Keeping orchards competitive

Allan Brothers, Inc., in Yakima, Washington, are among the adventuresome few who go out of their way to find and try new ideas. Travis Allan (right) and Tom Auvil with the Washington Tree Fruit Research Commission explain how a third-leaf Honeycrisp block

Today’s fruit growers will need to rank in the top 30 percent of the world’s producers if they’re going to be successful over the next 15 to 20 years.

That was the message Dr. Clark Seavert, an agricultural economist with Oregon State University, delivered at a Fruit School on Competitive Orchard Systems held in Washington State earlier this year.

To be in that top 30 percent, growers will need to adopt new orchard systems and technologies in order to reduce the financial, production, marketing, and human resource risks associated with growing fruit, he said.

COS 2015 is a project involving scientists and extension educators in the western United States that aims to help orchardists adopt more competitive systems.

"The challenge I see is there’s a small percentage of our current orchard systems that can achieve a reasonable rate of return on investment or have the ability to utilize technologies efficiently to stay in business," Seavert said.

The National Tree Fruit Technology Road Map, which set a goal of reducing the cost of producing the highest quality fruit by 30 percent by the year 2010, was the ­impetus for COS 2015.

Agricultural producers are typically slow to adopt new technologies, Seavert said. An economist some years ago categorized them as follows:

• The adventuresome few – 5 percent

• The respected few – 5 percent

• Early adopters – 10 percent

• The deliberate majority – 70 percent

• The laggards – 10 percent.

In the tree fruit industry, the adventuresome few are the growers who are out on the cutting edge, who travel around the world and are connected with other industries. They’re the ones who had Fuji in the ground before people could even spell it and had signed up to plant branded apples from other countries, such as New Zealand, before most people even knew about them.

The respected few are growers who think outside the box and are eager to experiment with new ideas. They are leading the technological changes in the industry.

The early adopters are the ones who don’t hesitate to try something new when it becomes available. They’re financially set and are trying to manage their resources in an efficient way. "They see it and they want to grab it, and they want to be able to make their money as quickly as they can," Seavert explained. "They’re the people who planted Fuji apples when they were returning $1,000 a bin."

Growers in the deliberate majority don’t change what they’re doing until they see over the fence that something works. They’re the ones who planted Fuji when it was bringing $250 a bin.

The laggards will not change, no matter what happens, he said. They’re still growing Red and Golden Delicious or starting to grow Gala.

"With Competitive Orchard Systems 2015, we’re looking at shifting that curve," Seavert said. "How do we help you become more of an early adopter?"

Efficiency

The need for greater efficiency is driven by such factors as the increasing cost and scarcity of labor, the rising cost of fuel, retail consolidation, the falling value of the dollar, and political implications, he said. The cost of producing apples, pears, and cherries has increased by between 5.5 and 8 percent annually for the past five years.

A COS orchard block is one that produces target fruit that returns a profit to the grower after all the growing, harvesting, and packing costs, Seavert explained. Target fruit is different for every grower and every block because the markets and the costs of production differ.

Target fruit compensates the grower for the opportunity costs and borrowed funds to establish the block. The return on investment must compensate the grower for inflation as well as the risks involved in being in the business.

"Growing fruit is very, very risky," Seavert said, noting that at least a 15 percent return on investment is required.

The first phase of the COS 2015 project is an inventory of competitive orchard systems that meet certain economic criteria. A multidisciplinary team of researchers, extension educators, and growers will then evaluate the potential for a particular orchard system to accommodate technologies that are needed to keep growers competitive. Growers will need information on how to adapt such systems to their locations and ­incorporate them into existing plantings. The concepts will be explained during meetings, tours, and conferences.

"Adoption of new orchard systems and technologies is essential in order for our fruit industry to remain competitive," Seavert emphasized.

The Fruit School was presented by Washington State University ­Extension and the Washington Tree Fruit Research Commission.