United States 

Department of 

Agriculture

Animal and Plant 

Health Inspection 

Service

April 2014

Initial Regulatory Flexibility Analysis

Proposed 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). The proposed rule would allow the 

importation of fresh apples from China into the continental United States if they are produced in 

accordance with a systems approach to pest risk mitigation. The specified systems approach 

integrates prescribed measures that would cumulatively achieve the appropriate level of 

phytosanitary protection. This analysis evaluates the potential effects of the proposed 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

$909 million in fresh apple trade surplus (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 account for 96 percent

of production. The State of Washington is by far the largest producer, at more than 2.9 million 

MT per year. Almost all apple farms are family-owned, and many of these families have been 

engaged in apple production for many generations. The United States imported 183,000 MT of 

fresh apples, valued at $164 million, in 2012. Virtually all imports came from four trading 

partners: Chile, New Zealand, Canada and Argentina. 

By quantity, China is the world’s largest producer, consumer and exporter of apples.

Apples are the leading fruit produced in China, with production having increased from 2.3 
ii

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. At the same time, its domestic demand for apples has grown to 37.5 

million MT. Unlike in the United States, the China’s apple industry relies marginally on 

international trade – it exported about 3 percent of fresh apples produced and imported 0.1 

percent of fresh apples consumed in 2012, while the United States exported about 30 percent of 

fresh apples produced and imported 9 percent of fresh apples consumed in 2012. 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 accounted for about 70 percent of China’s apple production in 2012. 

China’s heavy dependence on the Fuji variety sharply contrasts to the diverse varieties that are 

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 total China’s 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 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, $1.55/KG) are consistently higher than the average export price for all 67 countries to 

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

apples exported to the United States would be similar to the prices paid by Canada and Mexico. 

Since the trend for U.S. fresh apple import prices has been steady at around $0.89/KG, apples
iii

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

qualitative attributes such as variety, flavor, appearance, freshness, production method, and 

product origin. 

Based on historic trade data, not more than 10,000 MT of fresh apples is expected to be 

imported from China into the continental United States annually, which would be the equivalent 

of about 5 percent of U.S. imports and 0.44 percent of the U.S. domestic fresh apple supply in 

2012. Most of China’s fresh apple exports to the United States would likely be shipped to West 

Coast ports, primarily ones in California. California is also the largest market for Washington 

apples, and any effects of the proposed rule may be borne mainly by Washington and California 

apple growers, in particular, U.S. apple growers of the Fuji variety. U.S. apple growers of other 

varieties and in other areas may also experience limited effects in terms of 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, the industry is challenged by relatively flat 

domestic apple consumption. The industry’s growth can be fostered through expanded global 

trade. Given APHIS’ determination that the proposed rule will not result in significant adverse 

impacts on plant health, the proposed rule could provide additional trade opportunities for the 

two countries.
iv

Table of Contents

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

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

U.S. Apple Production and Trade ............................................................................................... 1

Apple production in the United States.................................................................................... 1

Apple trade by the United States ............................................................................................ 5

China’s Apple production and trade............................................................................................ 6

Apple production in China...................................................................................................... 6

Apple trade by China ............................................................................................................ 10

Reasons Action is Being Considered............................................................................................ 13

Objectives of and Legal Basis for the Rule .................................................................................. 14

Overview of the Action, Affected Entities, and Potential Effects................................................ 15

Conditions of Entry ................................................................................................................... 15

Potentially Affected Small Entities........................................................................................... 17

Potential Effects ........................................................................................................................ 20

Projected Reporting, Recordkeeping, and Other Compliance Requirements............................... 21

Duplication, Overlap, or Conflict with Existing Rules and Regulations...................................... 21

Alternatives to minimize Significant Economic Impacts of the Rule........................................... 22
1

Introduction

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 apple, Malus 

pumila Mill.

1

The proposed rule would allow the importation of fresh apples from China into the 

continental United States if they are produced in accordance with a systems approach to pest risk 

mitigation. The specified systems approach integrates prescribed measures that would 

cumulatively achieve the appropriate level of phytosanitary protection.

2

The Regulatory Flexibility Act requires agencies to evaluate the potential effects of their 

proposed and final rules on small businesses, small organizations and small governmental 

jurisdictions. This initial regulatory flexibility analysis examines the prevalence of small entities

in industries that may be affected by this proposed rule and considers whether its impacts on 

small entities are likely to be significant, as required by section 603 of the Act.

In this introduction, we describe fresh apple production and trade for the United States 

and China. We then discuss the prevalence of small entities in industries that may be affected.

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 are also the second largest fresh apple exporter by quantity

following China, and became the world’s largest apple exporter in terms of export value in 2012. 

The United States commercially produced 4.1 million metric tons (MT) of apples, valued at $3.1

 

1

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

2 Refer “Risk Management Document – Importation of apples (Malus pumila) from China into the continental 

United States.” The document details the risk management measures and choice of appropriate phytosanitary 

measures to mitigate pest risk.
2

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,

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 in 2012 (1,000 metric tons)

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.

