Managed varieties are a vital strategy for growers and marketers to protect the health and sustainability of their companies and of the industry itself, says Terry Bacon, director of variety development for Sun World International, LLC, of Bakersfield, California.
California lags behind the rest of the world in terms of adopting managed varieties, mainly because of the abundance of unmanaged varieties and breeders who operate off per-tree royalties, Bacon said during the International Fruit Tree Association’s annual conference in Germany. However, because of changes in the industry, growers are starting to take interest in managed varieties.
The problem with unmanaged varieties is that there is inevitably chronic overproduction, leading to a quick decline in the premium and often reduced quality as growers struggle to get on the market before their neighbor. Typically, price and volume trends have an inverse relationship.
With California nectarines, the grower usually receives a higher per-carton price for large fruit, so the main point of differentiation is size. However, as soon as a new variety that produces larger fruit becomes available, the whole industry has to plant the new variety because the variety they are currently growing for that marketing window quickly becomes worth less. Soon, under this scenario, prices for all sizes fall below the cost of production because of oversupply. And, Bacon said, switching to a more productive variety only serves to produce more worthless fruit.
Bacon calls this desperate cycle of continually shifting to newer varieties, and the resulting devastation that it has on growers, the Zee Fire Effect after the early nectarine Zee Fire.
Zee Fire was an unmanaged variety introduced in 2003. Trees were widely available from nurseries for a per-tree royalty and there was no marketing plan. Within five years, nearly a quarter of a million trees had been planted.
For part of last season, prices dropped below $12 per carton. Bacon projects that by 2010, there will be around 1.5 million cartons of Zee Fire on the market and the price of size 60 fruit could be below the break-even threshold for its entire marketing window. That means that the variety will have gone from a premium to a commodity within eight years of being first planted. "And that’s not nearly enough time for a grower to recoup establishment costs," he said.
Zee Fire was a premium variety. Had it been managed, there would have been measures in place to help maintain its value, such as:
• A cap on acreage, with acreage allotted to growers
• Field trials and postharvest trials to determine the best production practices
• Technical support for growers
• A marketing plan and branding program. Marketers would have backed the variety, knowing their investment was being protected
• Communication with buyers to get them excited and to establish a premium
• Export plans
• Global planting plans
"And what you have instead of a scenario of eight years from premium to commodity, you have a scenario of a premium variety with enhanced and protected value and longevity, and growers who know their investment is being managed."
Sun World is a vertically integrated business involved in research, farming, packing, and marketing fresh fruits and vegetables. It also licenses others to produce its proprietary table grape and stone fruit cultivars around the world.