By George Ing
Red Delicious is the principal apple variety; there is a move to higher densities. Significant expansion continues with sagebrush land being put into production, particularly by larger organizations, some with foreign capital. Gala and Fuji dominate new plantings with lesser amounts of Braeburn and a few Jonagold.
Highly sophisticated handling, storing, packing, and packaging systems are incorporated into giant facilities. Sizeable quantities are trucked to waiting ships for export.
Sounds like the apple industry of Washington State? Yes-but wrong! For this is South American apple production in Argentina and Chile. Brazil also is now a production entity.
The setting: trends
South America, second only to China, is increasing apple production more rapidly than any other area of the world. Production is expected to be 19% more in the year 2000 compared with 1993.
The best available statistics indicate Chile has 70,000 acres of apples, up from 50,000 acres in 1980. Production was 897,600 tons in 1994.
Argentina reports about 100,000 acres and 1994 production of 1,226,000 tons. For comparison, Washington State has about 165,000 acres and produced 2,730,000 tons in 1994.
Production increases appear to be generated by several factors.
Locations
The principal Argentine production area is the Rio Negro Valley, about 625 miles southwest of Buenos Aires between the Andes and the Atlantic Ocean. Orchards are mostly on flat ground on the floor of the valley. Although there are thousands (some say 300,000) of acres of potential fruit growing open land on the benches above the river plain, production is near the rivers. Most orchards are surrounded by tall windbreaks to combat spring winds or mistrals from the Andes.
Some Argentine production is on land converted from other crops such as tomatoes. However, much of it is virgin land, taken from sagebrush. Production is centered near the town of Neuquen but runs more than 100 miles up and down the Rio Negro Valley.
The geography is dramatically similar to central Washington, specifically the Yakima Valley, as it was 60 years ago. Rainfall is low, approximately eight inches annually. The sagebrush-covered terrain is undulating on each side, well back from the river plain. Much like central Washington, it is an inland desert. Elevation in the principal Rio Negro production area of Argentina is 400 to 800 feet.
The Rio Negro Valley is located at 38 to 39 degrees latitude, approximating Stockton, California. Therefore, despite the striking geographical similarity to central Washington, season, day lengths, and heat units are much different.
Argentina has other production areas. The Mendoza region, about 400 miles north of Rio Negro, has some pome fruits as well as huge acreages of grapes and most of the Argentine stone fruits. San Juan, a small district north of Mendoza, also grows fruit. Cordoba is another significant fruit production area.
In Chile, the land has a longer agricultural history. Natural rainfall made it possible to grow some crops prior to the coming of irrigation. Although Chile has open land, a much greater percentage of the area is cultivated. Apple production increase is coming from converting land from other crops (such as sugar beets, corn, alfalfa, tomatoes, potatoes, grains, tobacco, and beans) to deciduous fruit.
The above crops remain abundant and there are also sizeable acreages of kiwi, almonds, walnuts, cherries, peaches, plums, and grapes. Chile grows more grapes than apples (150,000 acres) and is the world's third largest exporter of grapes. The United States is Chile's best grape customer.
Chilean terrain is rolling and consists of numerous small valleys; part of a large trough between the Andes and a low lying Coast Range that reduces Pacific Ocean influence. No fruit is grown on the types of steep terrain we see in the U.S. Northwest production areas. Elevation in the areas we visited from Santiago to 200 miles south was reported to be 1,500 to 3,000 feet and rainfall varied from 15 inches to 30 inches. There is considerable natural vegetation.
Although the Chilean production area, like the country, is very long and narrow, the center of deciduous production, Curico, 100 miles south of Santiago, is at 35 degrees, similar to Bakersfield, California.
While Argentina has serious spring frost threats, there is no winter injury and the season is long and predictable. Chile rarely has frost at any time in most of its production areas. Excess heat can be detrimental to fruit quality in both countries. Argentina has some annual losses from hail. Chile has significant pathological problems, particularly scab. Dormancy for pome fruits is a problem, particularly in Chile.
Producers
Acreages seem to cross the spectrum, similar to Washington State. There are large plantings with multiple locations including some very large enterprises owned all or in part by foreign investors. Many are vertically integrated with packing and marketing facilities.
