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© 2017 by RJO Produce Marketing

New normal forecast for California stone fruit crop

April 23, 2015

After several years of bad markets, California stone fruit growers began pulling out trees in the mid-2000s, which has created a new normal of lighter supplies and better markets.

 

A very significant amount of trees were pulled with the acreage shifted to other crops. Bill Purewal, owner of PureFresh Sales in Selma, CA, said most estimates conclude that about 30 percent of the acreage was pulled. The result is a very manageable supply of fruit and a strong market. He noted that there should be promotable fruit in early May but no oversupply throughout the entire season — and it may even be light on the back end.

 

Maurice Cameron, global sales of The Flavor Tree Fruit Co. in Hanford, CA, agreed that it should be “a nice crop of all three fruits” — peaches, plums and nectarines — with some varieties at the tail end of the season being in short supply. “I think we will have a nice market that will look a lot like last year.”

 

Clint Lucas, account manager for RJO Produce Marketing in Fresno, CA, agreed with the other two assessments and called this the “new normal.” Different than it was in the last decade when oversupply was the situation every years, Lucas said the new normal is punctuated with good markets and not too much fruit. On April 22, he talked to The Produce News after spending the previous day touring various packing operations in the San Joaquin Valley. “The theme we keep hearing is that it should be about the same as last year especially in May and June. But it is a short crop, especially with the varieties on the back end.”

 

Lucas said plums appear to be off more than nectarines or peaches. Growers are reporting minimal chill hours, a warm and mild winter and very little rain as the culprits that have created a less-than-bumper crop.

 

Nonetheless, by mid-May there should be promotable volume when the Spring Flame peach and the Zee Fire nectarine varieties hit the market. Lucas said these are the first two varieties that will have sufficient volume for promotion. “The question is will the price be low enough for those promotions," he said. "I don’t know.”

 

Like many seasonal crops, stone fruit prices start out high as shipping gets under way, but that price will drop as volume picks up. The question is if it will drop fast enough to induce promotions. Lucas predicted there would be sufficient volume for retail promotions throughout May and June, but he said July may offer more of a challenge in terms of volume. He said this mirrors what happened in 2014 when it was a tough, tight market toward the second half of the season.

 

But with that said, Lucas added that shippers tend to work with retailers on program pricing and he expects the two marketing partners will come up with creative ways to promote the fruit. He noted that there will be pockets of outstanding production on some varieties as the season moves on. “It will just depend on what varieties the growers have,” he said.

 

While lack of supplies and good markets tend to lead to increased plantings and potential oversupply in a relatively short time frame, Lucas does not expect that to happen in the tree fruit industry. He said it takes a long time to turn the volume around and he does not see many new plantings in the ground. Most people believe, the new normal is going to last the next five to 10 years, he said.

 

Purwal of PureFresh agreed stating that California growers in the San Joaquin Valley have many good crops to choose from these days, as there are many different tree and nut crops performing well. This tends to guard against the overproduction in any one of them.

 

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