Core Acquisition: An Apple Asset in Washington State

In early 2018, AgIS acquired a 400-acre apple asset in Washington. The Pacific Northwest, with Washington being the leading producer, provides nearly 70 percent of America’s fresh apples. The varieties on this investment platform include organic plantings such as Gala, Honey Crisp, Golden Delicious, Granny Smith, Red Delicious and Cameo apples. Conventional varieties include Gala and Golden and Red Delicious.

apple development trellis system

With any apple investment we make for clients, we look for assets that will enable us to grow a well diversified crop variety. This particular asset was attractive because a larger percentage of the property than is normally the case was suitable for organic varieties (62 percent). We believe that organic apple consumption will continue to increase over time and that certain organically-grown varieties will command premium pricing over conventional varieties. This is leading us to pursue other opportunities to invest in both established orchards and redevelopment opportunities.

Apple pricing is volatile and is influenced by several, inter-related factors, including consumer trends, supply, export demand, currency changes and weather. Buying trends and projections are particularly important to understand prior to planting any new apple variety because varieties can fall out of favor based on consumer preference, which is often influenced by the development and aggressive marketing of newer varieties. AgIS maintains strong industry connections and has significant experience investing in the apple sector. We also conduct extensive research prior to placing capital in any development or redevelopment opportunity to ensure that we are keeping pace with market demands and consumer preferences. At present, we are particularly interested in investments in both the Honey Crisp and Smitten apple varieties.

apple bins during harvest

Disclaimer: Our belief of future market performance is based on expectations that may or may not come true. Investors should perform their own due diligence before undertaking farmland investments.