Apple Price and Production Forecasts for Maine and the United States

An econometric model of U.S. and Maine apple production and prices was estimated with ordinary least squares multiple regression. A Gauss-Seidel solution technique was used to examine the equation system goodness of fit and to forecast endogenous variable values. Results indicate that supply expansion in the U.S. and Maine will continue, but Maine’s slower rate of increase will erode its market share. Apple prices for the U.S. and Maine are Dredicted to decline in rerd terms bv the vear 2000 if inflation rates exceed 3 percent annually during the period 1982to 2000. “ Apples are the second most important crop in Maine as measured by gross producer re-ceipts. The average size of the 1980 to 1982 apple crops was 84.5 million pounds with a farm level value of almost 13 million dollars (U. S.D.A.). However, the apple industry gen-erates additional income which is shared by processors, equipment and chemical dealers, handlers, year-round and harvest labor. Maine is an important regional supplier of apples con-tributing approximately 25 percent to total New England production. Nationally, how-ever, Maine’s share of total production is about one percent, Thus its annual and long-term economic prospects are greatly influ-enced by the national apple situation. The U.S. apple industry is in a transitional period marked primarily by the rapid adoption of size-controlled apple trees, often referred to as dwarf or semi-dwarf trees, which are re-placing standard-size trees. The size-con-trolled trees have the following advantages over standard seedling trees: their smaller size permits more intensive planting, resulting in more bearing surface per acre and higher average apple yields; the small trees on clonal rootstock result in earlier fruit bearing; the small tree size permits better spray penetra-tion, better air movement and greater light penetration leading to improved fruit quality; the small size and tendency for less vegetative growth result in reduced labor requirements for pruning, brush removal, thinning and har-vesting (Downy et al.). These advantages re-The authors are, respectively, former graduate student and Assis