B.C. growers hope for higher prices
Despite hail that pounded Okanagan growers in British Columbia’s Okanagan Valley in Canada this summer, most apples reaching markets are likely to be looking good and fetching better-than-expected prices.
Production Insurance for British Columbia estimates that about half of all fruit orchards in the Okanagan suffered some degree of damage in the storms that battered the valley on July 4 to 6. Apple growers were particularly hard hit, with about 5 percent of the crop written off by the provincial crop insurer in the days following the storms. A further 5 to 10 percent of the crop could be written off later in the season.
Coming on the heels of two years in which average prices dipped as low as 10 cents a pound, the damage wasn’t what apple growers needed, said B.C. Fruit Growers’ Association President Joe Sardinha.
“For any growers who did get hail, it’s another slap in the face,” said Sardinha, who considers himself lucky to have seen damage to no more than a fifth of his orchard. “Growers are in a weakened financial state.”
The storms required growers to make some hard choices regarding their crop, decisions often complicated by a lack of immediate information on the compensation Production Insurance would provide.
Production Insurance products and marketing manager Lonny Steward estimates that 80 to 90 percent of growers have some level of insurance coverage.
But the worst-hit orchards were being inspected first, Sardinha said, leaving some growers with lesser degrees of damage to guess how much thinning they should do to ensure the best possible crop. Without compensation from the insurer, some growers risked making a bad financial situation worse by borrowing $500 to $1,000 an acre to thin a crop that wasn’t actually salvageable.
“Normally, if we’d had decent returns in the last couple of years, it wouldn’t be such a big issue with hail because growers would be in a cash position to say, ‘I’m taking a chance here, but I’m thinning my crop to see if it’s still salvageable.’ But because the cash situation is so poor, there’s an elevated level of frustration among growers,” Sardinha said. “It’s quite a gamble for them.”
An insistence on high-quality fruit from packing houses and retailers puts extra pressure on growers to thin, Sardinha added.
“We have buyers that will no longer take anything that resembles hail-[damaged] fruit,” he said.
“The demand for quality has intensified in the marketplace.”
The quest for quality won’t mean a shortage of fruit flowing to market, however, said Peter Austin, director of domestic sales and marketing with B.C. Tree Fruits, Ltd,. in Kelowna.
“Our preference, and our customers’ preference, is to have clean, non-hail-affected fruit offered,” he said. “But on some of the varieties, on Royal Gala for example, it will be necessary to offer some hail product out to the marketplace.”
Austin hopes to find a buyer for growers’ hail-affected fruit. Though hail-affected fruit typically commands a lower price, Austin believes July’s storms mean a smaller crop that will let growers see better prices this year.
Austin expects B.C. growers to harvest 4 million boxes of apples this year, while Washington State could see as few as 90 million boxes. “That normally means fairly strong pricing,” Austin said.
Growers would welcome wholesale prices five to ten cents a pound higher than last year, Austin said. Given little carryover from previous years and signs that what remains in the market is already seeing stronger prices, he thinks B.C. growers can enjoy a glimmer of hope.
“Most of the major retailers won’t take hail-affected fruit,” he said. “They want clean fruit, and they’re willing to pay the price. So I’m expecting stronger pricing on apples than last year, and hopefully that will offset whatever hail-affected fruit gets sold.”