 

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

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%)
3

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 

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

 

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 fundamentally different for apples that are sold fresh to consumers; not only price, but 

many other factors such as variety, size, appearance, flavor, freshness, product origin, and production method 

(traditional or organic) are key purchasing factors. 

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
4

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.

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 

 

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

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

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)
5

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. 

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 $909 million in surplus (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 between Canada and the United States benefits both countries due 

to the geographical proximity of producers and key markets.

12

 

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.

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
6

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 

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

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

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

sharp increase in apple production is in response to a robust increase in domestic consumption, sharply contrasts with the 

sharply contrasts with the relatively stable level of U.S. apple production. U.S. apple production grew from 3.4 million 

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%)
7

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 the U.S. and China’s apple production, consumption, and trade in 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 in MY 2012/13) provided for 8.6 percent of domestic consumption, and 29.8 

percent of the apples produced (889,000 MT in MY 2012/13) were exported. In absolute 

quantity, China produced far more apples (33.3 million MT for the fresh market in MY 2012/13) 

than the United States (about 3 million MT); however, China is much less reliant on global trade

of fresh apples than the United States. In MY 2012/13, China imported only 43, 000 MT of 

 

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.

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.
8

apples (0.1 percent of its domestic consumption) and exported 1 million MT of apples (3.1

percent of its domestic production). In MY 2012/13, 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

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 Nut Tree 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 (

 

14 China’s import share would be higher if fresh apple re-exports from Hong Kong were included.
9

Figure 6). By contrast, average yield per acre has been steadily increasing since 1992 and 

averaged 7.1 MT/acre in 2011.15,16

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

 

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.

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)
10

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 are 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 diversity of apple varieties produced in the United 

States (Figure 7).

19,20

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

production), 2011

 

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.
11

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.

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 2012. 

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).21

 

21 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.

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% 8% 11%

4%

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
12

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. 

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 

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)
13

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 by Canada, the EU, Australia, and Mexico. Since the 

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 US apples solely on price.

USDA-FAS Beijing 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.

22 This upper range of 

 

22 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.

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)
14

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 proposed rule would 

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

Reasons Action is Being Considered

The proposed rule is in response to a request made by the NPPO of China for APHIS to 

allow the importation of commercial consignments of fresh apples (Malus pumila) from China

into the continental United States. Risks posed by certain plant pests would be appropriately 

mitigated using a systems approach.23 The proposed combination of mitigations satisfies APHIS

commitment under the International Plant Protection Convention to allow the importation of 

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

phytosanitary security.

24 APHIS has concluded that the prevention and control measures 

established by China would be sufficient to minimize the risk of plant pest introduction into the 

United States via fresh apple imports.

 

23 APHIS uses a systems approach process when evaluating a request from another country to export plant or plant 

products to the United States. The recommended regulatory action is based on the relevant plant health situation 

existing in the region, proposed risk mitigations that have proven effective in similar situations, and international 

standards.

24 FAO, “International Standards for Phytosanitary Measures (ISPMs) No. 14, The use of integrated measures in a 

systems approach for pest risk management 2002,” http://www.acfs.go.th/sps/downloads/16210_ISPM_14_E.pdf

Updates (January 8, 2014) https://www.ippc.int/publications/use-integrated-measures-systems-approach-pest-riskmanagement, other ISPMs relevant to the proposed rule are: No. 1 (Principles of plant quarantines as related to 

international trade), No. 2 (Guidelines for pest risk analysis), No. 8 (Determination of pest status in an area), No. 12 

(Guidelines for phytosanitary certificates), No. 20 (Guidelines for a phytosanitary import regulatory system), and 

No. 28 (Phytosanitary treatments for regulated pests)
15

Objectives of and Legal Basis for the Rule

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

continental United States from China. The proposed rule would amend the current regulations 

found in Title 7 § 319.56 of the Code of Federal Regulations that grant regulatory authority for 

setting phytosanitary requirements for the importation of fruits and vegetables into the United 

States. The proposed rule 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.

The legal basis for this action is the Plant Protection Act (7 U.S.C. 7701-7772), which 

authorizes the Secretary of Agriculture to prohibit or restrict the importation of any plant product 

if the Secretary determines that the prohibition or restriction is necessary to prevent the 

introduction of a plant pest or noxious weed into the United States. The proposed rule 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.

Overview of the Action, Affected Entities, and Potential 

Effects

Conditions of Entry

The proposed rule would amend the regulations to allow the importation of commercial 

consignments of fresh apples from China into the continental United States only if they are 

produced under the following conditions:

1. An operational workplan detailing the systems approach will be developed by the NPPO of 

China subject to approval by APHIS. All oversight of the program will be done by the NPPO 

of China or their designate. The NPPO of China is expected to maintain program records for 
16

at least one year and provide them to APHIS upon request. APHIS reserves the right to 

require APHIS oversight visits in the event of pest interceptions or other problems.

