Co-op launches management venture
Chelan Fruit can manage orchards for growers leaving the business.
Fruit packing cooperatives are becoming something of an oddity in the Washington tree fruit industry, which is dominated today by large, private, vertically integrated companies.
But Chelan Fruit Cooperative is taking steps to make sure it continues to thrive even as the fruit industry evolves.
Years ago, north central Washington (from Wenatchee to the Canadian border) was dotted with fruit cooperatives. Over the years, through consolidation, the number of warehouses has dropped dramatically. Thirty years ago, the Wenatchee district had 84 packers. Twenty years ago, it had 41. Today, a little over 20 remain, of which four are cooperatives.
Chelan Fruit Cooperative, whose roots date back to 1921, came into being in 2004, following several mergers. In 1995, the Trout cooperative at Chelan merged with its neighbor Blue Chelan. Then in 2004, Trout-Blue Chelan merged with Magi in Brewster.
Magi, which originated as the Brewster Cooperative Growers, had merged over the years with Omak Fruit Growers, Brewster Mutual Growers Association, Caribou Growers, Star Crisp Growers, and Crisp-N-Spicy Growers.
One of the strengths of the cooperative is unity of the growers, says Jim Colbert, director of food safety and business relations at Chelan Fruit. Cooperatives were formed to give small growers a voice and clout. But the cooperative structure, with a manager and board of directors, can make it less nimble than a private business, which has led to the demise of some.
Chelan Fruit’s 250 members are typically family farmers with relatively small acreages. As those growers retire or sell their orchards, the cooperative’s membership and fruit volume has been shrinking. But, just like a private packer, the cooperative needs to keep its facilities and machinery running at capacity for the greatest efficiency.
This year, Chelan Fruit formed a new orchard management venture in partnership with AgriMACS, an independent orchard management company based in Pateros, in an effort to keep orchards from going out of production or being sold to growers who would take the fruit to other packing houses.
The new partnership is ready to manage orchards for growers who want to bow out for any reason. Perhaps they’re reaching retirement age, or they’re tired of sleepless nights worrying about labor shortages. Or they might no longer want to deal with food safety issues and all the documentation involved.
Colbert said large, vertically integrated companies are somewhat better able to address the issues that the industry has to face today. A large company can hire people to deal with the various regulations, but the smaller grower has to do it all and shoulder the costs.
“For that small grower who has to make sure the tires are up on the tractor, move the bins, and write out the checks, and do all that, now we’re telling him ‘You have to document your worker training, and, by the way, of those 18 guys who have always come up from California, only eight of them have called this year.’ That’s the reality of their lives right now, and as they get older, they say ‘I’m tired of this.’ It’s a terrible strain for them.
“I think that’s the biggest single aggravation for the farmer today, particularly the small farmer,” he added. “To me, they’re hands-in-the-dirt type of people, and these things have all taken them away from that. What they see is, ‘I still own that orchard, but I’m paying someone else to do the farming, and I’m doing the business management and adhering to regulations,’ and that’s not the fun part of why we’re farmers.”
AgriMACS, Inc., operated by Tom Gausman and Tim McLaughlin, manages more than 3,000 acres of orchards and vineyards from Bridgeport in the north to the Oregon border to the south on a fee-for-service basis.
The partnership can manage the whole growing process, including budgeting, horticultural services, human resources, and regulatory compliance, or provide just some of those services. Chelan Fruit might also buy or lease orchards, something it hesitated to do in the past for fear of appearing to compete with its growers. Nowadays, most packing houses have their own orchards that generate captive tonnage.
Chelan Fruit’s new orchard management venture can also help growers with their succession plans, Colbert said. For example, when a farmer retires, the children might want to keep the orchard in production but have no interest in farming it themselves. Colbert said one grower in that situation has set up a trust. Chelan Fruit will operate the orchard and distribute the profits to the trust. A replant plan will be developed to make sure that the orchard continues to be viable for a long time to come.
“That’s the ideal thing for us,” Colbert said.