September 8, 2017
CapitalPress.com
5
Cherries: Too much of a good thing?
Analysis
By DAN WHEAT
Capital Press
Sean Ellis/Capital Press
Irrigated and non-irrigated farmland continues to gain in value
throughout the Pacific Northwest.
Farmland values
continue to increase
By SEAN ELLIS
Capital Press
BOISE — Agricultural
land values around the North-
west continue to increase, de-
spite relatively low commodi-
ty prices.
“We would suspect that
with commodity prices being
low for the past two years, we
would have seen some drop in
(agricultural) land values, but
that is not the case,” said John
Chidester, an ag land assessor
in East Idaho. “I’ve seen no in-
dication that values are going
down.”
USDA’s National Agricul-
tural Statistics Service esti-
mates the average value for
all cropland in Idaho at $3,400
an acre in 2017, a 3 percent
increase over $3,300 an acre
in 2016. NASS estimates the
value of irrigated cropland
in Idaho at $5,150 an acre
and non-irrigated cropland at
$1,460 an acre. Both are up
3 percent from the previous
year.
Around the nation, aver-
age cropland value is esti-
mated at $4,090 an acre, un-
changed from 2016 and below
the $4,130 total in 2015 and
$4,100 total in 2014.
Bob Morrison, an indepen-
dent ag land appraiser in Idaho
Falls, said NASS Idaho esti-
mates for 2017 appear solid.
“Ag land values have been
steady to slightly increasing,”
he said. “It’s surprising when
you consider that commodity
prices are down, but the values
are still holding strong.”
Doug Robison, Northwest
Farm Credit Services senior
vice president for agriculture
in Idaho, said ag land value
trends have shown some gains
on an annual basis with overall
transaction counts declining.
“The combination of lim-
ited supply, investor appetite
and low interest rates have
provided strong support for
land values,” he told Capi-
tal Press in an email. “Land
values have been surprising-
ly resilient over the past few
years. High-quality farmland
remains in tight supply.”
NASS also projects that
cropland values in Washington
and Oregon are on the rise in
2017.
The agency estimates av-
erage cropland value in Ore-
gon at $2,860 an acre, up 4.8
percent from last year, with
irrigated cropland averaging
$4,850 an acre and non-irri-
gated cropland at $2,120 an
acre.
In Washington, average
cropland value is estimated
at $2,890 an acre, up 4.7 per-
cent, with irrigated cropland at
$8,700 an acre and non-irrigat-
ed cropland at $1,380 an acre.
According to a Farm Cred-
it Services report on 2017 ag
land values, limited supply is
anchoring land values “despite
concerns surrounding weaker
commodity prices. ... Both irri-
gated and dry cropland values
continue to remain strong de-
spite lower commodity prices
for many crops.”
A large volume of the farm-
land sold in Idaho this year
is purchased by investment
groups that are keeping the
land in farming, said Morri-
son.
The Pacific Northwest
sweet cherry industry finally
had the year of its dreams in
good weather, but maybe the
year of its nightmares in pricing
and returns.
Stellar weather this year
led to record cherry volume.
The crop of around 27 mil-
lion, 20-pound boxes was well
above the old record of 23.2
million boxes in 2014.
But the record crop caused
wholesale prices to tumble be-
low $16 per box, making it un-
profitable. Early grower returns
were good, but post-Fourth of
July returns, not fully known
until mid-October, are not ex-
pected to be good. Some picked
fruit was dumped.
So the big question growers,
packers, shippers and market-
ers will grapple with over the
next several months is whether
the industry can expand market
consumption enough to han-
dle 27 million-box and larger
crops.
Or are the crops too much of
a good thing?
The answer seems obvious.
Supply exceeds demand. Cut
supply. But it might be more
complicated than that.
There are lots of variables
that shape any given season.
Weather is one of them. Rain,
hail, excessive heat or poor pol-
lination usually hold down crop
size, but that didn’t happen this
year.
“The reality is every cher-
ry season is different, and this
one played out in a manner
that is unacceptable to me,
my growers and shippers,”
said B.J. Thurlby, president of
Northwest Cherry Growers in
Yakima, Wash., the industry’s
promotional arm.
Next year, the market might
respond differently and there
may be more demand than sup-
ply, he said. The key is repeat
consumer purchases, and this
year “our retail partners saw
our core consumers did not
make as many repeat purchases
as we needed,” Thurlby said.
“We had two-and-a-half
months of sustaining huge vol-
ume, competing with lots of
Dan Wheat/Capital Press
A huge 2017 cherry crop caused prices to tumble and created concerns for the future.
other summer
fruit. Califor-
nia had a lot of
cherries before
us at good pric-
ing and good
volume. Why
B.J.
it tanked for us
Thurlby
was just supply
and demand,”
said Denny Hayden, a Pasco,
Wash., grower.
It was a tale of two seasons
for the Northwest. Pre-Fourth
of July brought “good to mod-
erate” prices, and post-Fourth
of July brought too many cher-
ries and prices at $16 a box and
lower, Hayden said.
“The problem was not
having enough sales for it.
We couldn’t move out packed
fruit,” he said.
PNW cherries were the
No. 1 advertised item in retail
produce departments for four
weeks. They were in the top
three for seven weeks against
more than 800 other items on
average, Thurlby said.
“You hope we picked up
some new consumers, which is
part of the necessary growing
pains we go through in produc-
ing larger crops,” he said.
Consumer-friendly retail
pricing and good displays were
the norm in most stores as ma-
jor chains focused on cherries
for over two months, he said.
