Difficult year for Okanagan fruit growers

Weather factors reduce fruit profit margins

After a decade of being involved in the executive of the BC Fruit Growers Association, Fred Steele will step away from the industry political fray this week.

A successor for Steele will be elected Friday in Kelowna at the annual BCFGA convention.

“I’m getting right out of it,” Steele said of the fruit growing business. “I’m not sure totally yet what I will be doing with my time, but I’ll probably do some consulting work going forward.”

In his final message to BCFGA members this week, Steele will bring the typical farmer’s perspective, the potential for the future looks promising but the weather remains an uncontrollable catalyst on crop quality, a key characteristic that Okanagan fruit growers rely on to expand export markets abroad.

The average returns for growers were down significantly in 2017, according to the BCFGA, with the hope government subsidy assistance to off-set lower profit margins is forthcoming from the AgriStability program.

Recent: Two candidates seek to replace Steele

Steele blamed what he described as “a rough year” for growers on excessive plus 30 Celsius heat in the summer and a cold, wet spring.

“When you get a couple of days of excessive heat, the fruit tree shuts down to preserve itself and that impacts the maturity of the fruit. We don’t get the consistency of size our market buyers are looking for and that becomes an issue,” he said.

“And the wet spring was terrible for pollination and getting the fruit off to a positive start in the first place.”

Steele says local growers can take some solace in that neighbouring Washington state fruit growers encountered the same weather and fruit maturity issues.

“Both Victoria and Ottawa have made it quite clear there will be no major infusion of cash for growers going forward. There were some rumours floating around of growers getting five cents a pound for subsidization but that’s just political hype,” he said.

“The AgriStability Fund can help off-set some of the profit margin differences. It won’t cover the difference lost but it’s a whole lot better than nothing.”

Recent: Agriculture minister meets with Okanagan industry leaders

Along with fluctuating profit margins, the impact of minimum wage increases, with wages accounting for 40 to 60 per cent of fruit farming costs, are also a concern for orchardists, noted Steele.

Minimum wage goes up to $12.65 as of June 1, 2018, and will escalate annually until reaching the level of $15.20 as of June 1, 2021.

Steele says for a commodity industry like fruit production, it is virtually impossible to pass those costs off in what is already a volatile price market.

“For a typical small business, they can pass that cost to consumers by product pricing. But for fruit growers selling a commodity, we can’t do that. We can only sell for what the market will bear, so that is a big stumbling block for us,” Steele said.

Steele said the solution is growing quality fruit and the right size that market buyers want, particularly concerning off-shore markets.

In recent years, the Okanagan fruit industry has made headway in East Asia markets such as China and South Korea, and Steele says those efforts must continue.

Steele noted that future airport expansion plans will play a factor in boosting export potential.

“The golf course south of the airport has been purchased by the city with the long-term plan to extend that runway. When that happens, we’ll have cherries and apples flying out of here every day bound for Asian markets,” he said.

Steele said fruit growers are also looking for government to clamp down on agricultural land buyers who purchase productive farmland to build large houses with a minimal $2,500 farm-related revenue annually to qualify for reduced property tax rates.

“With the BCFGA, our minimal revenue rate is $15,000 in order to be part of our association. The $2,500 figure was a lot back in 1973 when it was set but it’s not now. That has to change.

“Rather than seeing 50 acres of lawn, we’d rather see growers have access to ALR land that is currently not productive.”

The BCFGA convention takes place Thursday and Friday at the Coast Capri Hotel in Kelowna. Among the keynote speakers will be Kelowna-Lake Country MP Stephen Fuhr (11:45 a.m. on Friday) and B.C. Agriculture Minister Lana Popham (1 p.m., Friday).

To report a typo, email: edit@kelownacapnews.com.


@BarryGerding
barry.gerding@blackpress.ca

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