United States 

Department of 

Agriculture

Animal and Plant 

Health Inspection 

Service

October 2014

Final Regulatory Flexibility Analysis

Final Rule

APHIS-2014-0003

RIN 0579-AD89

Importation of Fresh Apples from China into the 

Continental United States, 7CFR 319.56

Policy & Program Development

Policy Analysis & Development
i

Summary

The Animal and Plant Health Inspection Service (APHIS) received a request from the 

national plant protection organization (NPPO) of China to grant U.S. importation of all varieties

of commercially produced fresh apples (Malus pumila). We are allowing the importation of fresh 

apples from China into the continental United States if they are produced in accordance with a 

specified systems approach to pest risk mitigation. The approach integrates prescribed measures

that would cumulatively achieve the appropriate level of phytosanitary protection. This analysis 

evaluates the potential effects of the rule on small U.S. entities. 

Apples are the second most popular fresh fruit for U.S. consumers and the third most 

valuable fruit crop produced in the United States. We are the world’s second largest apple 

producer and became the world’s largest apple exporter in terms of value in 2012, generating a 

surplus of $909 million in fresh apple trade (exports minus imports). That year, the United States 

commercially produced 4.1 million metric tons (MT) of apples, valued at $3 billion, of which 3 

million MT of apples were sold fresh and 1.1 million MT were used for processing. Although 

apples are commercially grown in all 50 States, 9 States accounted for 96 percent of production. 

The State of Washington was by far the largest producer, at more than 2.9 million MT per year

(over 70 percent of the U.S. total). 

Almost all apple farms are family-owned, and many of these families have been engaged 

in apple production for many generations. The U.S. apple industry is challenged by relatively flat 

domestic apple consumption, and its continued growth relies on expanded global trade. Roughly

30 percent of fresh apples produced in the United States were exported in 2012. That year,

roughly 8 percent of fresh apples consumed in the United States were imported, totaling 183,000
ii

MT and valued at $164 million. Virtually all imports came from four trading partners: Chile, 

New Zealand, Canada and Argentina. 

By quantity, China was the world’s largest producer, consumer and exporter of apples in 

2012. (In 2013, Poland became the world’s largest exporter of apples in quantity, whereas the 

United States remained the world’s largest exporter of apples in value). Apples are the leading 

fruit produced in China, with production having increased from 2.3 million MT in 1978, to 38.5 

million MT (33.3 million MT for fresh markets and 5.2 million MT for processing) in 2012. 

China’s apple consumption has grown to 37.5 million MT.

In contrast to that of the United States, China’s apple industry relies marginally on 

international trade – in 2012, it exported about 3 percent of fresh apples produced and imported 

0.1 percent of fresh apples consumed. China’s exports of fresh apples peaked in 2009 at 1.2 

million MT and declined to 0.98 million MT in 2012. Most of the 4.3 million apple growers in 

China operate on a small scale, with farm acreages averaging 1.3 acres. The Fuji variety accounts

for about 70 percent of China’s apple production. China’s heavy dependence on the Fuji variety

is in sharp contrast to the many diverse varieties produced in the United States.

China’s export markets are concentrated in Russia, Southeast Asia, and the Middle East. 

Chinese fresh apples also have been exported for more than a decade to Canada; however, 

Canada accounted only for 0.4 percent of China’s fresh apple exports in 2012. In fact, China’s 

combined export volume to Canada, European Union (EU) member countries, Australia and 

Mexico is very small (0.8 percent of its total fresh apple exports in 2012), and has significantly 

declined in the last six years, from 45,267 MT in 2007 (4.4 percent of Chinese apple exports) to 

8,273 MT in 2012. Average export prices of fresh apples from China in 2012 to the 

aforementioned countries (Canada, $1.50/KG; EU, $1.10/KG; Australia, $1.83/KG; and Mexico, 
iii

$1.55/KG) are consistently higher than the average price paid in all 67 countries to which China 

exported fresh apples ($0.98/KG). It is reasonable to expect that price for fresh apples exported 

to the United States will be similar to prices paid in Canada and Mexico. Considering the current

availability of relatively low-priced imported apples in the United States and the wide range of 

domestic varieties, apples imported from China are not likely to compete solely on price in the 

U.S. market. U.S. consumers make their purchasing decisions for fresh apples based not only on

price, but also on intrinsic product attributes such as variety, color, size, flavor, texture, 

freshness, production method, and product origin. 

Based on historic data of China’s apple production, consumption, export volumes and 

prices, we expect no more than 10,000 MT of fresh apples will be imported from China into the 

continental United States annually, which represents less than 0.44 percent of the U.S. domestic 

fresh apple supply and less than 5 percent of U.S. imports in 2012. Most of China’s fresh apple 

exports to the United States will likely be shipped to West Coast ports, primarily ones in 

California, and are expected to be distributed through Asian ethnic supermarkets mainly to Asian 

communities. 

California is the largest market for Washington State apples; any effects of the rule may

be borne mainly by Washington and California apple growers. In particular, U.S. apple growers 

of the Fuji variety, which comprised about 8 percent of U.S. production in 2011, may be more 

directly affected by an increase in supply because we expect the majority of fresh apples from 

China will be of the Fuji variety. However, given the relatively small quantity expected to be 

imported from China, any negative impacts for U.S. small entities will not be significant.
iv

Table of Contents

Summary.......................................................................................................................................... i

Introduction..................................................................................................................................... 1

Need for and Objectives of the Rule............................................................................................... 1

Significant Issues raised by Public Comment in response to the Initial Regulatory Flexibility

Analysis........................................................................................................................................... 2

Comments filed by the Small Business Administration in response to the Proposed Rule.......... 14

Potentially Affected Small Entities............................................................................................... 14

U.S. Apple Production and Trade ............................................................................................. 14

Apple production in the United States.................................................................................. 14

Apple trade by the United States .......................................................................................... 18

China’s Apple production and trade.......................................................................................... 19

Apple production in China.................................................................................................... 19

Apple trade by China ............................................................................................................ 23

Potential Effects ........................................................................................................................ 26

Prevalence of U.S. Small Entities ............................................................................................. 28

Projected Reporting, Recordkeeping, and Other Compliance Requirements............................... 31

Steps taken by APHIS to minimize Significant Economic Impacts on Small Entities ................ 31
1

Introduction

China requested USDA authorization of market access for commercial shipments of its 

fresh apples, Malus pumila Mill,1into the continental United States. In response to this request, 

APHIS prepared a pest risk assessment and a risk management document, and published a 

proposed rule on July 18, 2014, to allow the importation of commercial shipments of fresh 

apples from China (79 FR 41930-41934, Docket No. APHIS-2014-0003). This final rule will 

allow the importation of all varieties of commercially produced fresh apples from China into the 

continental United States, if they are produced in accordance with a specified systems approach 

to pest risk mitigation to protect against the introduction of quarantine pests.

Section 319.56-1 of Title 7 of the Code of Federal Regulations (CFR) grants USDA 

regulatory authority for establishing phytosanitary requirements for the importation of fruits and 

vegetables from foreign suppliers. The purpose of this final regulatory flexibility analysis is to 

evaluate the potential effects of this rule on small businesses, small organizations and small 

governmental jurisdictions as required by section 604 of the Regulatory Flexibility Act, to ensure 

that any disproportionate burdens for such businesses that may result from the rulemaking are 

taken into account.

