Nurseries Monitor Economy, Buy Local Trend

In an economy where every penny counts, luxuries like high-end wine are taking a backseat to necessities, and justifiably so, even winegrape growers will admit. The real story, though, is how nurseries and growers are adapting to changes like these, and where the opportunities lie.

Ernie Bowman of Kendall-Jackson Nursery in Santa Rosa, CA, says sales volume is down about 50% this year over last, and he anticipates 2010 being an equally challenging year. “We did about half the production that we would normally do,” he says. “We had a lot of dormant vine inventory left at the end of the season, so we ended up replanting a lot of dormant vines from this year for next year.” Regrafting helped the nursery achieve significant cost savings. “But I guess time will tell if that was a smart move or not,” he says.

Trading Down = Pent Up Demand?

While things may be looking bleak for high-end wines right now, the current economic situation could prove to be a boon to that industry in the future. “Everyone’s trading down, but when we get past this economic hiccup, I think there’s going to be pent up demand again for premium-quality grapes, and people will start planting again,” says Ernie Bowman of Kendall-Jackson Nursery. And that’s not the only positive sign. “You look at all the demographics, and wine consumption is continuing to go up. It seems that more younger people are now drinking wine, so I think the demographics are good, and so I’m optimistic about the future,” he adds. “I think it’s going to take us a couple of years to get back, but I think once we do, the pent up demand is going to be there and the business will be healthy again.”

Bowman believes that if there’s going to be any vineyard expansion in the next couple of years, it likely will be in the central valley from Lodi down to Fresno, where land costs less. Many of the major plantings in California in the past 10 years have been primarily coastal, he says, where the price of land is an issue. “You have land cost and then you’ve got development cost of vineyards, and that dictates that you’ve got to get a certain level of pricing for that fruit to make it all economically pencil out,” Bowman says. In lower cost areas, however, growers can produce fruit for a dollar value per ton that makes it easier to stay profitable.

Quality Sells

Since it’s difficult to predict consumers’ behavior, determining what grapes to plant can be tricky. It’s market driven, and in many ways, reactionary. “Five years ago, Pinot Noir was really somewhat of a minor variety,” Bowman says. “But with the advent of ‘Sideways,’ all of a sudden the focus really became on Pinot Noir, and in the last five years, California has probably planted more Pinot Noir than they had planted previous to that, so there are a lot of non-bearing acres of Pinot Noir. Will that trend continue? I don’t know.”

Bowman says the biggest opportunity growers have to shine is from a quality standpoint. “I think quality always sells,” he says. “I think what growers have to do is figure out what the best variety for their site is and grow the best quality fruit they can. So a lot of it is doing due diligence and making sure that what you’re planting is the right variety and rootstock for that site to give yourself a chance to grow the best fruit you can.”

John Duarte of Duarte Nurseries in Hughson, CA, is quick to point out that low-price imports also are affecting U.S. grape growers. “Where everyone was expecting Chardonnay, for example, to become more demanded by now, there’s so much bulk Chardonnay being hauled in from Australia at low prices that a lot of Chardonnay growers are surprised to see their crops aren’t in demand,” he says. “So there’s not a lot of Chardonnay planting, and I think a lot of us would’ve predicted Chardonnay would be short in California right now.”

Love The Locavores

The economy isn’t the only factor affecting growers and nurseries this year. The burgeoning buy local movement is making many growers rethink what they should grow and who they target. “We have what I would call a growing direct market industry in the East, and that’s roadside markets and farmers markets,” says Phil Baugher of Adams County Nursery in Aspers, PA. This has resulted in growers — particularly smaller ones — diversifying into a more mixed crop portfolio, he adds. “Where they used to be just tree fruit growers, they’re now diversifying into blueberries, strawberries — small fruits, and some vegetables, to respond to the growth in the demand for locally grown produce,” he says. “That has affected us in what we’re doing here at the nursery.”

Baugher adds that for some Eastern growers, maintaining a more local focus is easier than trying to compete with California peaches and Washington cherries in the wholesale market. The nursery has been adapting with the changes, but Baugher says the transition has been over time. “We used to grow primarily peaches in stone fruits, and now we grow a lot of white flesh peaches, nectarines, and donut peaches,” he notes. The nursery has had to broaden its selection, as peach growers who used to grow six or seven varieties for wholesale are now growing upwards of 40 varieties for retail, and a mix of different types of stone fruits, as well.

“We continue to see growth in the direct market, buy local trend,” Baugher adds. “I’ve seen some statistics that there’s about 10% annual growth in the direct farmer to consumer market.”

It’s hard to pinpoint what exactly led to this shift in consumer behavior, but Baugher thinks it might have something to do with shoppers’ disenchantment with big supermarkets and megachains. “This is just the pendulum swinging the other way,” he says. “People want to connect with the person that produces their food. The majority of the produce is still sold by the major retailers, but many growers on the East coast are turning to this direct market opportunity as a way to redefine themselves.”

