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Animal and Plant Health Inspection Service

Economic Analysis in Support of Certification

Proposed Rule: Removal of Varietal Restrictions on Apples (Malus domestica) from Japan

(7 CFR 319.56-27 and 7 CFR 305-2(i))

Docket No. APHIS-2009-0020

5/7/2009

When an agency issues a rulemaking proposal, the Regulatory Flexibility Act (RFA) 

requires the agency to “prepare and make available for public comment an initial regulatory

flexibility analysis” which will “describe the impact of the proposed rule on small entities” 

(5 U.S.C. 603(a)). Section 605 of the RFA allows an agency to certify a rule, in lieu of preparing 

an analysis, if the proposed rulemaking is not expected to have a significant economic impact on a 

substantial number of small entities.

As specified by § 605 of the RFA, the following economic analysis provides the basis for

certification of the proposed rule to allow importation of all varieties of Malus domestica apples 

from Japan.

Reasons why action by the agency is being considered

APHIS received a request from the Japanese Ministry of Agriculture, Forestry and 

Fisheries (MAFF) to allow the importation of all Malus domestica apple varieties into the United 

States under the same conditions as it currently exist for Fuji variety apples. As part of an

evaluation of Japan's request, APHIS prepared a commodity import evaluation document that 

included a review of data collected over 14 years, from 1994 to 2008, regarding pest interception 

on Fuji apples from Japan and an evaluation of the risks associated with the importation of Malus 

domestica apples of various varieties into the United States1. The data indicated that no 

quarantine pests on commercial cargo of Fuji apples have been intercepted/reported/identified at 

U.S. ports of entry from 1994 to 2008, and no pests of concern have been reported by the preclearance program in Japan. APHIS has concluded that it is highly unlikely that other Malus 

 

1 APHIS Commodity Import Evaluation Document (CIED) February 2009
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domestica apple varieties would have a pest host status significantly different from that of Fuji 

variety apples given that the varieties are of the same species.

Description and estimate of the number of small entities affected

This proposed rule may affect domestic apple growers, especially those who engage in the 

production of Tsugaru, Jonagold, Orin and other Malus domestica varieties,

2

as well as the 

importers, wholesalers and distributors of all varieties of Malus domestica apples. APHIS does 

not have information on U.S. production of these apple varieties. Nonetheless, the action is 

expected to have minimal economic effect on U.S. entities, small or large, given the relatively

small impact of current Fuji apple imports from Japan. Any increase in the quantity of apples 

from Japan because of importation of these other, more minor Malus domestica varieties is 

expected to be insignificant.

According to the Small Business Administration (SBA) standard, a business engaged in 

apple production is considered to be a small entity if its annual receipts are not more than 

$750,000.

3

 Table 1 summarizes 2007 Census of Agriculture data for apple growers.

4

 That year 

there were a total of 25,591 U.S. apple growers. Average annual sales per apple grower are 

estimated to have been about $102,000 in 2007.5 Clearly, apple growers are predominantly small 

entities according to the SBA standard of $750,000. The top-10 producing States —Washington, 

California, Pennsylvania, Michigan, New York, Oregon, Ohio, Wisconsin, New Mexico, and 

North Carolina —had 58% of all apple growers and 84% of U.S. apple acreage. 

Table 1. Number of apple farms and acres, top 10 States

State Number of apple growers and 

percentage share of U.S. total

Total acres and percentage share of 

U.S. total

Washington 3,052 (11.9%) 165,215 (41.5%)

California 2,074 (8.1%) 22,184 (5.5%)

 

2 After Fuji, these are the major apple varieties produced in Japan, according to the Japanese Ministry of Agriculture, 

Forestry and Fisheries (MAFF).

3 North American Industry Classification System (NAICS) 111331 – Crop Production – Apple Orchards.

4 The data include all varieties of apples. We do not have data specific to the Malus domestica varieties grown in 

Japan. 