Small farms are considered 12 to 50 acres. Medium orchards are 50 to 125 acres. There are thousands of individual growers, some of whom have made a living on relatively small parcels. One Chilean packing operation indicated that it has 400 apple growers.
Recent low prices together with unwilling lending agencies and the reluctance of some growers to change varieties and systems has put a squeeze on many growers. A survey indicated that average tractor age is more than 14 years and only 8% of tractors are five years old or newer. Particularly in Argentina, there are abandoned orchards and orchards being maintained with minimum input. However, in general, apple expansion gallops ahead.
Although there is an experiment station in Argentina, Cooperative Extension is minimal with each agent dealing with about 1,000 growers. In Chile, there is less government support in the form of research or extension.
Those deficiencies, however, seem to be covered by large contingents of packing house-employed, technical-support personnel. We met a number of technical advisors, offering growing and handling advice. Without question, they are very well trained, intensive, and capable.
Varieties
In both countries there are similarities to production trends in Washington State. Red Delicious is about 70% of production. Granny Smith is about 20%. That leaves 10% for others. Contrary to most of the rest of the world, Goldens are not grown in quantity.
Expansion is now fueled by ÒnewÓ varieties, particularly Fuji and Gala. Like Washington State, those make up much of new plantings. Braeburn and Jonagold have also been planted but are questionable in the lesser latitude, warmer climates.
We spent some time at a Chilean planting of 285 acres converted four years ago from other crops. The Elstars were top worked first. Jonagolds are candidates for conversion because of sunburn. Braeburn, Gala, and Fuji are doing okay, but there are more problems with Braeburn.
There is, however, discussion in the industry of growing Braeburn and Jonagold farther south in Chile where it appears they would be well suited. There is also considerable interest in testing Pink Lady, which might be more suitable as it does not sunburn in hot climates and needs a long growing season.
Most of the producing Red Delicious are older strains such as Hardi-Spur, Richared, Starking, Hi Early, Oregon Spur, Royal, Top Red, Atwood, and Starkcrimson. Red Chief and Scarlet have been planted in recent years.
Red Delicious generally do well in warmish areas but the South American Reds appear to have some liabilities. They are, by North American standards, poorly colored although those lesser colored apples seem to be finding markets. Fruit seemed to be smaller and more round in shape. Sunburn is a major problem and packouts are generally about 50% or less; the balance utilized for juice.
Granny Smith apples are well suited for the climate. However, Granny production is not expanding significantly as it has been presumed the world market for Grannies is saturated. Galas appear to also fit well. Our impressions were that the Galas were smaller than in North America, but well colored. Imperial (Mondial) seems to be best colored. Royal Gala strain has been most planted.
Rosauers Nursery in Argentina, where we spent a very interesting half day, indicates that 50% of new trees are Red Delicious. The balance is split between Gala, Fuji, Goldens, and Granny Smith. Rosauers generally sell trees for about $2 each.
Rootstocks
Because of crown gall, variable soil types, flood irrigation, warmer soils, and reluctance to plant high density until more recently, Malling 111 and Malling 4 have been the most preferred rootstocks. Malling 7 has also been used, particularly for nonspur Reds, while the more vigorous Malling 4 is often used for spur type Reds.
Crown rot is severe in Argentina. Malling 106 is not usable. Malling 26 has a few followers and is now being planted where pressurized water is available and either drip or microjet application is possible. Malling 9 is also susceptible to crown rot, although there are some recent plantings, particularly with Fuji.
Fuji poses problems in high density if not on Malling 9 or Malling 26. We saw a higher density orchard of Fuji on Malling 111 and it suffered from excessive vigor.
Training systems
As in Washington State, older trees are taller, larger, and wider spaced. Newer plantings are principally higher density post and wire layouts. They are impressive. Spacing is metric, with 2 by 4 meters quite common. That translates to 6.5 feet by 13 feet. As in all growing districts, there are various spacings. One organization is quite convinced that the trees need to be 1.75 meters (6 feet) in the rows and rows 4 meters wide.
Difficulty with using more dwarfing understocks such as Malling 9 and Malling 26 delayed the move to higher density. When high density post and wire plantings are on rootstocks other than Malling 9 or Malling 26, management is obviously more difficult.