Leave a Reply

Featured Stories

FruitsSexual Evolution May Bear More Fruit In The Orchard
October 30, 2014
Scientists take a closer look at genes and find new plant breeding possibilities. Read More
Apples & PearsWashington Apples To Restart Shipments To China
October 29, 2014
Agreement reached between U.S. and Chinese governments to reinstate market access after two-year absence. Read More
EquipmentEnter To Win A Kubota At The Washington State Horticultural Association Annual Meeting
October 29, 2014
Attendees have a chance to take home a new utility vehicle courtesy of Wilbur-Ellis and Western Fruit Grower. Read More
CitrusUSDA To Provide $4 Million For Honey Bee Habitat
October 29, 2014
The funds will go toward helping growers implement conservation practices to improve honey bee health. Read More
FruitsHuge California Drought Meeting Planned
October 29, 2014
State, federal officials to meet as forecasts for the coming year look bleak. Read More
PotatoesNew CEO At Black Gold Farms, A Top 100 Grower
October 28, 2014
Eric Halverson takes the reins at the potato operation, while his father Gregg will remain president of the farm’s board of directors. Read More
FruitsValent U.S.A., MGK Enter Into Marketing Agreement
October 28, 2014
Valent U.S.A. to manage the marketing and sales of MGK’s crop protection line of insect control products beginning in April 2015. Read More
VegetablesMultistate Land-Grant University Research Project Contributes To Domestic And International Dry Bean Industry
October 28, 2014
The project began in the 1970s as a Regional Initiative and has since expanded Internationally. Read More
FruitsMichigan State Offers Online Database Of Tree Fruit Diseases, Insects
October 28, 2014
Search engine helps growers identify several issues in the orchard. Read More
Stone FruitStudy Examines How To Keep Sweet Cherries Fresh
October 28, 2014
Canadian researcher says cooling of sweet cherries is key to delivering a quality product. Read More

The Latest

FruitsSexual Evolution May Bear More Fruit In The Orchard
October 30, 2014
Scientists take a closer look at genes and find new plant breeding possibilities. Read More
Apples & PearsWashington Apples To Restart Shipments To China
October 29, 2014
Agreement reached between U.S. and Chinese governments to reinstate market access after two-year absence. Read More
EquipmentEnter To Win A Kubota At The Washington State Horticult…
October 29, 2014
Attendees have a chance to take home a new utility vehicle courtesy of Wilbur-Ellis and Western Fruit Grower. Read More
CitrusUSDA To Provide $4 Million For Honey Bee Habitat
October 29, 2014
The funds will go toward helping growers implement conservation practices to improve honey bee health. Read More
FruitsHuge California Drought Meeting Planned
October 29, 2014
State, federal officials to meet as forecasts for the coming year look bleak. Read More
PotatoesNew CEO At Black Gold Farms, A Top 100 Grower
October 28, 2014
Eric Halverson takes the reins at the potato operation, while his father Gregg will remain president of the farm’s board of directors. Read More
FruitsValent U.S.A., MGK Enter Into Marketing Agreement
October 28, 2014
Valent U.S.A. to manage the marketing and sales of MGK’s crop protection line of insect control products beginning in April 2015. Read More
VegetablesMultistate Land-Grant University Research Project Contr…
October 28, 2014
The project began in the 1970s as a Regional Initiative and has since expanded Internationally. Read More
FruitsMichigan State Offers Online Database Of Tree Fruit Dis…
October 28, 2014
Search engine helps growers identify several issues in the orchard. Read More
Stone FruitStudy Examines How To Keep Sweet Cherries Fresh
October 28, 2014
Canadian researcher says cooling of sweet cherries is key to delivering a quality product. Read More
Protected AgricultureLED Lighting Symposium To Be Held At University Of Ariz…
October 27, 2014
Event to focus on LED lighting technologies for specialty crop production. Read More
Cucurbits11 Cool Cucurbits For Florida’s Climate
October 27, 2014
Leading vegetable seed companies highlight high-performance selections for growers in the Sunshine State. Read More
CitrusModern Agriculture Is A True Centerpiece Of Thanksgivin…
October 27, 2014
FFAA's Mary Hartney says take time during this holiday season to give thanks where thanks is due. Read More
CitrusNOAA’s Winter Weather Outlook Runs Hot And Cold
October 27, 2014
Repeat of last year’s extreme cold and snow events east of the Rockies unlikely. Read More
Leafy Vegetables13 Lovely Leafy Green Varieties [Slideshow]
October 27, 2014
Browse the gallery below for details on 13 leafy greens varieties from leading seed breeders and distributors. Read More
FruitsBig Bucks Given To Grow Better Fruit Crops
October 27, 2014
Two projects to be focus of five-year, $10 million grant from USDA. Read More
CucurbitsFight Phytophthora Blight Of Cucurbits
October 25, 2014
Learn how to identify, the survival and spread, as well as management methods for this disease. Read More
Varieties & RootstocksPlaying The Citrus Rootstock Market Has Risks And Rewar…
October 24, 2014
Experimental material forcing producers to roll the dice. Read More