Plum growers see good crop; tariff could slow sales


Issue Date: August 1, 2018
By Christine Souza
An employee transports just-harvested fresh plums to the Kingsburg Orchards packinghouse in Fresno County. California plum growers report a normal-sized harvest this season, and say they remain optimistic despite the business challenges posed by trade, labor, regulations and water supply concerns.
Photo/Cecilia Parsons
Employees on the packing line at Kingsburg Orchards in Kingsburg sort the Moonlight Mist plum, a late-season variety. The company says it's encouraged by its development of new, late-season plum varieties that extend the season well past the traditional growing season.
Photo/Cecilia Parsons

It's "prime time" for California-grown plums, as one fruit marketer puts it, and farmers report a normal-sized, high-quality crop. But as farmers work to expand the growing season, the U.S./China trade dispute could affect markets for the fruit.

Chad Allred, vice president for sales and marketing at Kingsburg Orchards in Kingsburg, which grows, packs and ships plums and other tree fruit, described late July and early August as "really the best time for plums and is when some of the best varieties are harvested for the year. The flavor has been fantastic."

California plum harvest typically runs from May through September, Allred said, leaving a gap in the market from the time California plums are no longer available until imports arrive from Chile and other countries. But he said the farm has planted exclusive varieties that could extend the season into October, November, and perhaps even December—allowing grocery stores to feature California plums for a longer period.

"We're the only plum growers that extend the season that far into the year," Allred said. "It just started in the last few years, but it's expanding pretty rapidly. The (plum) imports don't usually come in until January, so we are really trying to fill that gap in the market. It is a time when nobody has plums, which is a good thing, but it has to be good-eating fruit."

California farmers produce 100 percent of the fresh plums grown in the U.S., primarily in Fresno, Kings, Tulare and Kern counties. Growing fresh plums on about 18,000 acres in the state, farmers produced about 141,000 tons of fresh plums last year, valued at $137 million, according to the U.S. Department of Agriculture.

But plum growers and marketers will see an impact from retaliatory trade tariffs on California plums destined for China, according to Marcy Martin, director of trade for the California Fresh Fruit Association.

"One-third of all plum exports were destined for China, and so the impact is significant because that's our No. 1 plum export market," Martin said. "The tariff went from 15 percent and it is now at 50 percent, plus about a 15 percent value-added tax, which means someone who is buying a box of plums is now paying 65 percent on top of what they are buying it for."

Unlike peaches and nectarines, she said, plums have had access to the Chinese market, with exports to China valued at about $28 million.

With a decline in sales to China now expected, Martin said, that fruit must go elsewhere—and the interruption in exports also impacts the domestic market for plums.

Most of the fresh plums grown in California go into the domestic market, but Allred notes that fruit exported to Canada, Mexico and Asia could account for as high as one-third of plums grown, depending on the year.

"The increased tariffs have slowed down shipments, but we're shipping a lot of fruit into Canada and Mexico and we still have other export distribution," he said. "I think anybody that has a commodity or an item that is subject to additional tariffs is feeling the effects of it, because there is just not as wide a distribution path that you can move your products to."

Martin said marketers have mixed feelings about the trade dispute.

"China has marched by their own rules for a long time, so we agree with a lot of the rationale behind these tariffs placed by the United States," she said, "but of course, we don't like being the subject of the retaliatory part of it."

This season, growers said, they expect normal-sized crops despite a February cold snap during the early part of the bloom, which resulted in some damage to early plum varieties.

"There was definitely some early damage that happened, and we did lose a little bit of fruit to the bloom, but damage was minimal," Allred said. "As we got to the middle of the season and late season, the crops looked just fine."

John Chandler, a partner at Chandler Farms in Selma, grows plums for SunWest Fruit Co., a Parlier-based grower, packer and shipper, with his harvest staggered from July through September.

"So far, we've had a pretty decent year on the plums," Chandler said, adding that though the price for plums has been good, "the plums—and peaches and nectarines—really run on a market that is like Las Vegas: It's high today and lower tomorrow."

With plums selling well in the short term, he said long-term considerations for fresh plum farmers include high employment costs for a hand-harvested crop, as higher state minimum wages and agricultural-overtime rules take effect.

"What's the long-term profitability of these if the market doesn't start to address these increased costs of production?" Chandler said. "For us, it's kind of a slow death for our relationship with the stone fruit. They are some of my favorite summer crops—I can eat them all summer—but farming is economic. You've got to survive to the next year, and part of that survival is making enough money to pay your bills."

Regarding the future of fresh plums, Allred said Kingsburg Orchards plans for a slight bump in demand in the next few years.

"We planted a little more plums, and others have planted more as well," Allred said. "I think that is a reaction to the fact that people always want good plums. If you have a decent eating one, people will buy them at the store."

(Christine Souza is an assistant editor of Ag Alert. She may be contacted at csouza@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.