Need for and Objectives of the Rule

APHIS has determined that the current prohibition on fresh apple imports from China is

unnecessary given that any risks posed to U.S. agriculture can be sufficiently mitigated by a

systems approach designed to prevent the introduction of quarantine pests. APHIS is committed, 

under the International Plant Protection Convention (IPPC), to consider allowing the importation 

 

1

[= Malus communis, M. domestica, M. sylvestris, Pyrus malus].
2

of plants and plant products subject to the least restrictive measures consistent with ensuring 

phytosanitary security. The systems approach for this action includes provisions for registration 

of production areas and packinghouses, orchard sanitation, fruit fly trapping, treatment and 

inspection for quarantine pests at set intervals by China’s national plant protection organization 

(NPPO), bagging of fruit, safeguarding, labeling, importation in commercial consignments, and a 

phytosanitary certificate with an additional declaration certifying the commercial shipment is 

free from all quarantine pests and has been produced in accordance with the systems approach.

The objective of the rule is to allow fresh apples to be imported into the continental 

United States from China. The rule will amend current regulations found in 7CFR319.56-1, and 

is part of a continuing program to allow the importation of foreign agricultural products that 

APHIS has determined are without significant risk of introducing pests or diseases into the 

United States.

Significant Issues raised by Public Comment in response to 

the Initial Regulatory Flexibility Analysis

In this section, we respond to public comments on the initial regulatory flexibility

analysis (the economic analysis) that we received during the comment period for the proposed 

rule, July 18 to September 16, 2014. 

Bilateral apple trade: Several commenters expressed concern related to bilateral trade of 

fresh apples between the United States and China: “our legislators are misguided in thinking that 

allowing Chinese apples in the U.S. market will result in the sale of more U.S. apples in the 

Chinese market;” “we want to emphasize that the underlying proposal not be finalized until 

APHIS has established that the U.S. apple industry will have meaningful access to the Chinese 

markets for all apple varieties;” “the economic analysis is silent on how the proposed rule will 
3

provide increased trade opportunities for U.S. apples;” “if APHIS is hoping that China will 

reciprocate based on merely on good will, {sic} the economic analysis should state this. The hope 

is a poor and an illegal basis for amending U.S. phytosanitary regulations;” and “while there is 

no method to guarantee reciprocity in the USDA/APHIS rule, if China were to lift their ban 

against the importation of apples from the US, there is reason to believe that New York State 

apple growers will not benefit. In the past China has only allowed the importation of Golden/Red 

Delicious apples (from Washington, Oregon and Idaho), where are two varieties that are only 

minimally grown in New York State.”

Response: The rule is in response to a request received from the NPPO of China for 

authorization to export fresh apples to the continental United States. The Plant Protection Act 

(PPA) (7 U.S.C. 7701 et seq.) states that we may restrict or prohibit the importation of a 

commodity into the United States only if we determine that such restriction or prohibition is 

necessary to prevent the introduction of dissemination of a plant pest or noxious weed within the 

United States. It does not authorize APHIS to take non-pest impacts such as the benefits and 

costs of bilateral trade agreements into consideration when making such authorizations. As a 

signatory to the International Plant Protection Convention (IPPC), the United States agrees not to 

prescribe or adopt phytosanitary measures concerning the importation of plants, plant products, 

and other regulated articles, unless such measures are made necessary by phytosanitary

considerations and are technically justified. The rule is based on phytosanitary determinations, 

not possible market implications. As we stated in the initial regulatory flexibility analysis 

(IRFA), global trade plays a significant role for the U.S. fresh apple industry; about 30 percent of 

the apples produced in the United States were exported and about 9 percent of fresh apples 

consumed in the United States were imported in the marketing year 2012/13. Given the fact that 
4

virtually all U.S. apple farms are family owned, and the majority are categorized as small entities 

under the Small Business Administration’s small-entity threshold of annual revenue no more 

than $750,000, we believe such trade facts are relevant information to present to the public.

Expected volume of fresh apples being imported from China: Several commenters 

disagreed with our estimate of 10,000 MT as the annual volume of fresh apples likely to be 

imported from China. For example: “the economic analysis assumes imports would be no greater 

than 10,000 metric tons (MT) annually, primarily of the Fuji variety, but documentation to 

justify these assumptions is not provided;” “the economic analysis does not evaluate the potential 

for increase beyond 10,000 MT/year;” “China’s apple exports to the U.S. could increase in the 

future, perhaps even dramatically, beyond the 10,000 MT currently estimated. Such an increase 

could have a significant impact on small entities but nothing in the economic analysis addresses 

this issue;” “the assumption that the export volume of Chinese apples to the U.S. will never

exceed 10,000 MT is also untenable considering the dramatic increase in Chinese apple 

production from 2.3 million MT in 1978 to 38.5 million MT in 2012. The prospect of Chinese 

apples flooding U.S. domestic markets is daunting and poses a significant risk to U.S. economic 

security;” and “with the Chinese government’s subsidy of apple production, and with no 

regulation of the number or variety of apples allowed into the United States, conditions may 

form to create a competitive price point that would seriously undercut the growers in the MidHudson Valley and the state. And while it is speculated that market conditions will only support 

a small amount of apples from China varying from .5 percent (of domestic apple supply) to 5

percent (of total import), there is no way to accurately predict China’s behavior towards the US 

apple market, or their future intentions in a volatile and possibly hostile international trade 

climate. Furthermore there is no way to predict future market conditions based on the variables 
5

of weather, pests, disease and other unforeseen acts of nature. If any of the preceding 

circumstances were to result in the oversupply and underpricing of Chinese apples in the US 

markets, it might very well irreparably harm our small family orchards.”

Response: Given the historic data available to us on China’s and U.S. fresh apple 

production, consumption, and trade, we are reasonably confident that the annual import volume 

in the near term will be around 10,000 MT. It is not possible to know the quantity of apples that 

will actually be imported from China. Uncertainties as noted by some commenters, from the 

weather to political and economic events, can alter the global supply and demand for fresh 

apples. We arrived at the 10,000 MT estimate based on the following facts: 

1) Chinese apples are no longer inexpensive. China exported a small amount of Fuji 

variety apples, about 4,000 MT or about 0.4 percent of its total export volume, to Canada at 

$1.50/KG in 2012 and 2013, respectively. China also exported about 19 MT to Mexico in 2012, 

but its exports to Mexico ceased in 2013. China exported small amounts of apples, about 6,450 

MT or about 0.7 percent of its total export, to the EU member countries, including the United 

Kingdom and the Netherlands, at $1.37/KG in 2013. Combined volumes of export to Canada, 

Mexico and the EU member countries were 8,342 MT in 2012 and 11,357 MT in 2013 which 

accounted for only 0.9 percent and 1.1 percent of China’s total export in 2012 and 2013, 

respectively. We expect that the U.S. price for apples from China will be similar to those paid in 

Canada and Mexico. Under the systems approach set forth in this rule, all apples to be exported 

to the United States have to be grown in a registered production site approved by the NPPO of 

China, produced and packed under specified protocols, and certified to prove that the apples have 

been inspected and found free of pests. We expect the production costs for apples exported to the 
6

United States will be much higher than the costs of producing fresh apples for China’s domestic 

markets. 

