An interregional competition model of the U.S. apple industry is constructed. This model includes the consumer products of fresh apples, applesauce and apple juice. The validation of the model showed that it did a good job of estimating consumer's quantity demanded and prices and a reasonable job of estimating utilization. This model was used to study the effects of transportation cost changes on the industry in the short- and intermediate run. The total production and consumption levels changed by moderate amounts with changing transport costs while the utilization of a region's crop was quite sensitive to such changes.