California

The California Tree Fruit Agreement (CTFA) is on the ropes following years of poor returns for growers in the state.

Many stonefruit growers in California last year failed to turnover a profit after an unusually cool and wet spring saddled them with an abundance of small-sized fruit – particularly peaches - which proved difficult to sell.

The problem was further complicated by the fact that the US southeast produced a bumper peach crop, making for some very sloppy domestic markets during the early months of the deal.

Below-normal temperatures persisted throughout the summer of 2010 in California’s Central Valley, which delayed harvesting and ultimately caused a major varietal overlap during the last weeks of the season, which further depressed returns.

One indication of just how dire the circumstances have become over recent years for the industry is that the CTFA – the 78-year-old umbrella organization charged with administering several state and federal stonefruit marketing orders – is on the verge of dissolution.

The first indication of the extent of grower discontent came last October when the state peach and nectarine marketing orders failed to be renewed in an industry referendum.

With another referendum looming in January – this time for the federal marketing order governing peaches and nectarines – CTFA went into cost-cutting mode late last year, releasing a significant portion of its staff and reducing grower assessments for the federal program by nearly 50 per cent.

When the results of the balloting were announced last March, although more than 60 per cent of the industry voted to continue the two marketing orders, it was less than the required two-thirds super majority required by the USDA.

In late March, the USDA announced that it was terminating both programs, leaving just a single marketing order – the California Plum Marketing Board – standing. In effect, the industry had voted the CTFA out of existence.

Left twisting in the winds of industry discontent is the fate of US$2.5m in USDA Market Access Programme (MAP) funds.

“We have US$500,000 in MAP funding to promote plums in Canada, China, Hong Kong, Taiwan and Mexico this year,” said CTFA president Gary Van Sickle.

“The funds will be administered by the CTFA and the state board has been given the go-ahead by the USDA to develop programmes in those countries with the emphasis to be on trade support such as merchandising training. There will be very little – if any – `media` promotions, however.”

Mr Van Sickle is concerned about the impact the CTFA’s pending dissolution will have on future MAP funding for peaches and nectarines.

“The problem is that peaches and nectarines are likely to get lost in the shuffle `of the CTFA closure` as only plums have been given a specific license for `overseas` promotion,” he said.

“If we don’t utilize our current MAP funding for peaches and nectarines, the industry will likely be allocated less `money from the USDA` in the future. It’s basically a use it or lose it situation.”