMCA).

Higher Costs Will Define Profitability

Labor is now the number one cost of production. Changes made in late 2025 to how H-2A wage rates are calculated could lower rates in some states. Even with these changes, it will be difficult to cut pay for returning crews, so savings may show up more gradually. Overall, for many growers the current price environment is not sustainable without changes in costs, pack-out, demand or supply.

In a cycle defined by big supply and tight margins, disciplined decisions on quality, costs and market access will matter as much as yield. Growers should keep the following in mind going into 2026:

• Calculate break-even by block and variety (not just farm averages), especially when splitting fruit between wholesale, local retail and direct markets
• Manage for fresh pack-out because channel shifts to processing can erase margins
• Stay engaged in export development and trade policy, especially any changes with Mexico and Canada
• Consider channel diversification where it fits your location, including farm stands, U-pick and local retail programs that can reduce exposure to the lowest wholesale pricing in heavy-supply years

To dive deeper into the above topics, review the webinar recording along with the presenter’s PowerPoint slides, or read the 2026 Apple Industry Outlook, published on April 1, 2026.