Various central leader type training systems are in use. The three-wire wide lower layer is common. Lowest wire or set of wires will be 1 meter (3 feet) off the ground with succeeding wires at 6 and 9 feet. (2 and 3 meters). This is referred to as a "five-wire" system. There is much more consciousness about keeping fruit from direct sunlight, and sunburn.
We saw, in Argentina, an instance where PP-333, the Triazine growth regulator tested widely in Europe and to some extent in the United States was used on a small portion of a Gala and Fuji block. Growth had been slowed too much and the fruit was sunburned. Fuji also had crinkled leaves.
A survey indicated that in 1993, 65% of orchards were planted with intent to use trellises in Chile. The average had been about 40% trellised to that time.
Chemical thinning is widely practiced with mixed results. All fruits are hand thinned at some time.
Irrigation
Flood, rill, and ditch irrigation are almost universal, plentiful, and cheap. Costs vary and range from free (when pumping from a local stream) to $10 per acre per month to $30 per acre per season. Water comes from rivers or impoundments fed by Andes snow melt and flows by gravity to the orchards. Sprinkler and drip is being used in some newer plantings. Where it is necessary to pump water and pressure is thus developed, there is more incentive and opportunity to use sprinklers, often microsprinklers.
The few orchards on the benches, in Argentina, away from river plains, generally pump water and use sprinklers. Those sites are sandier, with more soil variance and thus are more difficult to adequately irrigate.
Spring frost is a serious threat in Argentina and orchards are often flooded to aid in protection. Oil fired heaters are also used. However, a government survey indicated that only 28% of growers utilized any type of frost control approach while 100% have the risk of fruit loss each season. In that survey, it was noted that 15% are using heaters and 8% are using water. About 5% are using other control measures, which must refer to wind machines, although we saw very few.
Some overtree summer cooling is practiced and there is interest in much more.
Pest control
In Argentina, codling moth is a horrendous pest, with three to four generations annually. As many as 11 sprays are applied, including pyrethroids during the growing season. Large, powerful sprayers are a noticeable aspect of any growing operation.
Chile has less difficulty with codling moth, and is more likely to use three or four sprays. It must be kept in mind, however, that just as the country of Chile is long and narrow, so is the deciduous fruit production area. Since rainfall increases to the south, pest control changes. Chilean growers must have a scab control program in many areas and some report applying five to seven sprays for scab.
Argentina has few orchard disease problems, other than mildew. Both countries have most other pests such as leafrollers, thrips, leafminers, mites, etc. Mites can be a serious problem, particularly where the pyrethroids used for codling moth destroy predators.
Conversely, it is interesting to note that the aggressive codling moth spray program has, according to consultants, created chemical resistant predators that are quite effective on some pests.
Pest control is a very significant factor from a cost, machinery, and labor standpoint. Argentine growers report that they are spending about $400 per acre for pest control materials for apples and $250 per acre for pears. In Chile, costs are similar with more use of fungicides and less pesticides.
Argentine scientists are interested in whether there is a possibility to use bats to control bugs. Chemical weed control is standard practice, which also makes South American orchards look much like Washington orchards.
Establishment costs
In Argentina, bare desert land without water can be purchased for $120 to $160 per acre. Open land with water is about $1,500 per acre. Cost to fully establish a high density orchard to breakeven production level is about $ 5,000 per acre.
That contrasts with the $12,000 to $15,000 expected for high density establishment in the U.S. Northwest. Additional cost of U.S. trees and labor represent most of the difference.
Labor
Workers in Argentina are almost all from Chile. Wages are from $12 to $20 per day depending on type of job. Workers are paid by the day or week or month rather than specific hourly basis. However, it is presumed they are working by the day. The work day varies but is often 5 days of 9 to 9.5 hours and half a day on Saturday.
Chile uses the same process, except workers are paid less with $7 to $12 daily a more likely wage. However, goods can be purchased much cheaper in Chile.
Very little work is paid by piece rate. A small amount of harvesting is by the bin, but most is by the hour. Payment by the bin is more likely in Argentina than Chile. Argentine owners and managers define cost of labor as one of their major problem areas. Our observation was that workers are somewhat uninspired and some operators have more than necessary.
