California's dried plum industry, from Red Bluff to Porterville, has launched a $17 million tree removal program aimed at leveling out its peaks and valleys of production.
Richard Peterson, executive director of the California Dried Plum Board in Sacramento, said USDA made grant funds available to the state's 1,250 dried plum growers, stung by falling returns in recent years.
The grant, Peterson explained at the recent Dried Prune Day in Tulare, comes not from taxpayer funds but from Section 32 surplus removal funds, generated from import duties on foods and other products coming into the U.S.
That is the same source of funds for purchase of surplus fruit and nut products by USDA's school lunch and domestic feeding programs. Peterson credited Richard Van Diest of USDA in Fresno as being instrumental in securing the funds after the board's request last May.
“Hopefully, this will give the industry seven to eight years of breathing room, since it takes six years for a new orchard to come into commercial bearing,” Peterson said.
Although 480 applications had been received by the Jan. 31 deadline, Peterson said that was only “on paper” and not reflective of how many acres would actually be removed.
By the time of the Tulare meeting at the end of February, more than 200 applications, representing more than $5 million in grant funds and more than 6,000 acres, had been approved by USDA. The total acreage to be removed has not been determined.
The industry's problems with inventory are evident in the production in 2000 of nearly 215,000 tons, at 2.5 dried tons per acre, or about 25 percent more than the 1999 crop. It was also about 22 percent more than the average of the prior 5 years.
The 2000 crop left a 2001 carry-in of nearly 101,000 tons, the third highest in recent history. Even when combined with the short 2001 crop of 140,000 tons, the inventory was about 40,000 tons more than the desired level.
Ideally, carry-over would be about 45,000 tons or about 12 weeks worth in distribution channels while a new crop is harvested and routed to buyers.
Peterson said those two seasons are an example of the problems the tree-pull program can impact. In terms of value of production, the $154 million of 2000 plunged to $101 million the following season.
“We are encouraging growers to go ahead and pull their trees to get the supply and demand situation back into balance for the good of the entire industry, Peterson said.
However, he added, growers were also urged “to think long and hard” before removing trees.
“Some think, with the trees coming out, prices will automatically go up. That isn't necessarily true, and the success of the program will be how many acres we get out of the ground.”
Under agreements for USDA funds, subject orchards must be removed by June 30, and the land may not be planted to plums for drying until after June 30 of 2004, Peterson said. To be eligible for removal an orchard must have a production of at least 1.5 tons per acre. In recent years, production has averaged about 2.2 tons per acre.
About half the acreage approved so far is made up of orchards of 20 acres of less, and growers plan various utilizations from row crops to other tree crops.
Peterson, who is also executive director of the Prune Marketing Committee responsible for industry statistics on acreages and inventories, said, “This is a challenging time for our industry, but there are some bright spots. Bearing acreage is holding at 86,000, while non-bearing acreage peaked at 26,000 in 1998.”
Pending compilations by the California Agricultural Statistics Service (CASS), non-bearing acreage is now estimated at about 10,000, not including tree removals.
Peterson traced the oversupply to the sale, according to nursery reports, of more than 1.5 million prune trees in 1994, or more than five times the normal replacement level of about 300,000 trees. The flurry of new plantings came on the heels of record prices of $1,100 per dried ton in 1993.
Nursery projections for orders this year call for 272,000 trees, and a survey this spring will reveal the actual number.
Not so bright, however, are prospects for grower returns per ton, which have been well off the peak of 1993. CASS numbers set the 2000 return at $809, the lowest since the $764 of 1998 and the second lowest in the last 10 years. Figures for 2001 are being compiled.
“This is the backdrop for why we went to USDA and asked for funds to do a tree-pull program to help re-balance supply and demand,” said Peterson.
All processed condition shipments for 2000 were 173,000 tons, up 6 percent from 1999. Domestic sales, which gained 5 percent, claimed about 54 percent of the whole, while exports rose 7 percent. Early domestic sales for 2001 went to USDA school lunch and domestic feeding programs.
The California Dried Plum Board is pursing completion of two research projects for industrial and foodservice uses. One, at Kansas State University, is following up on studies indicating that dried plums suppress food-borne pathogens in meats.
Another, at Texas A&M University, advances the discovery that the fruit has properties that can eliminate “warmed-over” flavors in processed meats.
On the export front, with support from the USDA Market Access Program, the board continued its marketing in Japan, China, Germany, the United Kingdom, and Scandinavia. In Germany, for example, trade and public promotions center on promotion of California prunes as a healthy snack.