2) Currently, the United States primarily imports apples from the Southern Hemisphere, 

where the production season is opposite to that of the United States. U.S. imports from the 

Northern Hemisphere are limited. Only about 20,000 MT of fresh apples, almost all from 

Canada, were imported at an average price of $1.25/KG in 2013, which is lower than the 

$1.50/KG paid for China’s Fuji apple exports to Canada that year.

3) China’s export markets are limited primarily to the Fuji variety. U.S. growers produce 

Fuji variety apples that are supplied to U.S. markets at lower prices than those prices being paid 

for China’s recent Fuji variety exports to Canada and Mexico. 

4) The United States currently imports fresh pears, such as Ya, fragrant and sand pears, 

from China under a systems approach. These pears are not typically grown in the United States. 

The import volume of these fresh pears from China has been only about 10,000 MT annually, 

despite the minimal competition from U.S. pear growers. These pears from China are primarily

distributed through Asian ethnic specialty supermarkets for the Asian communities in the United 

States. We expect that fresh apples from China may be similarly marketed. 

5) There is evidence that the general public has a prevailing negative perception of food 

products imported from China. Overcoming such perceptions could present a challenge for fresh 

apples from China in U.S. markets. 

6) The U.S. Embassy Beijing-Agricultural Affairs Office reports that China’s apple 

industry is quite mature in terms of crop management and farming skills, and yields are not 

expected to increase dramatically in the near future. Chinese official data indicate that average 

yields in eight major producing provinces have increased only 5 percent between 2008 and 2012. 
7

Industry estimates published in China on October 8, 2014, report that Chinese apple production 

is expected to decline by about 5 percent in 2014, while producer costs are expected to increase 

by about $0.08/KG to $0.10/KG, due to unfavorable weather conditions and increased labor 

costs.

7) Domestic consumption of fresh apples in China continues to grow. Total consumption 

of fresh apples in China was 32.3 million MT compared to U.S. consumption of approximately

2.3 million MT in MY2012/13. Fresh apple consumption on the Chinese domestic market has 

doubled over the last five years, in tandem with the increase in the number of middle-income and 

affluent consumers in China. Fresh apple exports are not growing; Poland surpassed China to 

become the world’s largest fresh apple exporter, by volume, in 2013. 

Apple prices: Several commenters posed questions regarding the prices of apples at 

various stages in the distribution chain and the economic implications of the prices. For example: 

“while some average import and export prices were evaluated, the potential impacts on grower 

farm gate value were not addressed;” “the IRFA assumes that prices for fresh apples from China 

would sell at prices similar to those paid in Canada and Mexico, approximately $1.50/KG, 

compared with current prices of imports from other origins of approximately $0.89/KG. It seems 

highly unlikely that Chinese apples would trade at a nearly 70 percent price premium versus 

apples of other origins;” and “the IRFA estimates that 10,000 MT of apples will be imported 

annually at the price of approximately $1.50/KG. In total, that is about $15 million spent on 

Chinese apples per year. In July 2014, the average retail price of apples in the United States was 

about $3.06/KG. If the Chinese apples are sold at the average retail price, that would be 

approximately a $15.6 million annual profit, not including shipping costs or other maintenance 

costs. This would not seem likely considering that the United States imports apples from other 
8

countries at an average price of $0.89/KG, according to the IRFA. The Chinese apples may end 

up being overpriced, which could lead to a drop in sales and profits.” 

Response: We will respond to the commenters’ concerns beginning with retail prices, 

then farm gate prices and lastly import prices.

1) Retail prices – We concur with the commenter that the July 2014 average retail price 

of Red Delicious reported by the Bureau of Labor Statistics (BLS) was about $3.06/KG. The 

BLS data show that the 2013 average price was also about $3.06/KG, which was a slight increase 

from the 2012 average Red Delicious price of $3.04/KG. According to the USDA-Agricultural 

Marketing Service, the average apple price for all varieties (including organic) was 

about$3.59/KG in 2013.

2) Farm gate prices – USDA-National Agricultural Statistics Service reports that the July

2014 preliminary price received by U.S. apple growers was about $0.75/KG, and the 2013 

average price they received was about $0.90/KG. The U.S. Embassy Beijing-Agricultural Affairs 

Office reports that national average farm gate price for the Fuji variety in China was about 

$1.00/KG, compared to the U.S. average price of $0.90/KG. China’s higher farm gate price is 

due to increased production costs, especially labor costs. (China’s wholesale apple price was 

about $1.40/KG in 2013; data on retail prices are not available.) 

3) Import prices – China exported a small quantity of Fuji variety apples, about 4,000 MT 

or about 0.4 percent of its total exports, to Canada at $1.50/KG in 2012 and 2013, respectively.

In July 2014, China exported 23 MT of apples to Canada at $1.88/KG, whereas, the United State 

exported 10,216 MT to Canada at $1.12/KG during the same time period. As for the United 

States, it imported 198,746 MT of fresh apples at an average price of $1.09/KG in 2013. The 

price was higher than the 2012 average price reported in the IRFA, i.e., 183,453 MT at 
9

$0.89/KG. The increase in the price was mainly due to higher prices of apples imported from 

Chile (132,738 MT at $1.00/KG in 2013 compared to 121,917 MT at $0.76/KG in 2012). 

Nonetheless, these prices are still significantly lower than the prices typically paid for apples 

exported from China.

Comparisons of the aforementioned prices, especially of U.S. ($0.90/KG) and China’s 

($1.00/KG) farm gate prices in 2013, and the import prices paid by the United States ($1.09/KG 

on average in 2013) and import prices paid by Canada for apples from China ($1.50/KG in 2012 

and 2013, respectively), suggest that fresh apples imported from China by the United States will 

not offer any price advantage in the U.S. markets, nor, as previously discussed, other intrinsic 

advantages.

Pest outbreaks and economic impacts: Some commenters expressed concern regarding

economic impacts of pest outbreaks caused by imported apples from China. For example: “in the 

event that a pest is introduced with the apples, all of the profits from the apples would essentially

go to waste in order to quarantine the pests, especially if the case is as severe as the pest case in 

Australia in 1995 or Japan in the 1980’s and 1980’s;” “the prospect of Chinese apples flooding 

U.S. domestic markets is daunting and poses a significant risk to U.S. economic security, unless 

again, very strict mitigation measures are plied. It is difficult to understand how the risks 

associated with importation of this commodity outweigh the relatively miniscule benefits;” and 

“the US government provides strong support for Integrated Pest Management (IPM) and indeed 

has mandated its implementation. Invasive pests are the biggest threat to IPM as evidenced by

the consequences of the recent introduction and establishment of two invasives from China, 

Halyomorpha halys and Drosophila suzukii. Controlling these two invasive pests in US fruit 

production systems requires repeated applications of insecticides that essentially have curtailed 
10

previously successful IPM programs. Moreover, the establishment of these two invasives has led 

to $100s of millions in documented losses. The economic analysis for importation of apples from 

China discusses the financial impact of sales, but does not address the potential economic impact 

from crop loss, additional control treatments and the abandonment of IPM should one of the 21 

potential new pests become established in the US. Please provide this economic analysis.”

Response: This rule is possible only because the specified phytosanitary measures have 

been deemed sufficient to prevent the introduction of quarantine pests and diseases from fresh 

apple imports from China. We conduct the Regulatory Flexibility Analysis based on successful 

fulfillment of these measures. We acknowledge that it is not possible to attain zero pest risk in 

the international trade of agricultural commodities. If zero tolerance for pest risks were the 

standard, it is quite likely that trade in fresh produce would be severely limited. APHIS 

performed a risk analysis for this rule and has concluded that the risk of pest introduction is 

negligible given the specified systems approach.

