Oregon’s Largest Cherry Grower Welcomes Challenges

Taking The Long View

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As a vice president for one of the biggest cherry growing operations in the U.S., Orchard View Farms, Ken Bailey would be expected to have a nice office with a window. And he does, but his window looks out not on the soaring slopes of The Dalles, OR, nor on lush orchards, but on a packingline. A packingline that on this July day near the end of the season is bagging and boxing a full 18 tons of fruit per hour. Why would you want a window on this cacophony? “It just creates openness,” says Bailey. “But it’s also symbolic of our philosophy: We’re certainly not hiding anything from our employees.”

It also keeps everyone focused on the task at hand, which is marketing huge amounts of cherries. Huge amounts not only here in the Orchard View packinghouse, but in the Northwest at large. Spurred on by high prices during the last decade, Oregon and Washington growers have planted acre after acre of cherries. Last year they ran into a “Perfect Storm,” a huge crop with lots of smaller fruit.

Consider that in Washington alone, the nation’s top cherry producer, 182,000 tons of fresh market sweet cherries were produced, up nearly 100,000 tons from the 85,000 tons produced in 2008. As might be expected, the price tanked. According to USDA statistics released in late January, the average price per ton of fresh market sweet cherries dropped from $3,350 in 2008 all the way down to $1,120 last year.

Can’t Sell Local

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The situation is much like that faced by the apple industry a decade earlier. That led to some drastic change in the apple business, and Bailey, who emphasizes he is just one cog in the family business (see “Orchard View Farms At-A-Glance”) is asked if something similar will happen in cherries. “Yes, I think there will be a shake-out in the industry,” he says. “But contrary to what a lot of people think, it’s the smaller growers, who can’t justify all the expenses, who are going to have the toughest time.”

Economies of scale are getting more and more difficult to deal with in the cherry business, as equipment and other capital costs continue to increase. For example, while a grower with 120 acres might have three tractors, a grower with 10 acres still needs a tractor. But he’s spreading that cost over just the 10 acres, while the larger grower has 40 acres of yield per tractor.

Also, if labor supplies get tight, as a lot of people expect, Bailey says the smaller growers are going to have a tougher time attracting employees, especially good ones. It’s just human nature. If you’re a crackerjack cherry picker, you’re going to be much more interested in signing up with the grower with 120 acres than the grower with 10 acres. And when you add on all the attendant requirements that seem to be getting piled on in recent times, such as the provision of housing, it’s going to get even tougher. “The government and even the general public might favor the small grower,” he says, “but the economies of scale don’t.”

What about selling direct to the consumer, especially with the “Buy Local” movement strengthening? Can’t smaller growers move their fruit through roadside stands or direct delivery via Community Supported Agriculture programs (CSAs)? That might make sense in other places, but not in Oregon and Washington, says Bailey. “Once you get more than a few growers, you’re over-filling the market,” he says. “Everyone can’t sell locally, there’s just way too many acres. We couldn’t possibly consume all those cherries in the Northwest.”

U.S. Consumption Lags

With the huge crop in the northwest last year, a lot of growers are talking about increasing export markets, and Bailey doesn’t disagree. Orchard View Farms has sold cherries in close to 30 different countries — many of which in turn are then sold in other countries — and they’ve just started marketing cherries in both western and eastern Russia. The company is particularly excited about the largest countries with emerging middle classes, such as China and India. “There’s a huge potential there,” he says, “and we’ve got to find ways to get into those markets.”

But by the same token, Orchard View is not overlooking the domestic market. Far from it, in fact. After the 9/11 terrorist attacks, they pulled back on their international marketing, going from exporting about 65% of their crop a dozen years ago to about 45% today. While 9/11 may have hastened the change, Bailey is quick to mention there were a variety of other factors, not the least of which were volatile exchange rates. Also, they see huge potential in other parts of the U.S. — particularly in areas that have traditionally not consumed a lot of cherries, such as the Southeast — because domestic per capita consumption lags behind that found in Europe and Asia.

One other advantage to marketing domestically is Orchard View doesn’t have to deal with the exacting import protocols required by countries such as Japan, Korea, Australia, and New Zealand, which require fumigation. Though that said, Bailey notes there are parts of the U.S. that are more difficult than others because of fears of such pests as the cherry fruit fly. “One of the worst is the country of California,” says Bailey with a chuckle.

Hail King Bing

Wherever they sell fruit, however, one thing never changes, says Bailey. “If you don’t have big, firm cherries with good flavor,” he says, “you don’t have anything.” To meet and hopefully exceed consumer expectations, Orchard View grows 10 varieties of cherries in four different counties — three in Oregon, one in Washington — along the Columbia River. Growing such a large mix of varieties at a range of elevations also allows them to greatly extend their marketing season.

The season was just three weeks long 20 years ago, and they only packed one variety, Bing. Today they pack a total of 13 varieties (three additional ones for other growers). And the season lasts nearly two months, from the early Chelans grown at an elevation of 200 feet, to the late Sweethearts farmed at 1,800 feet. Even so, some things haven’t changed. “Right now, Bing is still the major variety, and by comparison, it has held its own over time,” says Bailey. “Its quality is holding up as the standard that others are measured by.”

Not that Bailey doesn’t think Bing can be topped. In fact, there have been quite a few varieties over the years that appeared initially to be better than Bing. A lot of it has to do with the fact that growers just know more about Bing — how to grow it, how to handle it. “The newer cherries can look good on the tree, and in the packinghouse, but when they’re taken out of the refrigerator at home, they might not be quite as great as we thought. We still have a lot to learn about the new varieties. We need more research on what happens between the tree and the consumer,” he says. “That super cherry everyone’s been looking for forever? Well, we need to keep looking.”

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