Industry Challenges and Opportunities
Historically, growing fruit in Pennsylvania and the surrounding Mid-Atlantic region was a profitable, rewarding agricultural pursuit. However, in the late 90s increased competition (domestic and global), higher costs, poor returns, and competing land uses put significant strains on this once strong industry.
Outside forces exposed the lack of competitiveness of many conventional orchard plantings. Considerable industry consolidation occurred in some areas and many remaining farms struggled to survive. A great deal of uncertainty developed regarding the long-term viability of producing apples in the Mid-Atlantic fruit belt. In the face of the bevy of challenges there were also many new opportunities and reasons to be optimistic about the future.
It has become apparent in the last fifteen years that the Mid-Atlantic fruit industry is transitioning toward a greater proportion of fresh fruit production. Low prices in the processing market prompted growers to reassess their production mix and look more favorably at the potential "upside" in fresh market apples. Growing calls by consumers for "locally grown" food have brought increased demand for Mid-Atlantic fruit that in turn has positively influenced prices and movement. Rising transportation costs have also helped to eliminate the cost advantage that fruit from other regions of the country once enjoyed over locally produced fresh fruit.
Unfortunately, growers cannot simply reorient an orchard from processing to fresh market by changing to whom they sell their fruit. Changing from processing to fresh market production usually involves removing old orchards of one variety and replanting with new trees of a different variety that are appropriate to current fresh market trends. At the same time, it makes sense to replant new fresh market fruit blocks using improved production systems that are more likely to produce high quality fruit, come into production earlier, take advantage of our increased knowledge of plant physiology, and that are adaptable to new developing technologies.
Replanting an orchard is not a task that can be taken lightly. Many critical decisions--variety, rootstock, spacing, support system--must be made at the outset that will dramatically impact the long-term performance (both physical and economical) of the orchard. From an economic standpoint, it is important to select systems that come into production as quickly as possible, as this will minimize a grower's period of negative cash flow and make the orchard "pay off" as quickly as possible. Such a system takes advantage of high density production principles and size controlling rootstocks to pack more, but smaller, trees onto an acre of ground. These smaller trees come into production earlier, are easier to manage, and are much more efficient than traditional large trees.
A further benefit of high density production is the opportunity it presents for labor savings. Most horticultural crops are labor intensive, and tree fruit are no exception. It is generally accepted that 60% to 75% of the cost of producing an apple crop relates to labor. There is also a great deal of uncertainty surrounding labor availability to accomplish orchard work (i.e., the lack of a legal, willing farm workforce). These two factors make the efficient utilization of labor a top concern for the tree fruit industry. Transitioning to uniform, high density orchards will put growers in the best possible position to take advantage of new labor reducing technologies as they are developed.
Prepared by Matt Harsh - Harsh Consulting, former Penn State Extension Ag Economist