Variety of apples to be imported from China: One commenter questioned our 

presumption that primarily Fuji variety apples would be imported from China: “the IRFA

observes that most apples produced in China are the Fuji variety and that Fuji apples represent 

only a limited fraction of the U.S. market. While that may be true now, it could change. Once the 

U.S. market is opened to Chinese apple growers, these growers could switch production to 

varieties, e.g., Red Delicious, that would have a greater impact on U.S. small entities.”

Response: We agree that the composition of apple varieties produced in China will likely

change, especially as its domestic demand for other varieties grows. In the United States, the 

shares of traditionally popular apple varieties, such as Red Delicious, Gala, Golden Delicious, 

Granny Smith, Fuji, and McIntosh, have been declining and are being replaced by new varieties 
11

including both non-licensed open access apples and licensed club apples with trademark brand 

names. In general, it requires considerable time and resources to develop and successfully market 

new varieties of apples. Moreover, the increasing number of new varieties is adding complexities 

to the U.S. apple market. Given this highly competitive environment and the costs to China’s 

producers of expanding production of new varieties, it is reasonable to assume that China will 

rely on Fuji variety exports when it gains entry to U.S. markets.

Economic impacts on small entities: One commenter questioned the IRFA’s regulatory

sufficiency: “the IRFA nominally addresses the potential effects of the rule on these entities and 

concludes that ‘APHIS does not expect the proposed rule to have a significant economic impact 

on small entities.’ No information is presented to indicate the magnitude or even the direction of 

the economic impacts on the small entities listed. Apparently, the IRFA believes that because the 

volume of apples potentially imported from China would be small relative to the U.S. domestic 

apple supply, therefore the impacts on small entities would necessarily also be small. This is not 

certain, and it certainly is not supported by the IRFA;” and “other than noting that apple growers, 

particularly Fuji apple growers, in Washington, California and other States to which apples from 

Washington and California could be diverted could face increased competition, the IRFA 

contains no information on or evaluation of the magnitude of that competition or the economic 

impact of that competition. Nor is the IRFA’s lack of information on economic impact limited to 

just apple growers. It fails to provide information on economic impact on any of the small 

entities listed on pages 18-20. Merely listing the potentially impacted small entities and asserting 

without analysis the absence of impact is not sufficient to satisfy the intent of the Regulatory

Flexibility Act. By failing to even an approximate estimate of the magnitude of the competition 
12

and the extent of the economic impact, the IRFA is non-compliant with the Regulatory

Flexibility Act and the rule is illegal.” 

Response: As required by the initial regulatory flexibility analysis (5 U.S. Code § 603), 

we described in the IRFA the type and number of small entities that might be affected and 

whether there are compliance requirements that they would need to meet. This rulemaking will 

not establish any compliance requirements that would result in an undue burden for U.S. small

entities. 

Executive Order 13563 and benefits and costs of the rule: One commenter expressed 

concern on the absence of benefit and cost analysis in the IRFA: “Executive Order 13563 (Jan. 

18, 2011) states in part that ‘Our regulatory system must protect public health, welfare, safety, 

and our environment while promoting economic growth, innovation, competitiveness, and job 

creation. It must take into account benefits and costs, both quantitative and qualitative.’ APHIS 

has failed, in a wholesale fashion, to display that the costs and risks to our Nation's environment, 

public health and welfare are outweighed by the benefit of bringing Chinese apples into its 

market. At best, APHIS could argue that importing apples from China will reduce apple prices, 

and possibly foster global competition in apple prices, since APHIS readily admits that China 

does not import an appreciable quantity of apples (especially relative to US production). 

However, APHIS has failed to establish that there would be any reduction in price to the 

consumer, and APHIS has failed to establish that consumers don't already enjoy a competitive 

marketplace. Thus, this Proposed Rule has not been shown to provide any benefit.”

Response: We disagree with the commenter’s assessment. Executive Order 13563 

requires that agencies propose or adopt a regulation upon a reasoned determination that its 

benefits justify its costs (recognizing that some benefits and costs are difficult to quantify). The 
13

Executive Order also states that, where appropriate and permitted by law, each agency may

consider (and discuss qualitatively) values that are difficult or impossible to quantify, including 

equity, human dignity, fairness, and distributive impacts. The Executive Order ultimately leaves 

the type of analysis to the discretion of the Agency. We have previously explained the reasons 

for which APHIS conducts qualitative rather than quantitative analyses.

Apples from China relative to concentrated apple juice from China: One commenter 

expressed concern that the importation of fresh apples from China will follow a course similar to 

that of concentrated apple juice imports from China: “In 1998 the United States allowed China to 

import apple juice into our market. Today they dominate sales by 70%. This takeover forced 

American apple growers out of business then and it can happen again with the sale of fresh 

apples.”

Response: We concur with the commenter’s description of the impact that concentrated 

apple juice imports from China have had on the U.S. processed apple juice industry. As 

mentioned in Footnote 6 of the IRFA, in 2012, 3 million MT of apples were sold fresh and 1.1 

million MT were used for processing, including for production of apple juice. U.S. processed 

apple production declined from 1.8 million MT in 2000 to 1.1 million MT in 2012, and apple 

juice manufacturers substantially increased imports of concentrated apple juice, predominantly 

from China. We stress that the apple juice and fresh apple markets are distinct. Price and ready 

availability are the key purchasing factors for generic concentrated apple juice. Price is also a 

principal factor in the demand for fresh apples, and as has been explained elsewhere, we do not 

expect fresh apples from China will be inexpensive. In addition, consumer preferences, when 

purchasing fresh apples, are influenced by several factors other than price, such as variety, size, 

color, flavor, texture, freshness, product origin, and production method. American consumers 
14

benefit from a diverse and abundant supply of fresh apples that are sourced locally, regionally, 

nationally, and globally; it is highly unlikely that China will become a dominant supplier in this 

increasingly competitive U.S. market.

Comments filed by the Small Business Administration in 

response to the Proposed Rule

There were no comments filed by the Small Business Administration in response to the 

initial regulatory flexibility analysis.

Potentially Affected Small Entities

U.S. Apple Production and Trade

Apple production in the United States

The United States is the second largest apple-producing country in the world after China, 

both by quantity and value. We became the world’s largest apple exporter in terms of export

value in 2012.

2

The United States commercially produced 4.1 million MT of apples, valued at 

$3.1 billion, in 2012. The volume was lower than the previous year’s 4.3 million MT, as several 

central and eastern States, such as Michigan and New York, experienced crop losses due to 

unseasonably cold weather.3 Apple production is reported in all 50 States; however, commercial 

apple production on farms with more than 100 apple trees was limited to 29 States in 2012. In

that year, U.S. commercial apple production was concentrated in nine States, which together 

accounted for 96 percent of production. The State of Washington was by far the largest,

 

2

2013 updates: Poland overtook China as the world's largest apple exporter in quantity, exporting 1.2 million MT 

valued at $576 million, with an average unit price of $0.48/KG. China exported about 1 million MT valued at $1.03 

billion, with an average unit price of $1.04/KG. The United States remained the world’s largest apple exporter in 

value, exporting about 0.9 million MT valued at $1.1 billion, with an average unit price of $1.25/KG.