5 Average sales per entity is based on the number of apple growers recorded in the 2007 Agricultural Census, i.e. 

25,591, and the total value of fresh and processed apples reported in the 2008 USDA-NASS Non-citrus fruits and nuts 

summary, i.e. $2.6 billion.
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Pennsylvania 1,886 (7.4%) 23,552 (5.9%)

Michigan 1,772 (6.9%) 44,189 (11.1%)

New York 1,350 (5.3%) 49,966 (12.6%)

Oregon 1,330 (5.2%) 6,234 (1.6%)

Ohio 1,000 (3.9%) 5.970 (1.5%)

Wisconsin 935 (3.7%) 6,406 (1.6%)

New Mexico 807 (3.2%) 2,057 (0.5%)

North Carolina 673 (2.6%) 7,583 (1.9%)

Top 10 State total 14,879 (58.1%) 333,356 (83.7%)

United States total 25,591 (100%) 398,770 (100%)

Source: USDA-NASS 2007Census data, Table 32, Fruits and nuts.

Table 2 summarizes the 2007 Census of Agriculture data for apple growers by acreage. 

According to the data, 36% of apple growers had orchards of less than 1 acre, and the vast 

majority of apple growers, 99%, had orchards of less than 250 acres, indicating that the majority

of apple growers engage in relatively small-scale operations.

Table 2. Number of U.S. apple farms by acreage

Acres

Number 

of farms 

Percentage 

share

Cumulative 

percentage Acres 

Percentage 

share

Cumulative 

percentage 

0.1 to 0.9 9,270 36.2% 36.2% 3,000 0.8% 0.8%

1.0 to 4.9 9,059 35.4% 71.6% 18,091 4.5% 5.3%

5.0 to 14.9 3,366 13.2% 84.8% 27,070 6.8% 12.1%

15.0 to 24.9 1,131 4.4% 89.2% 21,154 5.3% 17.4%

25.0 to 49.9 1,168 4.6% 93.8% 40,102 10.1% 27.4%

50.0 to 99.9 791 3.1% 96.9% 54,158 13.6% 41.0%

100.0 to 249.9 561 2.2% 99.0% 83,996 21.1% 62.1%

250.0 to 499.9 152 0.6% 99.6% 51,422 12.9% 75.0%

500.0 to 749.9 52 0.2% 99.8% 31,107 7.8% 82.8%

750 .0 to 999.9 20 0.1% 99.9% 17,408 4.4% 87.1%

1,000 acres or more 21 0.1% 100.0% 51,263 12.9% 100.0%

Total 25,591 100.0% 398,771 100.0%

Source: USDA-NASS 2007 Census data, Table 35 Specified fruits and nuts by acres.
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Table 3 summarizes the 2007 Census of Agriculture data for apple growers by market 

value of agricultural products sold. Over 94% of apple farms had sales of less than $500,000. 

Table 3 clearly shows that apple growers are predominantly small entities based on the SBA 

standard of $750,000. 

Table 3. Distribution of apple producers by the market value of apples sold: 2007

Market value of apples sold Number 

of 

Percentage 

share

Cumulative 

percentage Acres 

Percentage 

share 

Cumulative 

percentage 

Less than $1,000 3,858 15.1% 15.1% 8,012 2.0% 2.0%

$1,000 to $2,499 2033 7.9% 23.0% 2,592 0.6% 2.7%

$2,500 to $4,999 2686 10.5% 33.5% 3,384 0.8% 3.5%

$5,000 to $9,999 3511 13.7% 47.2% 5,479 1.4% 4.9%

$10,000 to $24,999 4542 17.7% 65.0% 13,178 3.3% 8.2%

$25,000 to $49,999 2727 10.7% 75.6% 15,484 3.9% 12.1%

$50,0000 to $99,999 1,862 7.3% 82.9% 20,603 5.2% 17.2%

$100,0000 to $249,9999 1,858 7.3% 90.2% 41,098 10.3% 27.5%

$250,0000 to $499,999 1,047 4.1% 94.3% 44,500 11.2% 38.7%

$500,000 to $999,999 689 2.7% 97.0% 50,595 12.7% 51.4%

$1,000,000 or more 778 3.0% 100.0% 193,847 48.6% 100.0%

Total 25,591 100.0% 398,772 100.0%

Source: USDA-NASS 2007 Census data, Table 59, Summary by market value of agricultural products sold.