Some workers are provided housing and utilities. In Argentina, where isolated areas are being taken out of sagebrush and planted to orchard or vineyards, on-site housing is prevalent. In Chile, with many privately owned houses scattered about the rural areas, housing is less likely to be provided by the employer.
Benefits seem to vary by country and area, depending on worker, location, job, amount of government incentive to produce jobs in rural areas, etc. It appeared most likely that benefits are 20% or more of wage in Argentina. In Chile, the 20% figure is more likely.
In both countries agriculture is the principal activity in the farming areas, thus the economy, society, and resident mentality is geared to things revolving around agriculture. There are a few industrial jobs that might offer different wage scales. Many of the service industries such as retail trade pay similar wages.
Apple harvesting, packing, marketing, and utilization
It appears that all fruits except cherries are hand thinned, some more than once. The result is a consistent, high quality product subject only to anomalies of the climate or season such as russet, sunburn, or insect damage. Fruit we saw was arriving at the packing house as a very high quality product and needed minimal sorting for quality.
Apples, like pears, are generally picked two or more times. Size and color are criteria. Long growing season climates with predictable weather place little pressure on picking too soon or getting the harvest completed before winter comes.
Marginal chilling some seasons and a spread-out bloom often result in fruit of different age on the same tree.
The harvest process duplicates that seen in the United States. Fruit is picked in bins. Sometimes the bins are left on trailers that are moved through the orchards. A difference, however is that the crews, paid by the hour, are more likely to move through a narrow band of the orchard with several people picking on a given row and dumping into the same bin.
It must be emphasized that packouts are dismal. More than 50% of Red Delicious are processed for juice in both countries. Processing prices were about $40 per ton. Although some of the unpackable fruit is sent from orchards direct to processors, much comes off the packing lines.
In Argentina, the processors are located at Mendoza, about 425 miles north of Rio Negro over rough roads.
We must also note that color demands for Red Delicious are much less than from the U.S. Northwest. We saw good CA Reds being packed that were, on average, less than 50% red, resembling Starkings of 30 years ago. In the retail and wholesale markets, highest quality Red Delicious were 50% or less red, often striped. Obviously, the South American trade is attuned to an apple with those color characteristics.
Fruit is trucked to cold storages. Storages are very modern and efficient. Many have state-of-the-art controlled atmosphere systems.
Likewise, packing equipment is highly sophisticated. The entire packing process resembles the most advanced U.S. systems, with presizing and other techniques to ensure control of the product.
Because the entire industry in both countries is growing fruit for export, quality control is intensive. Each packing house we visited had people taking various measurements of the fruit as it arrived and as it was being packed.
Some of the larger companies have packing locations throughout the country. In Chile, some have as many as eight or nine packing sites. They will also handle other crops such as Kiwi, which has expanded from 500 acres in 1980 to more than 25,000 in 1993. Some large organizations handle citrus at sites farther north in Chile.
Although most packing house labor is paid by the hour, a number of packers are paid on a per box rate. One handler indicated that the average production is 50 packed boxes of fruit per person per day for all persons working in the operation.
Packaging is one area where things are different than in the Pacific Northwest Fruit is packaged to meet the demands of each given market. Fruit may be packed from the same belts into as many as five different sized containers ranging from 10 to 20 kilos. When different sizes and grades are included, there are many different boxes moving about. Those boxes are often made of wood. It was fascinating to see packing house supply lines similar to the United States 30 years ago. And to see gangs of people building wooden boxes.
Argentina intends to export 75% or more of its packable production with 2/3 of that destined for long distances. Chile exports a similar percentage of most products. Since Chile has much more political and geographic difficulty putting product into the large Brazilian market, it is more dependent on exporting off the continent.
Brazil has 165 million people who eat fruit and represents a very attractive market. Argentina has had various "sweetheart" arrangements to ensure that its fruit has a priority in Brazil.
Packing house treatments for disease and maladies are similar to those employed in the Pacific Northwest. However, treatments vary, depending on what the country of destination of product will allow.
Among postharvest problems, blue mold appears to be more prevalent than in our packing operations in the Pacific Northwest. But they also have mucor rot, grey mold, and the general array of physiological maladies such as scald, bitter pit, and internal breakdown.
