Closure on two canneries following company’s bankruptcy leave farmers without a buyer for their crop
Peach growers in California’s Central Valley are preparing to remove around 420,000 clingstone peach trees after Del Monte Foods shut down its canneries in Modesto and Hughson left them without a buyer for their crop.
Del Monte announced the permanent closure of the two facilities in April after filing for Chapter 11 bankruptcy last July. Many of the affected orchards were planted under long-term contracts with the company, some lasting decades.
According to a report in the Sacramento Bee, farmers could lose an estimated US$550mn in revenue as a result of the closures.
The federal government has announced an aid package of US$9mn to help farmers clear around 1,200ha of orchards before the start of the next harvest. The aim is reduce oversupply, limit deeper losses, and give growers an opportunity to switch to another crop.
It is believed that this could prevent around 50,000 tonnes of peaches from entering the market and save farmers an estimated US$30mn in additional losses.
Del Monte permanently closed its canneries in Modesto and Hughson in April after filing for bankruptcy last July. The company later sold its canned fruit business to Pacific Coast Producers after a court allowed the asset sale to move forward.
Pacific Coast Producers agreed to buy about 24,000 tonnes of peaches, but that still leaves around 50,000 tonnes without a buyer, according to the Sacramento Bee.