More than 500,000 boxes
per day were shipped for 42
straight days — an “unbeliev-
able” amount, he said.
Northwest Cherry Grow-
ers began new programs in
the Philippines, Myanmar and
Cambodia and the industry
exported more than 8 million
boxes. More than 3 million of
that went to Chi-
na. The previous
export record
was 7.5 million
in 2014. Last
year, 1.8 million
boxes went to
Brenda
China.
Thomas
“To me the
bottom line is
there are just too many cherries
planted. There’s not enough in-
frastructure to get them packed.
Until the huge supply drains
away, it isn’t a good market.
It’s a good market early and in
the end but not in the middle
until we reduce the amount of
fruit being picked,” said Norm
Gutzwiler, a Wenatchee, Wash.,
grower.
Brenda Thomas, president
of Orchard View Farms in The
Dalles, Oregon’s largest cherry
grower, said people talk about
growing markets but she’s not
sure where that is because “cer-
tain retailers reached a lot peo-
ple with low pricing and it still
didn’t create enough demand.”
“We packed all our fruit and
sold all our fruit for very poor
pricing. There was little or no
demand for cherries in general.
It was that way all season long
except right at the beginning,”
Thomas said.
Small growers will get
squeezed out first if supply is
reduced, she said, adding she
does the best she can for her
growers.
Orchard View packs for a
couple dozen growers. Beyond
that, it grows 80 percent of
what it packs.
Charles Lyall, a Mattawa,
Wash., grower, said it’s tough
to make a profit this year on
$20 per box at a 30 percent cul-
lage rate.
Small grow-
ers, particularly
5- and 10-acre
growers,
are
likely to get
out of business
Norm
first
because
Gutzwiler
they can’t han-
dle food safety
compliance and other regu-
lations as efficiently as large
companies, Lyall said.
“I would like to increase
markets but if you can’t in-
crease markets fast enough to
take care of the volume and
can’t sell at a profit, then you
have to start looking at reduc-
ing production,” he said.
A short-term solution, he
said, is heavier pruning to re-
duce crop load and produce
larger cherries. The next option
is removing less productive
trees and varieties, which he
will start doing this winter or
next, he said.
Big companies have in-
creased a lot of cherry acreage
in the Mattawa area in the past
30 years and a lot of that, with
some ups and downs, has been
fueled by good prices, Lyall
said.
“We’ve been riding that
train. We might be back to a
point where we’ve overpro-
duced and it’s going to have to
go back to lowering volume,”
he said. “You tear out Bing at
6 tons per acre and plant Skee-
na that averages 10. The day of
growing small fruit that doesn’t
get packed is trouble.”
New varieties that produce
large cherries would be good,
he said, “but I’m afraid there’s
more of these years ahead than
in the past.”
Innate spuds gaining
foreign-market approval
By JOHN O’CONNELL
Capital Press
KETCHUM, Idaho — Sim-
plot Plant Sciences has ob-
tained approval for its Innate
brand of genetically modified
potatoes in a few key foreign
markets, including Japan, and
has several other applications
for foreign-market access pend-
ing.
Company spokesman Doug
Cole said Simplot has no in-
tention of exporting Innate into
any foreign markets in the near
term — though it may raise
some Innate potatoes in Canada
for distribution there.
For now, the approvals are
intended only to minimize
problems in case Innate mate-
rials are ever found commin-
gled with conventional spuds
shipped to sensitive export
markets, Cole said.
“These countries would
know how to test for (Innate)
as part of the application pro-
cess, and they would have our
technical specifications,” Cole
said, adding that having Innate
already approved in a foreign
market could prevent delays
of U.S. exports following con-
firmation of accidental Innate
commingling.
Cole said Simplot obtained
approval to sell its first-gener-
ation Russet Burbank in Japan
during August. First-genera-
tion Innate Burbanks, Atlan-
tics and Ranger Russets — all
bred to resist bruising, to avoid
turning brown after cutting
and to possess low levels
of acrylamide, which is a
potentially harmful chemi-
cal created during frying of
some starchy foods — were
approved last spring in Aus-
tralia and New Zealand.
Idaho farm seeks
$280,000 for seed peas
By MATEUSZ PERKOWSKI
Capital Press
An Idaho farm is seeking
more than $280,000 in a law-
suit alleging Syngenta Seeds
violated a contract by failing
to pay for pea seeds.
Vincent Farms of Twin
Falls County claims that it
was contracted to grow seed
peas for Syngenta last year but
wasn’t paid for the crop upon
delivery to the defendant’s
processing facility in Walla
Walla, Wash.
Prior to delivering the crop,
Vincent Farms had it tested by
the Idaho Department of Agri-
culture, which confirmed the
seed had a germination rate of
87 percent, according to the
lawsuit.
That sample was “profes-
sionally prepared for testing”
by removing “dirt, rocks, plant
stems, pea pods, and undesired
or unusable seed peas,” the
complaint said.
Syngenta argued the seed’s
germination rate fell below 85
percent — the threshold re-
quired by the contract — but
the company did not “remove
the excess waste” before con-
ducting the test, according to
Vincent Farms.
The lawsuit seeks $283,000
in compensation for the value
of the seed peas, as well as
prejudgment interest of 12 per-
cent a year and attorney fees of
at least $2,000.
An attorney for Syngen-
ta Seeds did not respond to a
request for comment, but the
company has filed an answer
to Vincent Farms’ complaint
stating it wasn’t obligated to
pay for the pea seeds.
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