3 The situation for the 2013/14 apple crop is expected to improve significantly compared to 2012/13.
15

producing more than 2.9 million MT in 2012, 72 percent of the U.S. total. New York was

second, accounting for 8 percent (Figure 1).4

Figure 1. U.S. commercial apple production, by State, 2012 (1,000 MT)

Source: USDA-ERS, Fruit and Tree Nut Yearbook, Table A17 “Utilized production of selected fruit and tree nuts, 

by State, US, 2012,” November 2013.

Note: a. Utilized production includes all apples marketed in either fresh or processed form, such as juice, cider, 

sauce, sliced fresh, dried, or frozen.

b. Unit of measurement was converted from short tons to MT.

c. Michigan normally ranks third in U.S. apple production; however it dropped to seventh in 2012 as a result of 

serious crop damages.

Commercially produced apples are either sold fresh or used for processing. In 2012, 3 

million MT (73 percent) of U.S. commercial apples were sold in fresh markets and 1.1 million 

MT (27 percent) were used for processing (Figure 2). The allocation of apples to the fresh and 

processing sectors differs significantly between Washington State and other apple-producing 

States. In 2012, Washington allocated about 80 percent of its production to the fresh markets for 

 

4 Crop production reports only cover apple production on commercial orchards, defined as orchards of 100 or more 

bearing trees (definition on page 74, http://usda01.library.cornell.edu/usda/current/NoncFruiNu/NoncFruiNu-01-25-

2013.pdf ).

2,948 

322 

215 

136 

104 58 

52 41 

34 

169 

U.S. Apple Utilized Production by State, 2012

(in 1,000 MT)

U.S. Total: 4.1 million MT a, b

WA (72.2%)

NY (7.9%)

PA (5.3%)

CA (3.3%)

VA (2.6%)

OR (1.4%)

MI (1.3%) c

WV (1.0%)

ID (0.8%)

20 Other States

(4.2%)
16

domestic consumption and exports, whereas, only 53 percent and 40 percent of apple production 

in New York and Michigan, respectively, were allocated to the fresh apple markets.5,6

Figure 2. U.S domestic utilization (million metric tons) for fresh and processed apples, 2000-

2012

Source: USDA-ERS, Fruit and Tree Nut Yearbook, Table G-1 “Fresh apples: Supply and utilization,” November 

2013. (Converted from pounds to metric tons.)

a. Processed apple products include apple juice and cider, canned, frozen, dried, fresh slice, and other.

U.S. crop acreage devoted to apple production has declined by 29 percent since its peak 

in 1997, from 467,950 acres to 330,600 acres in 2011 (Figure 3). Most of the acreage contraction

is attributable to decreased production for the processing sector.7 Meanwhile, apple production 

yields have increased to 12.9 MT per acre in 2011 from 8.5 MT per acre in 1978, as cultivation 

and storage technologies continue to advance.

 

5 APHIS estimates and the Washington Growers Clearing House, 56th Apple Price Summary, 2012-13 Marketing 

Season. http://www.waclearinghouse.org/members/summary/apples/applesum.pdf

NY: New York Apple Association Fast Fact, http://www.nyapplecountry.com/fastfacts.htm , 

MI: Michigan Apple Committee, History, http://www.michiganapples.com/history.html

6 Utilization for processed apples, mainly apple juice, has declined from 1.8 million MT in 2000 to 1.1 million MT 

in 2012. The share of concentrated apple juice (CAJ) imported, mainly from China, increased to over 80 percent 

during this period. Price and available supply are the key CAJ purchasing factors for manufacturers of apple juice 

products. The situation is different for apples that are sold fresh to consumers; in addition to price, other factors such 

as variety, size, color, texture, flavor, freshness, product origin, and production method (traditional or organic) 

influence U.S. consumers’ purchasing decision.

7 Refer to footnote 6 for the decline in the processing sector.

0.0

1.0

2.0

3.0

4.0

5.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

2.8 2.5 2.4 2.5 3.0 2.8 2.9 2.8 2.8 2.9 2.8 2.9 3.0 

1.8 

1.7 1.4 1.5 

1.7 1.6 1.6 1.3 1.5 1.4 1.3 1.4 1.1 

million M

T

U.S. Apple Utilization: Fresh vs. Processeda

2000 - 2012 (1 million MT)

Fresh Apples Processed Apples

Total 4.6 4.2 3.8 4.0 4.7 4.4 4.5 4.1 4.3 4.3 4.1 4.3 4.1
17

Figure 3. U.S. apple bearing acreage and yield, 1978-2011

Source: APHIS analysis based on FAOSTAT and various USDA-ERS Fruit and Tree Nut Yearbooks.

According to the U.S. Apple Association, there are about 7,500 commercial apple farms

(those with at least 100 bearing trees) in the United States. Virtually all apple farms are family

owned, and many of these families have been engaged in apple production for many 

generations.

8

In addition to these commercial-scale operations, there are a large number of 

smaller apple farms. The 2007 Census of Agriculture, which includes apple growers with annual 

sales of $1,000 or more, reports a total of 25,591 apple farms in all 50 States.9 Nearly 72 percent 

of these apple farms had fewer than 5 acres, accounting for only about 6 percent of the total 

acreage devoted to apple farming. The national average acreage per farm was 15.6 acres in 2007. 

 

8 New York Apple Association, “New York apple fast facts,” http://www.nyapplecountry.com/fastfacts.htm

The Michigan Apple Committee, “History of apples,” http://www.michiganapples.com/history.html

Washington Apple Commission, “Meet your grower,” http://www.bestapples.com/growers/index.aspx

9 The 2012 Census of Agriculture is scheduled to be released on May 2, 2014.

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

 -

 50,000

 100,000

 150,000

 200,000

 250,000

 300,000

 350,000

 400,000

 450,000

 500,000

Yield (tonnes/acre)

Acreage

U.S. Apple Bearing Acreage and Yield

1978 - 2011 (in acres)

Acreage Yield (tons/acre)
18

Apple trade by the United States

The United States is a significant net exporter of fresh apples. In 2012, U.S. fresh apple 

trade generated a surplus of $909 million (exports minus imports).

10 The trade surplus in fresh 

apples more than tripled from 2000 to 2012, as U.S. apple exports increased through the

liberalization of export markets, intensive industry export promotion efforts and increased 

disposable income in developing countries.11 In 2012, the United States exported 867,000 MT of 

fresh apples (about 30 percent of domestic production) valued at $1.073 billion. This was the

first time U.S. fresh apple exports exceeded $1 billion in value.

The United States imported 183,453 MT of fresh apples, valued at $164 million in 2012 

(Figure 4). Virtually all imports (99.96 percent) come from four trading partners: Chile, New 

Zealand, Canada and Argentina. With a crop production cycle opposite to that of the United 

States, Southern Hemisphere exporters help maintain year-round supply of fresh apples in the 

United States. Bilateral trade in fresh apples between Canada and the United States benefits both 

countries due to the geographical proximity of producers and key markets.

12

 

10 Export values are based on Free Along Ship Export Value (F.A.S.) and import values are based on Custom Import 

Value (C.V.)

