Corporate takeovers of fruit packers in U.S. add to B.C. farmers’ fears

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The B.C. Fruit Growers Association is worried about the possibility of a corporate takeover of B.C. Tree Fruits, a co-op that handled between a third and half of B.C.’s total tree fruit crop before it filed for bankruptcy last month.

The concerns come after the consolidation of packing houses in Washington state and California in recent years, a move at least one U.S. farmer says has been bad for business.

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“We used to send 100 per cent of our fruit to a warehouse or co-op, and then hope that they gave us some money back,” said Ed Schaplow, owner of Allview Orchards, a small family farm in Chelan, Wash.

“What’s happened here is that those co-ops or warehouses have been taken over or controlled by large corporate interests, so now they answer to shareholders and not the growers.”

In 2019, three fruit-packing co-operatives in the state were bought by a North Carolina-based agriculture investment company, International Farming Corporation, including Legacy Fruit Packers, Valley Fruit and Larson Fruit. Two years later, the company acquired Chelan Fruit.

This consolidation has also taken place in California, where Sonoma County’s last apple processing plant closed earlier this year, with operations moved to Washington state.

Schaplow said that in the years since the takeover of the Washington co-ops, he has lost several hundred thousand dollars from warehouses that refused to pay him for the produce he provided.

That doesn’t take into account the drop in apple prices that has occurred as larger producers flooded the market with thousands of kilos of bad apples, added Schaplow, who said he was not even able to break even last year.

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He said he has seen thousands of small farms shut down because they can’t afford to operate with the prices they are being offered by the new managers of the co-ops.

The state lost 3,717 farms between 2017 and 2022, according to the Washington Policy Center, a think-tank.

Calls to International Farming Limited and one of the co-operatives, Chelan Fruit, were not returned by deadline.

The fear among B.C. growers is that a similar situation could occur if what’s left of B.C. Tree Fruits is bought up by a large investment firm.

B.C. Fruit Growers president Peter Simonsen said he is not sure such a takeover could occur in Canada, but has heard from Washington growers about the problems they are facing. He said he recently talked to one farmer who was thinking of leaving his farm in the state and coming to B.C. to make cider.

“Down there, hedge funds and insurance companies have been buying up properties. They’re looking for somewhere to put their money, so they feel that agriculture is safe,” said Simonsen, who is sure those companies are looking at B.C. Tree Fruits as a possible prize to be had.

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He said that from what he’s heard from farmers in the U.S., the result would be a largely negative one for the industry.

Both B.C. United and the Conservatives have urged the NDP government to freeze the co-operative’s assets and grant farmer’s access to its cold-storage and processing facilities for this year’s crop.

Agriculture Minister Pam Alexis, however, said on Friday that the province does not have the legal power to halt the liquidation proceedings and must go along with whatever the court decides.

“The co-op is a private enterprise. It’s a private business and is now subject to a process overseen by the court, so we don’t have the legal authority to freeze assets,” she said.

“We’re focused on, first of all, getting those fruits to packing houses, and we’ve talked to many folks who have already found packing houses and have made the arrangements. We are assisting farmers that have not yet made those connections, so that they, too, have the ability to get their fruit to market in the end.”

One of those packing houses that has stepped up to the plate to help out is Okanagan Sunshine Fruit Packer Ltd., which says it has already taken in from 8,000 to 10,000 bins of fruit from farmers affected by the closure of B.C. Tree Fruits.

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Owner Jagdeep Gill said he is still working with government to find additional bins and storage to be able to take in even more produce.

B.C. United’s agriculture critic, Ian Paton, said he has heard from many growers who are still struggling to find packers and even those that do are being offered prices for their fruit that at most allows them to break even.

He said that despite the concerns of the B.C. Fruit Growers, bringing in a private firm to take over B.C. Tree Fruits may be the only way to save it.

“What we’re trying to do is to get an independent corporation of some sort to come in and privately take over and purchase the packing plant and the Tree Fruits co-op,” said Paton.

“Most of them are great people, at least in B.C., they are. I could name two or three of them that are agricultural-type companies. They’ve got deep pockets, and they’ve been good to their customers for years, so I don’t see why they wouldn’t be good to the tree fruit farmers in the Okanagan.”

Simonsen said that whatever the solution is, it needs to happen quickly, as once September hits growers will either need to have their fruit in cold storage or sell it as quickly as possible.

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He said a sudden influx of apples on to the market would create chaos and could shorten the apple season from eight months to four or five months, further hurting farmers. The one saving grace could be if the Okanagan gets cool temperatures in September and October, which would help keep fruit from rotting for longer.

“You only have so much storage, regular storage, and controlled atmosphere storage, and so once those are full, then the fruit sits outside,” he said.

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