By this time of year, Richard Lial’s Escalon peach trees – bursting with pink-white blossoms – should have been pruned.
Soon the blooms would need spraying, and he would feed all 105 acres with the water and fertilizer needed for his gorgeous summertime cling peaches.
Not this year, though.
None of that is worth doing, if your peaches are under contract with Modesto’s Del Monte Foods cannery. It’s closing, leaving Lial and many other peach, pear and apricot farmers out in the cold.
“It’s a horrible thing,” Lial says, surveying his trees – so full of budding life and potential, yet destined soon to die because their fruit has no buyer.
Shock waves have washed over the region since January’s announcement that the venerable plant soon will close, leaving 1,800 employees – two-thirds of them seasonal, the rest full-time – without jobs, and numerous growers without a home for their fruit.
“Farming is simply gambling with dirt.” – Mark Twain
Like Carlos Barron. He labored many years on leased land, scrimping and saving for his own.
The dream finally came true four years ago when he was able to buy a
small plot near Hughson. He planted, installed irrigation and secured a
contract with Del Monte.
Because developing an orchard is expensive, and young trees don’t
immediately produce fruit, peach growers know they won’t see any return
on their investment until about year four – in Barron’s case, this summer.
So losing his buyer is especially painful. And costly.
“When you’ve got no home for your peaches, what do you do? Who do you
talk to?” he said.
Slow decline in California peach production, including Modesto
Dozens of peach growers in Yuba and Sutter counties north of Sacramento
had similar questions at a recent gathering. That area produces about twice
as many cling peaches as the Modesto region although both have scaled
back over the years as customer demand for canned goods has waned.
Escalon farmer Richard Lial stands in his blooming peach orchard, whose fruit had been destined for Modesto’s Del Monte processing plant before the company announced the site will close this spring. Credit: Teisy Zavala-Cortez / The Modesto Focus
“Modesto talks about losing 1,800 employees, but look at us who have put
up capital to plant peaches and spent years growing trees – all lost,” Ranjit
Davit told The Modesto Focus. His family has raised peaches for eight
decades near Live Oak, north of Yuba City.
In both regions, growers depend not on roadside stands but volume
contracts with canneries. The notion that local residents could “just eat
more peaches” would not possibly make up for the 50,000 tons growers
would have sent this year, but won’t, to Del Monte.
A few decades ago, 11 such packing plants took their fruit, the Yuba-Sutter
growers were reminded. At the moment, two remain: Del Monte, whose
days are numbered (April 7, according to the company’s official notice to local government agencies) and the Pacific Coast Producers cooperative in Lodi.
“We’ve been in financial woes before,” Davit said. “But you think a 140-year-old company like Del Monte is going to work themselves out of it.”
So most growers did not panic when news of the company’s bankruptcy hit in August. Everyone assumed another would buy it and business would continue as usual.
Growers had seen versions of that scenario over the decades, although some did not reopen under new ownership. A Feb. 2 Modesto Focus analysis found that Stanislaus County has lost 20,000 food processing jobs in this century alone.
Grim news about closure of Del Monte’s Modesto plant “breaks my heart”
Disaster came into clearer focus in January when bankruptcy proceedings showed that no one wants the Modesto plant.
“This is devastating to our area and local economy, just like it is for you guys,” said Brian Greathouse, Yuba-Sutter Farm Bureau president.
Karm Bains, a peach grower and Sutter County supervisor, said, “To wake up one day with no home for your fruit – it breaks my heart.”
The California Canning Peach Association filed a claim for $550 million in Del Monte’s bankruptcy, CEO Rich Hudgins said in an interview. But growers are in line behind other secured claims, “and the reality is we’ll collect nowhere near that sum” in residual proceedings, Hudgins said.
More realistic is CCPA’s hope of persuading the U.S. Department of Agriculture to grant relief funding, Hudgins and several growers said. The group has asked for $9 million to help fruit farmers transition to another crop, similar to previous tree-pulling programs.
Support industries related to agriculture reeling, too
Bains’ father years ago bought all three Yuba-Sutter farms previously owned by Del Monte, when the packer was also in the business of raising its own fruit.