11 Agricultural Marketing Resource Center – Apple profile 

http://www.agmrc.org/commodities__products/fruits/apples/commodity-apple-profile/

12 For example, McIntosh apples from British Columbia complement the markets in western States where this 

variety does not grow well. USDA-ERS. 2013 “Imports Contribute to Year-Round Fresh Fruit Availability” 

December 2013. http://www.ers.usda.gov/publications/fts-fruit-and-tree-nuts-outlook/fts-356-01.aspx
19

Figure 4. U.S. fresh apple imports, top four trading countries (metric tons), 2012

Source: APHIS analysis based on Global Trade Atlas data.

China’s Apple production and trade

Apple production in China

China is the world’s largest producer of apples, and apples are its leading fruit by

volume, followed by pears. Since adopting market-based agricultural reforms in 1978, China has 

increased its apple production from 2.3 million MT in 1978 to 38.5 million MT in 2012, with the 

majority of production (37.5 million MT) absorbed by China’s domestic markets. China’s sharp 

increase in apple production has been in response to a robust increase in domestic consumption, 

and sharply contrasts with the recent history of relatively stable apple production in the United 

States. U.S. apple production grew from 3.4 million MT in 1978 to 4.1 million MT in 2012

(Figure 5).

121,917 

33,978 

22,767 

4,718 72 

U.S. Fresh Apple Imports (in MT), 2012 

Total: 183,453 MT

Chile (66%)

New Zealand (19%)

Canada (12%)

Argentina (3%)

Others: 3 countries

(0.04%)
20

Figure 5. Apple Production: China and U.S. (million metric tons), 1978 - 2012

Source: APHIS analysis based on the USDA-ERS Fruit and Tree Nut Yearbook, USDA-FAS GAIN Report “China 

– Fresh deciduous fruit annual” November 29, 2013, FAOSTAT

Note: Marketing year (MY) for the U.S. data begins in July, and for the Chinese data begins in August.

Table 1 compares apple production, consumption, and trade by the United States and 

China for the marketing year (MY) 2012/13.13 Both countries are net exporters of fresh apples; 

however, the United States is much more heavily dependent on global trade. In the United States,

imports (196,000 MT) provided for 8.6 percent of domestic consumption; 29.8 percent of the 

apples produced (889,000 MT) were exported. In absolute quantity, China produced far more 

apples (33.3 million MT for the fresh market) than the United States (about 3 million MT);

however, China is much less reliant on global trade of fresh apples than the United States, 

importing only 43,000 MT (0.1 percent of its domestic consumption) and exporting 1 million 

MT of apples (3.1 percent of its domestic production). China’s fresh apple production exceeded 

domestic consumption by about 3 percent, whereas fresh apple production in the United States 

exceeded domestic consumption by more than 30 percent.

14

 

13 For the U.S. data, the marketing year begins in August; for China data, it begins in July. Marketing year (MY)

based data do not correspond with calendar year (CY) based data in this analysis, because of the different reporting 

periods.

14 China’s import share would be higher if fresh apple re-exports from Hong Kong were included.

0

10

20

30

40

2.3

38.5

3.4 m

4.1 

illion M

T

Apple Production: China vs. U.S.A.

1978 - 2012 (in million MT)

China

U.S.A.
21

Table 1. Fresh apple production, consumption, imports and exports by the United States and 

China (1,000 metric tons), MY 2012/13

Fresh Apple Production, Consumption, Imports and 

Exports, MY 2012/13 (1,000 MT) Percentage Shares

Marketing 

Year \1

2012/13

Domestic 

Production

Domestic 

Consumption Import Export

Import 

Share of 

Domestic 

Consumption \2

Export 

Share of 

Domestic 

Production \3

Excess of 

Production 

over 

Consumption \4

U.S.A. 2,980 2,287 196 889 8.6% 29.8% 30.3%

China 33,300 \532,317 43 1,026 0.1% \63.1% 3.0%

Source: APHIS calculation.

For the United States – USDA-ERS Fruit and Tree Nuts 2013 Yearbook Table G-1 “Fresh apples: Supply and 

utilization, 1980/81 to date”

For China – USDA-FAS GAIN Report, MY2012/2013 New Post, “China – Fresh Deciduous Fruit Annual,” 

November 29, 2013

Note: 

1. Marketing year (MY) for the U.S. data begins in August, for China it begins in July. 

2. Import share calculated by dividing import by domestic consumption.

3. Export share calculated by dividing export by domestic production.

4. Excess of production over consumption calculated by dividing domestic production by domestic consumption and 

subtracting 1.

5. Fresh apple domestic production for China was calculated by subtracting the processing (5.2 million MT) from 

total apple production (38.5 million MT)

6. Share of import would be higher if fresh apple re-exports from Hong Kong to China were included.

China’s apple acreages significantly expanded from 1,482,000 acres in 1978, peaking at

7,377,717 acres in 1996, and then declining by 31 percent, to 5,068,440 acres in 2011 (Figure 6).

By contrast, average yield per acre has been steadily increasing since 1992 and averaged 7.1 

MT/acre in 2011.15,16

 

15 Average yield per acre includes both bearing and non-bearing acres.

16 According to the USDA-FAS Beijing office, the average yield in eight major producing provinces plus Beijing in 

2011 was 12 MT/acre, which is similar to the average yield in the United States. Nationally, yield on bearing 

acreage is estimated to be about 10 to11 MT/acre. The current bearing percentage is estimated to be about 85-90 

percent of all apple acres.
22

Figure 6. China apple planting acreage and yield, 1978-2011

Source APHIS analysis based on the USDA-FAS GAIN Report “China – Fresh deciduous fruit annual” November 

29, 2013, 

http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Fresh%20Deciduous%20Fruit%20Annual_Beijing_Chin

a%20-%20Peoples%20Republic%20of_11-29-2013.pdf

Most apple growers in China operate on a very small scale. There are approximately 4.3 

million apple growers in China, and the average size of an orchard is 1.3 acres.

17 Apple 

production in China is labor-intensive, requiring significant labor resources to plant, tend, and 

harvest the crop. China’s low labor costs were a key factor to the industry’s competitiveness,

18

although labor costs have been increasing in recent years.

The Fuji variety accounts for about 70 percent of China’s apple production, a 

concentration that sharply differs from the diverse apple varieties produced in the United States 

(Figure 7).

19,20

 

17 Source: China Agriculture Industrial Information Center and Washington Apple Commission.

18 USITC, “China's agricultural trade: Competitive conditions and effects on U.S. exports” USITC Publication 4219, 

March 2011. http://www.usitc.gov/publications/332/pub4219.pdf

19 In China, growers are also planting newly introduced varieties from New Zealand, Australia, Japan, France, and 

other European countries; however, Fuji variety apples still dominate acreage and production.

20 USDA-FAS GAIN report, “China – Fresh deciduous fruit annual 2003” September 15,2003.

0

1

2

3

4

5

6

7

8

 -

 1,000,000

 2,000,000

 3,000,000

 4,000,000

 5,000,000

 6,000,000

 7,000,000

 8,000,000

Yield (tonns/acrea)

Acreage

China Apple Total Acreage and Yield

1978 - 2011 (in acres)

Area Planted (Acre) Yield (tons/acre)
23

Figure 7. Fresh apple varieties in China and the United States (in percent shares of total apple 

production), 2011

Source:

China – Mo, Sheng and Tian, Ling, 2012. “当前国内外苹果主栽品种的构成与发展趋势(translation: The current 

composition and development trend of key apple varieties planted in and out of China)” Yantai Fruits 1:37, 

http://wenku.baidu.com/link?url=oohzn1_ZyOUIsOolrt0aXZ0pEj4-ojnb3nnyYuIv74ZiQ5Z1sgSGOF0k9ArgSu8TNga46R9EX1dhAgMaMaJSfabV6Yu8yxFZ3I8pd1gJbK)

U.S.A. – U.S. Apple Association/USDA-ERS Apple Statistics

Note: In China, other varieties include Hanfu, New World, Chiaki, American Eight, etc. 