Handling operations have forced air cooling in some instances and all the technology to do an excellent job. Refrigerated trucks are used to transport product to the ports.
Although most fruit is handled by large packing operations, in Chile, there are some on-farm smaller operations that pack and have the larger organizations store and sell the packed fruit. Shipping cost from Valparaiso, Chile, to Los Angeles, is $4 to $6 per box.
In both Argentina and Chile, there is concern about capacity of the docks to handle exports. Fruits are a major export item from both countries. From Chile, it is fourth in importance economically behind copper, fish, and forestry products. In Argentina, it is approximately an eight hour drive from the principal packing houses to the port. In Chile, the time element is less, two to six hours.
In both countries, there are horror stories about packed fruit left waiting at the docks in summer heat for too long before it is loaded into refrigerated ships. However, the loading operation we saw at Valparaiso, Chile, moved all the fruit from a refrigerated truck over the side of the ship in about half an hour. That fruit, incidentally, was Bartlett pears, strapped, palletized, and headed for Philadelphia.
There is discussion of improvement of port facilities to handle more product. Highways to the ports also need to be improved.
There is grower unrest in both countries because of recent low prices, both for apples and pears. Apples have fared better, however. Some Chilean packers are offering guaranteed base prices to growers and will absorb losses below those guaranteed prices.
One report indicated that Argentine growers received, from the 1994 crop, about $3 per box for Red Delicious and about $2 per box for Granny Smith.
Quality control and regulations
Producers, packers, and marketers are subject to few regulations in Argentina and Chile. There is no evidence of a lack of concern for workers, nor that good safety practices are not being followed. However, the agriculture industry is not pressured by rules and regulations and those enforcing them.
Regulations have varied with the governments. In each country, governments in the past have had some socialistic bent. During those regimes, there were more controls of everyone and every type of business.
Now, the government in each country is oriented to private enterprise. Labor unions have been stifled. Any type of government control is frowned upon.
We were queried as to how we regulate quality. When we defined our marketing orders and size and grade standards, Chileans were negative. They look at that process as a form of government control and want no part of it even if the fruit industry was controlling the process.
Despite lack of regulations, It appears packing is to grade standards expected in other countries and sophisticated presizing and electronic sorting systems are helpful. Where we saw fruit being packed, it appeared to be graded severely.
Since there are no organizations or regulations, growers are not assessed for supporting industry entities. One negative is that it is difficult to compile accurate data regarding production trends as well as amounts packed and shipped.
In Chile, a consortium of the five largest shippers has formed a quality control organization into which they pay one cent per box. The objective is to ensure a consistent product in the export market.
Of 128 million exported boxes of fruit from Chile, about 40% are represented by the five shippersÑDole (16 million boxes), Del Curto (14 million), Unifrutti (13 million), United Trading Co. (12 million), and Copefruit, (7 million).
Chile has more than 200 packers and exporters. One set of statistics indicated that in 1992, the United States imported 36,635 tons of apples from Chile and 6,600 tons of apples from Argentina.
The United States has not historically exported to either country. Argentine officially opened its markets to U.S. fruit in December of 1994.
Apples in Brazil
The Brazilian industry moved from no production 20 years ago to 448,000 tons in 1994.
Expertise and some investment has come from Argentina. An Argentine organization with orchards in Brazil reported that they started picking Galas January 13 and the fruit was 50% red. Their site is at 1,800 feet. Plantings in the area are 50% Fuji.
The same organization reported that willing workers are paid $100 per month in Brazil and other costs are less than in Argentina.
Statistics indicate Brazil imported only 55,000 tons of apples in 1993, down considerably from 143,000 tons in 1989. Production increase in Brazil is projected at 50% between 1994 and 2000.
The South American countries of Chile, Argentina, and Brazil are making great strides in their tree fruit production, producing a quality product for export. Not hindered with government regulation or high labor and water delivery costs, the countries are poised for effective competition with U.S. growers.
GOOD FRUIT GROWER
105 South 18th Street, Suite 217
Yakima, Washington 98901-2149
509.575.2315 - 800.487.9946 - Fax 509.453.4880