In the case of fresh fruit merchant wholesalers (NAICS 424480), establishments with not 

more than 100 employees are considered small by the SBA standard. In 2002, there were 5,376 

fresh fruit and vegetable merchant wholesalers in the United States with a total of 110,578 paid 

employees, or on average, 21 paid employees per establishment. It is likely that domestic fruit 

merchant wholesalers that may be affected by the rule are predominantly, if not entirely, small

entities.
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Japanese apple production and Japanese and U.S. trade statistics

Table 4 summarizes 2007 apple production in Japan. Fuji, the only variety of apple 

currently allowed to be imported from Japan, led all varieties at 468,400 metric tons (MT), or 

about 56% of Japan’s apple production. Tsugaru, the second largest variety, accounted for 99,900

MT, or 12% of apple production in Japan. 

Table 4. Japanese Production by Varieties (in metric tons): 2007

Variety Production Share

Fuji 468,400 56%

Tsugaru 99,900 12%

Jonagold 74,600 9%

Orin 70,900 8%

Others1126,300 15%

Total 840,100 100%

Source: Japanese Ministry of Agriculture, Forestry and Fisheries (MAFF) Statistics, May 30, 2008 

http://www.maff.go.jp/toukei/sokuhou/data/ringo-syukaku2007/ringo-syukaku2007.pdf.

1 Others include Mutsu, Indo, Sekai-ichi, Jonasan, Hokuto, Star King Delicious, Kinsei, Chiaki.

Table 5 summarizes the Japanese export of fresh apples for 2006-2008. Taiwan is by far 

the single largest importer of fresh apples from Japan. The U.S. share of Japanese fresh apple

exports was only 0.3% by value in 2008 ($221,015) and totaled 60,500 KG.

Table 5. Export of Fresh Apples from Japan (in US dollars and KG)

2006 2007 2008 2008

Country US$ KG US$ KG US$ KG US$ %

Taiwan 45,196,627 17,869,272 62,862,587 24,360,021 64,338,250 23,354,845 88.0%

Hong Kong 1,178,237 312,594 2,152,045 505,103 3,336,203 716,755 4.6%

China 747,129 156,837 1,676,516 325,523 2,213,798 389,898 3.0%

Thailand 841,168 202,148 1,061,420 245,104 1,483,386 306,069 2.0%

Indonesia 257,023 63,345 239,441 56,020 402,322 80,925 0.6%

Russia 28,500 6,638 261,626 52,110 371,089 68,724 0.5%

Singapore 163,019 53,613 230,053 67,266 318,986 85,732 0.4%

United States 206,334 60,500 208,302 60,500 221,015 60,500 0.3%

United Arab 

Emirates - - 5,072 316 159,164 30,476 0.2%

French 

Oceania 42,296 13,100 75,070 19,300 78,309 21,420 0.1%

Others 107,010 22,839 210,929 36,624 187,080 45,538 0.3%

World Total 48,767,342 18,760,886 68,983,063 25,727,887 73,109,600 25,160,882 100%

Source: Global Trade Atlas annual data, commodity 080810.
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APHIS does not have an access to the U.S. production data by apple varieties that would 

be allowed to be imported from Japan, such as Tsugaru, Jonagold, and Orin. However, if such 

production takes place in the United States, it is assumed to be significantly small compared to 

more widely marketed varieties, such as Red Delicious, Gala, Golden Delicious, Granny Smith, 

Fuji, McIntosh, Rome, Empire, York, and Jonathan. We welcome information that the public 

may provide on U.S. production levels, numbers of producers, and value of sales for varieties such 

as Tsugaru, Jonagold, Orin, Mutsu, Indo, Sekai-ichi, Jonasan, Hokuto, Star King Delicious, 

Kinsei, Chiaki with which the apples imported from Japan will directly compete.