In the United States, other varieties include Ambrosia, Lady Alice, Pinata, Ginger Gold, Golden Supreme, Pacific 

Rose, Sonya, etc.

Note: Honeycrisp variety is not itemized in the 2011 U.S. fresh apple data, however, its popularity is growing. In 

2011, for example, shares of bearing and non-bearing trees for the Honeycrisp variety in the State of Washington 

were 4.8 percent and 23.2 percent of its total of bearing and non-bearing trees, indicating a strong interest by 

Washington apple growers to cultivate the Honeycrisp variety. 

Apple trade by China

China is a net exporter of fresh apples. China’s trade surplus (exports minus imports), in 

value terms, has been consistently increasing, from $35 million in 2000 to $737 million in 

69.6%

9.2%

6.8%6.3%

China Fresh Apple Varieties 

2011

Fuji

Delicious

Qinguan

Gala

Guoguang (Ralls)

Arima

Golden Delicious (HuangYuanShuai)

Jonagold

Red King

Other varieties

24%

15%

8% 11% 8%

4%

11%

U.S.A. Fresh Apple Varieties 

2011

Red Delicious Gala

Golden Delicious Granny Smith

Fuji McIntosh

Rome Empire

Cripps Pink Braeburn

Idared York

Jonathan Cortland

Jonagold Cameo

Stayman Newtown

R.I. Greening Northern Spy

Other varieties
24

2012.21 In terms of quantity, China’s trade surplus peaked in 2008 at 1,051,000 MT and declined 

to 822,000 MT in 2012 (Figure 8).22

Figure 8. China and Hong Kong fresh apple trade surplus (in $ million and 1,000 MT), 2000-

2012

Source: APHIS analysis based on Global Trade Atlas data.

Note: Export values for China and Hong Kong are based on Free On Board (F.O.B.) prices and import values for 

China and Hong Kong are based on Cost, Insurance, and Freight Import Value (C.I.F.) prices.

China’s export markets are concentrated in Russia, Southeast Asia, and the Middle East. 

Chinese fresh apples also have been exported for more than a decade to Canada; however, 

Canada accounted only for 0.4 percent of total Chinese fresh apple exports in 2012. In fact, the

combined export volume to Canada, European Union (EU) member countries, Australia and 

Mexico is very small (0.8 percent of total fresh apple exports by China in 2012), and has

significantly declined, from 45,267 MT in 2007 (4.4 percent of Chinese apple exports) to 8,273

MT in 2012. 

 

21 Update for the FRFA: In 2013, Poland became the world’s largest exporter of apples, by quantity, surpassing 

China. In terms of export value, the United States remained the world’s largest exporter of apples in 2013.

22 Significant quantities of fresh apples that come into mainland China through Hong Kong as re-exports are 

included. Since Hong Kong’s apple exports are negligible, the net trade surplus is smaller than it would be for 

mainland China alone.

35 

584 

737 

214 

1,051 

822 

 -

 200

 400

 600

 800

 1,000

 1,200

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Us$ million/1,0

0

0

M

T

China and Hong Kong Fresh Apple Trade Surplus

2000-2012, Surplus = Exports -Imports

Value (US$ million) Quantity (1,000 MT)
25

Average 2012 export prices of fresh apples from China to the aforementioned countries 

were: $1.50/KG (Canada), $1.10/KG (EU), $1.83/KG (Australia) and $1.55/KG (Mexico). These

average export prices are consistently higher than the average export price for all 67 countries to 

which China exported fresh apples ($0.98/KG). Figure 9 compares average prices of fresh apples 

that were imported and exported by the United States and China. Average prices associated with 

the U.S. fresh apple imports have been trending at a steady pace of around $0.89/KG, while the 

unit value for China’s imported fresh apples has increased substantially, from $0.46/KG in 2000 

to $1.50/KG in 2012. U.S. fresh apple export prices have been consistently higher than China’s 

export prices, reflecting the two countries’ different export markets. 

Figure 9. U.S. and China –Average prices for imported and exported fresh apples ($/KG), 2000-

2012

Source: APHIS analysis based on Global Trade Atlas data.

Note: Export values for China are based on Free On Board (F.O.B.) prices and import values are based on Cost, 

Insurance, and Freight Import Value (C.I.F.) prices.

Export values for the United States are based on Free Along Ship Export Value (F.A.S.) prices and import values are 

based on Custom Import Value (C.V.) prices.

It is reasonable to expect that prices for fresh apples exported by China to the United 

States would be similar to the prices paid in Canada, the EU, Australia, and Mexico. Since the 

0.56

0.89

0.58

1.24

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

2000200120022003200420052006200720082009201020112012

U.S. Fresh Apple Trade

Avereage Prices: 2000-2012

Import ($/KG) Export ($/KG)

0.46

1.50

0.32

0.98

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

2000200120022003200420052006200720082009201020112012

China's Fresh Apple Trade 

Average Prices: 2000-2012

Import ($/KG) Export ($/KG)
26

trend for U.S. fresh apple import prices have been steady at around $0.89/KG, Chinese apple 

imports are not likely to compete with domestic U.S. apples solely on price.

The U.S. Embassy Beijing-Agricultural Affairs Office estimates that the quantity of fresh 

apples imported from China by the United States would likely be less than 10,000 MT per year.

23

This upper range of 10,000 MT is equivalent to about 5 percent of current U.S. apple imports and

is 20 percent more than China exported in 2012 to Canada, the EU, Australia and Mexico 

combined. It is also equivalent to 0.44 percent of the U.S. domestic supply in MY2012/13 of 

2,286,800 MT (production plus imports minus exports). The relatively high price of fresh apples

exported by China to markets similar those of the United States, China’s limited varieties, and its

robust domestic demand are underlying factors supporting our expectation that the rule would 

result in relatively low volumes of fresh apples imported from China.

Potential Effects

Consumers make their purchasing decisions for fresh apples based not only on price but 

also qualitative attributes such as variety, flavor (acids, sugars, aroma), texture (crispness, 

firmness, juiciness), appearance (color, shape, size), freshness, perceived health benefits, 

production method (organic, conventional), and product origin (local, regional, domestic, 

import). Fresh apples imported from China would compete with other available fresh apples in 

the U.S. market based on these product attributes. 

We expect that the volume of fresh apples to be imported from China will be relatively 

small, no more than 10,000 MT annually, which is the equivalent of less than 0.44 percent of 

U.S. domestic fresh apply consumption and less than 5 percent of U.S. imports in 2012. We 

 

23 We consulted with the Agricultural Affairs Office of the U.S. Embassy Beijing in estimating that the U.S. market 

for fresh apples from China would be less than 10,000 MT per year.
27

expect the majority of apples imported from China would be the Fuji variety, as about 70 percent 

of apples produced in China consists of that variety and the majority of apple varieties being 

exported from China is of the Fuji variety. 

