We did our best to run apples we would normally juice through our peeler plants. While we learned we can work with lower quality fruit, and it improves our processing flexibility, there is a cost associated with doing it. It isn’t as efficient to run juice fruit through peeler processes, so the cost is higher and yields are generally lower.

As in years past, all proceeds were paid in cash. However, it is the first time since Fiscal 1992 that your cooperative has not been profitable; returns to our grower-owners for Fiscal 2007 are right at “break even.”

As we move into Fiscal 2008, we have put our lessons learned into practice. All indications are that this year’s crop is of high quality—great color, good size, no weather damage. Another great year for growers; another tight year for Tree Top.

Accordingly, we’ve developed a conservative raw product forecast and adjusted our sales and marketing plans to fit a shorter crop. We’ve examined our product mix and are focusing on producing those items that provide a higher margin. We’re working with our customers to ensure we’re not over-committed, considering a smaller raw product supply. We’re adjusting our prices. And, we’re changing our fundamental thinking about what is “normal.”

After several abundant crops, changes in farming practices, and root stocks that result in higher yields and better quality apples, it might be easy to believe a large crop of processor apples would be the norm, and the smaller crop the anomaly. We’re beginning to think the opposite is true. This year’s shortage of processor apples does not appear to be restricted to the Northwest; it may be worldwide.