Based on the USDA-NASS 2008 non-citrus fruits and nuts data, total U.S. fresh apple 

production was valued at $2.3 billion, with an average wholesale price per pound of $0.383.6 In

contrast, the average price of the apple varieties that would be allowed to be imported from Japan

is expected to be substantially higher. For example, in 2007, the average wholesale price of these 

Japanese apple varieties sold in Japan was $0.98 per pound, i.e. two-and-a-half times higher than 

the average U.S. price.

7

Table 6 shows the average prices of fresh apples exported from Japan. In 2008, the 

average price of fresh apples exported to the United States was $1.66 per pound, i.e. more than 

four times higher than the U.S. wholesale price for domestically-produced apples. The wide price 

differential between apples grown in Japan and in the U.S. suggests that the Japanese apples are 

sold as specialty products to a very limited market segments in the U.S. and would not be a close 

substitute for most U.S.-grown apples.

Table 6. Average price of fresh apple exports from Japan, by importing country, 2006–2008, 

dollars per kilogram and dollars per pound

2006 2007 2008

Country Per KG Per pound Per KG Per pound Per KG Per pound

Taiwan $2.53 $1.15 $2.58 $1.17 $2.75 $1.25

Hong Kong 3.77 1.71 4.26 1.93 4.65 2.11

China 4.76 2.16 5.15 2.34 5.68 2.58

Thailand 4.16 1.89 4.33 1.96 4.85 2.20

Indonesia 4.06 1.84 4.27 1.94 4.97 2.26

 

6 USDA National Agricultural Statistics Service “Noncitrus Fruits and Nuts Final Estimates 2002-2007” December 

2008 Page 23 http://usda.mannlib.cornell.edu/usda/nass/SB985/sb1011.pdf

7

http://www.maff.go.jp/toukei/sokuhou/data/ringo-syukaku2007/ringo-syukaku2007.pdf 

Based on the average rate of foreign exchange in 2007, ¥ 117.76/US$1.00, reported by Federal Reserve Statistical 

Release http://www.federalreserve.gov/releases/g5a/20080102/
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Russia 4.29 1.95 5.02 2.28 5.40 2.45

Singapore 3.04 1.38 3.42 1.55 3.72 1.69

United States 3.41 1.55 3.44 1.56 3.65 1.66 

World total 2.60 1.18 2.68 1.22 2.91 1.32

Source: Global Trade Atlas annual data, commodity 080810.

The United States is a net exporter of fresh apples. In 2008, it exported 701,000 MT of 

fresh apples to 87 countries, valued at $737 million, and imported 165,000 MT of fresh apples 

from 9 countries, valued at $141 million, resulting in net exports of $596 million.

8

 Tables 7 and 8 

list the countries from which the United States imported fresh apples from 2006 to 2008. In terms 

of both value and quantity, Chile consistently supplied the largest amount of fresh apples over the 

last three years. Other major sources of fresh apples are New Zealand and Canada. Japan’s share 

of U.S. apple imports, by quantity, was only 0.1% in 2008.

Table 7. Quantity of U.S. fresh apple imports, by exporting country, 2006-2008, kilograms

2006 2007 2008 2008

Country US$ KG US$ KG US$ KG KG %

Chile 75,764,915 

 

82,618,856 

 

99,328,264 

 

123,520,738 

 

83,329,174 

 

93,667,670 56.7%

New

Zealand

 

31,023,986 

 

37,416,519 

 

39,320,338 

 

47,209,643 

 

27,851,862 

 

32,801,688 19.8%

Canada

 

26,878,098 

 

34,892,849 

 

26,424,534 

 

31,062,309 

 

