Aug 6, 2012

So what do fruit growers do in a slow year?

East of the Mississippi, tree fruit farmers agree: This year’s a tough one.

Whether or not you believe in global warming or climate change or Russian roulette, the fact is a super-warm March plus a normal spring frost caught fruit trees with their blossoms out. The full fall-out, pun intended, won’t be known until June drop, but early indications on most tree fruits in Michigan, Ohio, New York and other northern regions weren’t great.

As farmers know, next year will probably be better. But in the meantime, what are you going to do to improve your business?

How about a little dreaming and planning with the marketplace in mind?

Start with the crop

To begin at the beginning, are you growing the right stuff? Maybe it was the right stuff 10 or 20 years ago. Even though you think a certain cultivar still works well – maybe it fills a gap in harvest – is it still popular with shoppers?

Are you trying to eke out some profitability from a fruit or a variety that’s marginal?

Unpopular fruit is a drag on prices, is hard to sell in the marketplace (fresh or processed) and does not put your, or the industry’s, best foot forward to the consumer – even if you think it’s safe or easy. Most growers are constantly updating varieties and rootstocks for farming purposes. But do you apply that same thinking to the grocery shopper?

If you’re running a farm market, you get instant feedback. But if your product ends up in grocery stores, maybe you should spend some time in produce departments during the upcoming slow summer – preferably in cities a few hours away from your home – and see for yourself how city folk are selecting produce.

Ask the hard questions about what your shoppers want and whether you are, indeed providing it. Lay your plans accordingly. You don’t have to make next-year-plans – cash flow might be tight with a small crop. But spend 2012 laying down some track for where you’ll take your business the next five years.

Controlling nature?

You can’t exactly control nature, but hopefully if you’re a fruit grower you fought the good fight by putting in wind machines, using helicopters, burning hay bales and so forth. You’re probably now researching every other frost-control prospect known to mankind.

Some Michigan blueberry growers believe overhead irrigation saved the day. Would overhead irrigation and micro-sprinklers prevent frost-ravaged tree fruit? It seems to be recommended in Europe, where they’re also experimenting with heated irrigation, growth regulators and bacteria for frost control. Thinking crazy, could high-tunnel systems or retractable plastic “ceilings” trap some heat around tree fruit, as well as protect against hail?

Clearly, today’s dwarf trees are more susceptible to frost. On some of your land, would the old-style large trees make better sense? You’d probably have to run the numbers to know for sure. These ventures might be worth an experiment, or at least mulling over this summer. Having some more-costly fruit right now would feel better than having next to none, unless your crop insurance policy is very good.

A vote in favor of overhead irrigation and microsprinklers: The $2.5 million Specialty Crop Research Initiative project being headed by Matt Grieshop and a host of collaborators at Michigan State University, Washington State University and Cornell University.

This project is looking at PVC pipe and microsprinklers to deliver frost protection, fertilizer, insecticides, fungicides and other crop inputs.

The Eastern fruit industry has too much invested in permanent trees, stakes, equipment and real estate to not have a full harvest four out of five years — not to mention the cost of having to build, let go and rebuild retail sales accounts in roller-coaster production cycles.

It sounds crazy to think you can outsmart nature, but with time to dream, fruit growers’ ingenuity is boundless.

Counting the beans?

Take time to analyze the gross revenue and profitability of your various orchards, and blocks within each orchard. Sometimes it’s frightening how non-analytical some growers can be. Sure, everyone knows their bottom line revenue and expenses. But do you have tools to analyze every variety, its input and labor costs, harvest volumes and pack-out rates?

I’ve heard it said that in California they treat farmland more like business real estate, and maybe that’s because they’re more profit-stressed due to California-style taxes and regulations. But if a crop doesn’t return dollars, they bulldoze it out and plant something else – maybe even a different kind of fruit or nut.

Are you romantically attached to your crop, standing by it even when it isn’t returning the revenue it ought to be?

Where are you selling?

Another area to ponder is whether your marketer is doing a good job – even if that’s you. Is he or she telling the locally grown story? Are they telling a sustainability story?

These are the two hottest trends out there, and they should be commanding a slight premium and major retailer loyalty.

If your marketer can’t readily explain how your farm is capitalizing on those trends, maybe you’re working with your grandpa’s marketer — and leaving money on the table.

Your marketer should also be telling a strong food safety story, but this doesn’t command a premium. It’s simply a given in the market at this point. We all need to give up whining about how the United States has cleaner, safer food than many of our Third World destinations. If you haven’t looked up lately, you’ll find some of these countries are now eating our lunch in food safety and market innovation. They know they have to implement state-of-the-art food safety if they’re going to win over well-heeled U.S. shoppers — except China, but they may never get it.

So maybe this is your summer to get paperwork in order to become GAP certified on the farm or packing house. Look at other third-party certifications that your shipper, packer and any hoped-for retail customers are using. Be prepared – a monster crop is coming in 2013.

Should you sell direct?

Stick with the brand, whether it’s Pure Michigan, Michigan Apples or any other industry promotion. Leverage other marketing efforts whenever possible; there’s power in group marketing and brand building.

My travels to independent and upscale grocery stores, convenience stores, gas stations and drug stores tell me there are a lot of niche opportunities out there for Midwestern fruit and vegetable growers.

Capturing these opportunities requires leveraging your farmer-identity. Use some of your summer downtime to visit newer, upscale groceries where the customers can afford to buy local (read: pay more for fruit) and you’ll find plenty of special niches for fresh produce and high-end processed Midwest fruit and vegetables.

Warning: You will have to think differently. You may have to invest in customized packages, pack in smaller boxes, provide signage and figure out delivery. But many of these niches pay very well and have virtually no competition in the “local” category.

A small investment of time, attention and resources may pay big dividends in 2013 when, God willing, the Eastern fruit crops will probably be monsters again.

Tell your story

I know you think you’re too busy to learn Facebook and Twitter and Pinterest and Linked-In. And you don’t want to spend all your time on the computer – that’s why you took up farming.

But your target shoppers – women aged 25-50 – are all over these social networks, and you need to know what they’re doing and thinking. Spend some time understanding how a few of these social media programs work (watch a YouTube video about it), and then dive into at least these three.

1. Write up the story of your farm, and take some photos. You don’t have to hire professional writers, photographers and videographers these days – the social media networks, including YouTube, are raw on purpose.

2. Build up a following now, so that when you need to spread the word about a new market venture, the opening of your direct market or a food safety issue that begs for your voice of sanity, you’re ready.

3. The time to learn social media and build a “community” is before you need them. Cruising the Internet highway isn’t a bad way for growers to travel this summer.

By Denise Donahue, Donahue Associates