Plan ahead, but stay nimble, Michael Swanson, an agricultural economist with Wells Fargo, told several hundred growers Monday at the Washington State Tree Fruit Association’s annual meeting in Kennewick.
He compared that dichotomy to adopting two famous sports philosophies — hockey great Wayne Gretzky’s “skate to where the puck is going to be,” and boxer Mike Tyson’s “everyone has a plan ’till they get punched in the mouth.”
Swanson, the keynote speaker at the conference, advised growers that the economy always grows and to position themselves to weather cycles and trends.
“You need to be prepared for Dr. Tyson punching you in the face,” Swanson said.
Swanson told growers that profits before taxes on apple orchards have been rising for the past 15 or so years, according to the Risk Management Association statistics.
It spiked in 2012 at about 14 percent but stood most recently at 10.5 percent in the year ending March 31, 2017. He expects that trend to flatten. Industries typically don’t reach 20 percent and all industries cycle.
However, growers can work to make sure they are high in profitability compared to other growers, he said. Apple orchards typically have a big gap between high profit achievers and under achievers.
He also said that the global market holds the highest promise for growth, he said.
Statistics show that the price premium for organic produce, while still high, is shrinking and he expects that to continue, he said.
Other morning speakers included state and national governmental updates from Jon DeVaney, president of the Washington State Tree Fruit Association, and Diane Kurrle, senior vice-president of the US Apple Association; a presentation by a panel of growers and a capital firm and a retail trends speech by Keith Neal, assistant general merchandise manager for Costco.
Neal discussed Costco’s enormous growth organic fresh produce sales; a total of 20 percent of all fresh produce sales were organic this year, which is 35 percent over last year.
Neal told growers the company is considering selling only organic apples for certain varieties, but he declined to say which ones in a follow up interview with the Good Fruit Grower because plans are not final, he said.
– by Ross Courtney