We expect that most of China’s fresh apple would likely be shipped to West Coast ports, 

primarily ones in California and be distributed through Asian ethnic supermarkets to Asian 

communities in the United States together with fresh pears (Ya pears, fragrant pears and sand

pears) which are currently imported from China. California is the largest market for Washington 

apples, therefore, we expect that the largest effects of the rule would be borne by Washington 

and California apple growers, particularly Fuji apple growers, which consisted of about 8 percent 

of apple varieties in 2011, and to an extent by apple producers in neighboring States. If the 

Washington apples were diverted to markets currently served by other U.S. apple growers, 

producers in other States could face increased competition.

While China’s interest in obtaining market access to the United States for its apples is a 

recognized concern of the U.S. apple industry and by the general public, U.S. apple trade groups 

have publicly acknowledged the importance of fostering stable bilateral trade with China by 

making progress on their market access request.

24 As of the time of writing this analysis, China 

continues to ban the importation of Red Delicious and Golden Delicious, two varieties which 

China had allowed to enter from three States: Washington, Idaho, and Oregon. As a 

consequence, apples which would have been exported to China have been diverted to domestic 

 

24 Letters submitted to APHIS by the Washington Apple Commission, The U.S. Apple Association, and the U.S. 

Apple Export Council, dated July 22, 2013, August 20, 2013, and September 9, 2013, respectively.
28

markets or other overseas destinations, contributing to downward pressure on domestic fresh 

apple prices.25

U.S. domestic apple consumption remains relatively flat, and, in order for the U.S. apple 

industry to grow, it needs to rely on global trade. The example of China’s ban of U.S. fresh 

apples and how it can affect the U.S. domestic market illustrates the close linkage between 

global and domestic markets. Given APHIS’ determination that the rule will not result in 

significant adverse impacts on plant health, the rule could provide additional trade opportunities 

for the two countries.

Prevalence of U.S. Small Entities

Small-entity apple producers may be directly affected by the rule, especially those that 

produce the Fuji variety. Other small entities that may be affected include auxiliary industries 

which support the production and distribution of fresh apples in the United States, as well as 

importers of fresh apples. Potentially affected entities are classified within the following 

industries, according to the North American Industry Classification System (NAICS): Apple 

Orchards (NAICS 111331), Postharvest Crop Activities (except cotton ginning) (NAICS 

115114), Fresh Fruit and Vegetable Merchant Wholesalers (NAICS 424480), Pesticide and 

Other Agricultural Chemical Manufacturing (NAICS 352320), Farm Product Warehousing and 

Storage (NAICS 493130), Nursery and Tree Production (NAICS 111421), Fruit and Vegetable 

Markets (NAICS 445230), Packing and Crating (NAICS 488991), General Freight Trucking, 

local (NAICS 484110), Wood Container and Pallet Manufacturing (NAICS 321920). 

 

25 The implication of the Washington fresh apples shipped to the eastern U.S. instead of exported to China is 

described by the Fruit Grower News “Are Chinese apples the biggest threat?” 

http://fruitgrowersnews.com/index.php/magazine/article/are-chinese-apples-the-biggest-threat 
29

Establishments classified within Apple Orchards are considered small by the Small 

Business Administration (SBA) if annual sales are not more than $750,000. According to 2007 

Census of Agriculture data, there were 25,591 farms classified within Apple Orchards in 2007. 

Average annual sales per apple grower are estimated to have been about $102,000 in 2007.26

Clearly, apple growers are predominantly small entities according to the SBA standard of 

$750,000. 

Establishments classified within Postharvest Crop Activities (except cotton ginning) 

(NAICS 115114), are considered small by SBA standards if annual sales are not more than $7 

million. The percentage of establishments that meet this standard is not known; neither the 

Census of Agriculture nor the Economic Census reports revenue for these establishments.

Establishments classified within Fresh Fruit and Vegetable Merchant Wholesalers 

(NAICS 424480) are considered small by SBA standards if they employ not more than 100 

persons.

27 In 2007, there were 5,074 fresh fruit and vegetable merchant wholesalers in the United 

States with a total of 104,749 paid employees, or on average, 21 paid employees per 

establishment. Out of the 5,074 vegetable merchant wholesalers, about 83 percent of the 

establishments in this category employed fewer than 100 people.28 It is likely that domestic fruit 

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

entities.

Establishments classified within Pesticide and Other Agricultural Chemical 

Manufacturing (NAICS 352320) are considered small by SBA if they employ no more than 500 

 

26 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.

27 U.S. Small Business Administration, Table of Small Business Size Standards http://www.sba.gov/content/tablesmall-business-size-standards 

28 U.S. 2007 Economic Census http://www.census.gov/econ/census07/
30

employees. In 2007, there were 240 of these establishments in the United States with a total of 

10,039 paid employees, or on average 42 paid employees per establishment. According to the 

2007 Economic Census, all the 240 Pesticide and other Agricultural Chemical Manufacturing 

establishments employed fewer than 100 people.29

Establishments classified within Farm Product Warehousing and Storage (NAICS 

493130), are considered small by SBA standards if annual sales are not more than $25.5 million. 

In 2007 there were 1,156 entities with sales revenue less than $25.5 million, which is about 91 

percent of all establishments.30

Entities in Nursery and Tree Production (NAICS 111421) are considered to be small by 

SBA standards if annual sales are not more than $750.000. In 2007 there were 34,532 with 

average sales revenue of $257,786. It can be concluded that virtually all Nursery and Tree

Production are small entities.31

Establishments in Fruit and Vegetable Markets (NAICS 445230) are considered small by

SBA standards if annual sales are not more than $7.0 million. APHIS does not have information 

on the size distribution of these businesses, but according to the 2007 Economic Census there 

were 2,938 with average annual sales of $1.1 million.

Establishments in Packing and Crating (NAICS 488991) are considered to be small by

SBA standards if annual sales are not more than $25.5 million. APHIS does not have information 

 

29 Ibid

30 Ibid

31 U.S 2007 Agriculture Census table 46. Selected characteristics of farms by North American Industry 

Classification System 

http://www.agcensus.usda.gov/Publications/2007/Full_Report/Volume_1,_Chapter_1_US/st99_1_046_046.pdf
31

on the size, but the latest Economic Census states that in 2011 there were 1,243 packing and 

crating establishments.32

Entities in General Freight Trucking, local (NAICS 484110) are considered to be small 

by SBA standards if annual sales are not more than $25.5 million. APHIS does not have 

information on their size, but the latest Economic Census states that in 2011 there were 26,585 

establishments.33

Establishments in Wood Container and Pallet Manufacturing (NAICS 321920) are 

considered to be small if establishments employ no more than 500 employees. APHIS does not 

have information on the average number of employees per establishment in this industry.

Projected Reporting, Recordkeeping, and Other Compliance 

Requirements

Reporting and recordkeeping requirements associated with the rule are discussed in the 

rule under the heading "Paperwork Reduction Act."

Steps taken by APHIS to minimize Significant Economic 

Impacts on Small Entities

Based on our review of available information, APHIS does not expect the rule to have a 

significant economic impact on small entities. In the absence of significant economic impacts, 

we have not identified alternatives that would minimize such impacts.

 

32 U.S. 2007 Economic Census http://www.census.gov/econ/census07/

33 Ibid