2. Commercial consignments only may be exported.

3. Apples must be grown at production sites (orchards) registered with the NPPO of China. The 

growers with registered production sites will be responsible for following the phytosanitary

measures agreed upon by APHIS and the NPPO of China, including applying control 

measures that are authorized for use in China and the United States of America to reduce pest 

populations.

4. The NPPO of China is responsible for ensuring that registered places of production are 

inspected twice every season, with special emphasis on the control of quarantine pests listed 

above.

5. All apples must be bagged individually by the time they reach 2cm in diameter.

6. Fallen fruit must be removed from orchards weekly.

7. Packinghouses must be registered with the NPPO of China and must have a system of box 

markings allowing traceback to individual production sites.

8. Packinghouses must have a system of quality control of fruit, including culling to remove all 

leaves and any damaged or infested fruit.

9. All apples must undergo washing and waxing.

10. The NPPO of China must inspect a biometric sample of the packed-out apples for pests and 

disease. The sample size for this inspection will be specified in the workplan.

11. The NPPO must issue a Phytosanitary Certificate indicating that the consignment was 

inspected and found free of pests.
17

12. An APHIS approved treatment is required for fruit produced south of 33rd parallel, to 

mitigate Bactrocera dorsalis fruit flies. Currently the only APHIS approved treatment for 

Bactrocera dorsalis in apples is T108, fumigation plus refrigeration of fruits, but any other 

treatment subsequently approved by APHIS may be used.

13. Upon detection of Monilinia fructigena or Monilia polystroma in a consignment for export, 

APHIS may reject the infected consignment and reject the production site for importation to 

the United States for the remainder of that season. If Monilinia fructigena or Monilia 

polystroma is detected in more than one registered production site in a Province, APHIS may

prohibit the importation into the United States of apples from the Province until an 

investigation is conducted and APHIS and the NPPO of China agree that appropriate 

remedial actions have been taken. Procedures for disqualification of production sites based 

on pest detections in export consignments will be detailed in the workplan approved by 

APHIS and the NPPO of China. 

14. The exportation to the United States of apples from the rejected production site may resume 

in the next growing season if an investigation is conducted and APHIS and the NPPO of 

China agree that appropriate remedial actions have been taken.

15. The fruit will be inspected by U.S. Customs and Border Protection (CBP) at the first U.S. 

port of entry for pests and diseases. 

Potentially Affected Small Entities

Small-entity apple producers may be directly affected by the proposed 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 
18

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). 

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 2007.25

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.

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

 

25 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.

26 U.S. Small Business Administration, Table of Small Business Size Standards http://www.sba.gov/content/tablesmall-business-size-standards 
19

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.27 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) is considered small by SBA if they employ no more than 500 

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.28

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.29

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.30

 

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

28 Ibid

29 Ibid

30 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
20

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 

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

crating establishments.31 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.32 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; we welcome public input to help us gather this information.

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), juiciness, crispness, 

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

method (organic or conventional), and product origin (local, regional, domestic or import). Fresh 

apples imported from China would compete with other available fresh apples in the U.S. market 

based on these product attributes. 

 

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

32 Ibid
21

As described, the volume of fresh apples expected to be imported from China, no more 

than 10,000 MT annually, is relatively small and is the equivalent of about 5 percent of U.S. 

imports and 0.44 percent of U.S. domestic fresh apply supply in 2012. We 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. 

Most of China’s fresh apple exports to the United States would likely be shipped to West 

Coast ports, primarily ones in California. California is also the largest market for Washington 

apples. Therefore, we expect that the largest effects of the proposed rule would be borne by 

Washington and California apple growers, particularly Fuji apple growers, and to an extent by

apple producers in neighboring States. To the extent that the Washington apples are 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, 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.

33 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 markets or other overseas

destinations, contributing to downward pressure on domestic fresh apple prices.34

 

33 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.

34 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 
22

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

industry to grow, it needs to foster 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 proposed rule would not result in 

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

opportunities for the two countries.

Projected Reporting, Recordkeeping, and Other Compliance 

Requirements

Reporting and recordkeeping requirements associated with the proposed rule are 

discussed in the rule under the heading "Paperwork Reduction Act."

Duplication, Overlap, or Conflict with Existing Rules and 

Regulations

APHIS has not identified any duplication, overlap, or conflict of the proposed rule with 

other Federal rules.

Alternatives to minimize Significant Economic Impacts of 

the Rule

Based on our review of available information, APHIS does not expect the proposed rule 

to have a significant economic impact on small entities. We have prepared this initial regulatory

flexibility analysis because our understanding of possible economic effects of the rule on small 

entities is incomplete. In the absence of apparent significant economic impacts, we have not 

identified alternatives that would minimize such impacts.