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These are troubled times for American apple producers, says the Agriculture Department.

Recent concern about apples treated with Alar and other chemicals is part of the problem for growers, but so is the expansion in apple production, both domestically and worldwide."Adding to the pressure, consumers could have cut demand for apples as health concerns arose of the use of the pesticide Alar," says economist Amy Sparks. "It remains to be seen if Alar use will permanently curtail consumer demand."

Domestic demand for apples is "relatively flat" right now, while competition in the international market is intensifying, Sparks writes in the May issue of Agricultural Outlook magazine.

"If demand does not increase, many U.S. producers may be forced to leave the business," she said.

The USDA, Food and Drug Administration and other government agencies have declared the U.S. apple supply safe to eat. But the recent Alar scare raised questions about the safety of apples treated with the chemical, prompting a number of schools across the country to temporarily ban apples from lunchrooms.

Sparks, who works for the department's Economic Research Service, said new plantings in the late 1970s and early 1980s are pushing up U.S. apple production. A new planting comes into production in 5 or 6 years and reaches nearly full capacity after 8 or 9 years.

"When the new plantings begin bearing at full capacity, output will be comparable to 1987, the largest crop in U.S. history," she said.

Total production in 1987 - the marketing year runs from July through the following June - was a record 4.8 million metric tons, up from 3.6 million tons in each of the two previous years. The preliminary estimate for 1988 is 4 million tons.

Sparks said the decline for 1988 is due to the drought in some areas and because apples, like most tree crops, are cyclical. After a year of high yields, production is smaller the following year. Also, although new trees are coming into production, other orchards are growing older and are yielding less.

One factor has been a deterioration in the U.S. apple trade balance, she said. Imports reached 121,000 tons in 1987-88, more than double the volume of the mid-1970s. Part of the reason was the sharp drop in the value of Chile's peso against the dollar, which lowered the price of Chilean apples.

Meanwhile, U.S. fresh apple exports rose to 305,000 tons in 1980-81 from 120,063 tons in 1976-77. However, exports declined after 1980-81 when the dollar began rising against vitually all U.S. apple importers.

"Exports for the 1987-88 marketing year, at 293,000 tons, were 70 percent higher than the previous year," Sparks said.