26,853,738 

 

36,035,546 21.8%

Argentina

 

1,323,108 

 

1,511,723 

 

4,479,852 

 

4,423,771 

 

2,088,117 

 

2,243,108 1.4%

Brazil

 

- 

 

- 

 

214,715 

 

226,308 

 

384,748 

 

358,974 0.2%

Japan

 

210,581 

 

60,500 

 

210,129 

 

60,520 

 

218,093 

 

144,036 0.1%

South 

Africa

 

- 

 

- 

 

33,333 

 

11,382 

 

67,600 

 

21,840 0.0%

Vietnam

 

- 

 

- 

 

8,199 

 

9,008 

 

10,876 

 

5,689 0.0%

Thailand

 

17,543 

 

13,530 

 

36,128 

 

27,002 

 

5,712 

 

3,889 0.0%

St. Vincent 

& the 

Grenadines

 

- 

 

- 

 

5,975 

 

4,345 

 

- 

 

- 

-

Philippines

 

- 

 

- 

 

6,930 

 

4,948 

 

- 

 

- 

-

China

 

80,597 

 

171,880 

 

- 

 

- 

 

- 

 

- 

-

 -

 

8 Global Trade Atlas annual data, commodity 080810
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Guatemala - - 20,496 161 - - 

India

 

6,855 

 

2,850 

 

4,826 

 

2,000 

 

- 

 

- 

-

World 

Total

 

135,305,683 

 

156,688,707 

 

170,093,719 

 

206,562,135 

 

140,809,920 

 

165,282,440 100%

Source: Global Trade Atlas annual data, commodity 080810.

Table 8. Average price of fresh apple imports by the U.S., by exporting country, 2006–2008, 

dollars per kilogram and dollars per pound

2006 2007 2008

Country Per KG Per pound Per KG Per pound Per KG Per pound

Chile $ 0.92 $0.42 $0.80 $0.36 $0.89 $0.40 

New Zealand 0.83 0.38 0.83 0.38 0.85 0.39 

Canada 0.77 0.35 0.85 0.39 0.75 0.34 

Argentina 0.88 0.40 1.01 0.46 0.93 0.42 

Brazil 0.95 0.43 1.07 0.49 

Japan 3.48 1.58 3.47 1.57 1.51 0.69 

South Africa 2.93 1.33 3.10 1.40 

Vietnam 0.91 0.41 1.91 0.87 

Thailand 1.30 0.59 1.34 0.61 1.47 0.67 

World Total 0.86 0.39 0.82 0.37 0.85 0.39

Source: Global Trade Atlas annual data, commodity 080810.

The trade data indicate that Fuji apple imports from Japan are minor in the overall U.S.

market. Allowing entry of other varieties of Malus domestica apples is expected to change the 

quantity of apple imports from Japan only minimally. The significantly higher prices of apples 

from Japan compared to other imported apples or domestically grown apples underscore the lack 

of direct substitution between apples varieties from Japan and the principal U.S. varieties. 

Although most U.S. apple farms are small, this rule would not have a significant economic impact 

on a substantial number of small entities. However, we welcome information on U.S. production 

of the apple varieties that are expected to be imported from Japan, in order to better understand 

the potential impact of this rule on the part of the U.S. apple industry with which the apple 

imports from Japan would directly compete.

Summary and Conclusions

The proposed rule to allow imports of all varieties of Malus domestica apples from Japan 

into the United States is expected to have minimal economic impact on U.S. entities, large or

small. Although the Fuji apple is the most common variety grown in Japan, it constituted only
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0.1% of U.S. apple imports in 2008. Allowing entry of other Malus domestica varieties is 

expected to change the quantity of apple imports from Japan only minimally. The wide price 

differential between apples grown in Japan and in the United States suggests that apples imported 

from Japan are not a close substitute for the principal U.S.-grown apple varieties. The rule, if 

promulgated, will not have a significant economic impact on a substantial number of small 

entities.