Jim Wolf grew up in homes on farm property managed by his father for Del Monte before the company got out of growing when R.J. Reynolds bought it in 1979. The family went from Yuba City and Wheatland to an island in the Sacramento-San Joaquin Delta, and to Merced County, he said. And he worked for Del Monte through college.
“Del Monte paid for a lot of mortgages, college tuitions and weddings, for my family and others,” Wolf said.
Credit: Garth Stapley / The Modesto Focus
But Wolf’s trucking company, Flow Transportation Services, is among many support services taking a hit from Del Monte’s demise. No longer will he send 40 trucks from his Hughson fleet yard to haul peaches from local growers to the Modesto cannery. He’ll be forced to downsize, Wolf said.
“We’ll lose a tremendous amount, gross-wise,” he said. “Over a million dollars, probably.”
Some of the area’s respected names in peaches, including Hughson’s Darryl Starn and Mark Cederlind, who farms near Hughson and Turlock, count themselves lucky to have PCP contracts. They’ll soldier on, with plenty of sympathy for their neighbors who grew for Del Monte.
“It’ll be brutal,” Starn said. “It’s hard enough to grow a crop without losing someone to process it.”
About a quarter of Eric Spycher’s peach production in Ballico, east of Turlock, has Del Monte contracts, and he will sell about half of this year’s Del Monte crop to PCP before pulling those trees. “So I feel fortunate and injured, both,” he said.
Others reeling from Del Monte’s somber news include pear farmers in the Delta region west of Modesto and in Mendocino and Lake counties. And, many apricot growers on Stanislaus County’s west side, which will celebrate the 54th Patterson Apricot Fiesta May 29-31.
“There’s sadness and frustration from the growers’ standpoint,” said Daniel Bays, a third-generation Patterson grower and Apricot Producers of California board president. His family farm has now-worthless contracts with Del Monte for both apricots and peaches.
“There’s a lot of question marks and uncertainty about what’s going to pay the bills,” Bays said. “There will be guys who give it up and exit the industry.”
Peach imports from countries with low labor costs flood US markets
Like Barron, Bays’ contract with Del Monte started four years ago, meaning his doomed orchard cost a lot to put in without getting any money out.
Lial last year yanked out 50 acres of almonds to make way for a special peach variety endorsed by careful UC Davis research – at Del Monte’s request, he said.
“Today, I wish the almonds were still there,” he said.
He’s considering replacing his peach orchards with almonds, whose prices have started recovering from oversupply a few years ago. But it’s expensive because almond trees are spaced farther apart than peaches, requiring a new irrigation system.
Others also are thinking about pistachios, walnuts or other crops – expensive options requiring years of waiting before trees are mature enough to start bringing in money. And any change, including row crops, means different equipment and a learning curve, some said.
“It’s a scary position,” Cederlind said. “This isn’t something like corn or wheat that you can just disc (plow) under. You spend $7,000-$10,000 an acre to plant these trees.”
It grates on Lial that peaches from China are sold next to Del Monte peaches on a shelf in a grocery store just down the road in Escalon. A big roadway sign at a city entrance used to proclaim “Land of Peaches & Cream,” evoking a heritage of fruit and dairy products, and street fairs of a time gone by.
It’s maddening, Lial said, that growers will get nothing for 50,000 tons of peaches meant for Del Monte, while imports flood US markets with 100,000 tons each year. Many come from China, Greece and South Africa where labor and production costs are much less.
Lial said he’ll likely let go one or two of his seven full-time farmworkers.
“I don’t want to lay them off,” he said. “They depend on me as much as I depend on them, for food for their families and gas in the car. It’s not fun, thinking about laying someone off who’s been with you for 20 years.”
It’s also hard to give up on a crop that has kept three generations of Lial’s family going, he said. He enjoys the seasonal rhythms of peaches – now in full bloom, leafy green trees in three months, luscious fruit two or three months after that, and a dormant beauty when it turns cold.
Losing them “is a sad deal, but it’s reality,” he said. “And that’s our way of life.”
Garth Stapley is the accountability reporter for The Modesto Focus, a project of the nonprofit Central Valley Journalism Collaborative. Contact him at [email protected].
