Diversification helps cling-peach farmers


Issue Date: January 23, 2019
By Christine Souza
Peach farmer Peter Martini of Martini Farms in Escalon says despite the many challenges facing cling peaches, he is able to make a profit growing the crop. The 2018 cling-peach crop was the smallest in modern history, according to the California Canning Peach Association.
Photo/Christine Souza
Misael Meza, an employee of Martini Farms, prunes cling-peach trees. Farmer Peter Martini says the orchards were designed to spread activities evenly, especially during harvest, in part to help retain employees.
Photo/Christine Souza

Facing stacked odds, California cling-peach growers say they have found ways to make growing canning peaches work—at least for now—despite the many challenges facing the commodity.

"I'm one of the few to still plant peaches. I need them for diversification," said farmer Peter Martini of Martini Farms in Escalon.

"I'm afraid to have just nut crops," Martini said, saying that specializing in one crop "puts you in a dangerous position to have everything in one basket."

But Martini and other cling-peach growers have in recent years faced a variety of challenges, including flat or shrinking demand, increased foreign competition, rising employment costs and fewer buyers for their fruit.

Early last year, for example, major processor Seneca Foods Corp. announced the closure of its Modesto facility, which processed peaches and other canned fruit, citing "challenging economic conditions."

California Canning Peach Association President and CEO Rich Hudgins said the 2018 cling-peach crop "amounted to the smallest crop in modern history" at around 256,178 tons, down from the previous year's crop of 295,120 tons.

Hudgins, who addressed the association's 97th annual meeting this week, said domestic canned-peach sales volume continues to shrink. He said national food companies with declining sales must reinvent their brands to remain relevant to today's shoppers.

"We are continuing to be harmed by low-priced, subsidized imports, which are displacing more of our domestic canned-peach production," Hudgins said. "China continues to make inroads into the U.S. domestic market, in both retail and food-service channels."

The announcement of an additional 10 percent tariff on Chinese canned-peach imports, effective last September, and the prospect of increased tariffs this year actually resulted in a spike of import volume, he said, as importers rushed to beat the possible tariff increase.

Employment costs remain a large challenge for cling-peach growers, including an increasing state minimum wage and changes in agricultural overtime rules.

In addition, many farmers have trouble finding enough employees, although Martini said his ranch is designed to spread the labor demand.

"I grow 10 cling-peach varieties and our ranch has been designed to have six to 10 acres come on at a time, so my focus is to keep the workers around and keep them happy," Martini said.

Although use of mechanization has increased for peaches in recent years, Martini said he prefers to hand-harvest the fruit because he can earn a premium price for higher-grade fruit.

Sutter County cling-peach farmer Anthony Laney, who also grows walnuts and almonds, said though cling-peach farmers face many challenges, "a diversification of your business is always wise," to spread out the risk.

"As long as you have the ability to get your crop off, you'll be OK," Laney said. "If you can't, then you're going to have some problems. That's why people are moving to more mechanized crops like almonds and pistachios."

But, he added, "I think peaches have a place in our business. We're good producers and we can meet the challenges."

To partially offset employment cost increases, peach growers will seek higher prices for their fruit in 2019, Hudgins said.

For the 2018 crop, the price to growers was $488 per ton, up $33 from the 2017 price. Hudgins said it is unlikely contracts expiring in 2019 with large canners Del Monte or Pacific Coast Producers will be extended, as canners bring the supply and demand of peaches into balance.

A positive for cling peaches, Hudgins said, is that people are concerned about where their food is grown and how it is processed, giving California cling peaches a valuable selling point over fruit imported from China.

"Many retailers have sustainability or local-sourcing statements on their websites, which are inconsistent with their recent buying decisions," he said. "Their sustainability initiatives cannot involve transporting product over 6,000 additional miles just to increase profit margins."

Hudgins noted that the 2018 Farm Bill contains language strengthening Buy American provisions of the National School Lunch Act.

To increase demand, the cling-peach sector is looking closely at how canned peaches are consumed, and plans to give people "more options to enjoy peaches while away from home," said Laney, who chairs the marketing and promotion committee of the California Cling Peach Board.

"We've done a lot to bring an awareness to cling peaches," he said. "We have a new website, new marketing materials and our message of, 'Peaches are always fresh, always nutritious and always ready.'"

Pointing out that today's peach-growing families have grown canned peaches for many years, Laney added, "We really enjoy growing peaches.

"What gets us up in the morning is being able to perpetuate this business that we've created and to continue it to future generations," he said.

(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.