Ontario fruit growers face major challenges as they shift production into more higher-value fresh items for supermarkets, industry leaders say, following a series of closures of fruit processing plants.
While demand is increasing for fresh, locally grown produce at retailers, stepped-up production in apples, peaches and other fruits may exacerbate price slumps that have pinched growers in recent years. Ontario growers have already watched fruit prices slide after most of the province’s canning businesses closed.
Developing new, viable fresh markets is going to be a challenge, said Adrian Huisman, a manager with the Ontario Fresh Grape Board and the Ontario Tender Fruit Board.
“The expected increase in fresh peach production will be a challenge for our growers and marketers,” said Huisman, who’s also an advisor to the Ontario Apple Growers. “There’s only so much of a market for fresh-market peaches, but since we lost the fruit canning business, many growers transitioned into fresh-market crops. It’s our challenge to find a market for that additional product.”
Huisman echoed findings in a recent report that urged the Ontario fruit industry to develop a brand strategy, raise focus on consumer demands and take other steps to improve efficiency and competitiveness.
The report, “Fifteen-Year Comprehensive Strategic Plan for Ontario Apple, Tender Fruit and Fresh Grape Industry," was released March 31.
“Paramount to the strategy’s success will be developing a relentless focus on satisfying (or exceeding) the needs and expectations of the end consumer,” according to the report, commissioned by the Fruit Marketing Board, the Apple Growers and one other industry groups.
Canadian apple growers’ losses have swelled as canneries shut down and prices tumbled below the cost of production. According to press reports earlier this year, average apple prices fell to about 13 cents a pound Canadian, almost 10 cents below the break-even mark.
Growers have also been hurt by large crops in Michigan and New York and recent strength in the Canadian dollar, which neared parity with the U.S. dollar this year. A stronger Canadian dollar makes Canada’s goods more expensive for U.S. buyers.
In addition to emphasizing higher-value retail products, Ontario fruit growers also should improve data-sharing throughout the supply chain and hire a professional from the consumer packaged goods industry to oversee sales and marketing, according to the report.
Part of the challenge for growers, Huisman said, is that it takes two to eight years after planting for trees to bear fruit. Still, Huisman said Ontario’s growers are “well-positioned in pears, plums and nectarines with market opportunities and unique varieties.”
For peaches, “there’s a lot of new varieties out there that have been planted, and production will expand. I believe that this creates opportunities not just challenges.”
“The low end may fall to the wayside,” Huisman added, referring to peaches that aren’t the preferred size or color or lack other qualities.
“We have to look at what our consumers want and what our retailers want, and meet those standards,” Huisman said.
In 2008, Ontario apple prices averaged 17.3 Canadian cents a pound, down from 18.6 cents in 2007, according to the province’s Ministry of Agricultural Food & Rural Affairs. The farm value of apple production fell to $73 million Canadian in 2008 from $92.3 million in 2007.