A Thoroughly Modern Farmer Takes Apple Grower Of The Year Honor
Bye-bye ‘Braeburns.’ ‘Red Delicious’ — really? Cripps Pink’ — c’mon. ‘Goldens’ and ‘Grannies?’ Get outta here.
Of the eight top apples listed by the Washington Apple Commission, Scott McDougall grows just three, ‘Honeycrisp,’ ‘Gala,’ and ‘Fuji,’ — and his acreage of these is relatively minor.
McDougall, who handles the growing end of McDougall & Sons, while his brother Stuart is in charge of packing and shipping, could be called a thoroughly modern grower. He’s largely gotten away from older varieties, concentrating on high-dollar newer club varieties of limited acreage.
In part because of his bold approach, American Fruit Grower® and Western Fruit Grower® magazines are pleased to announce our 2016 Apple Grower of the Year™ is Scott McDougall of Wenatchee, WA. McDougall will be formerly presented with the award, which is sponsored by Valent USA, at the annual USApple Association and Apple Crop Outlook & Marketing Conference in Chicago, Aug. 25-26.
McDougall follows in the footsteps of such early award winners as Grady Auvil, John Rice, and Doyle Fleming, as well as recent recipients Bill and Jeannette Evans and Bill Dodd. But really, he’s taken an entirely different path.
When McDougall graduated from college in 1975, he and his brother Stuart were running a relatively small operation, Horan (their mother’s maiden name) Brothers. “When I first got out of school, we really didn’t have much orchard,” he says.
Their father, Bob, was running McDougall Orchards in Monitor. They decided to combine forces — exactly 40 years ago — and McDougall & Sons was born. They went about their business growing mostly pears along with reds and goldens like most everyone else for the next few decades, missing on some new varieties, hitting on others.
“‘Granny Smith’ — I was way off on that one, we just didn’t plant enough because I thought there was only a limited amount of people who would prefer a tart apple,” McDougall says. “But I remember planting ‘Gala’ in the late 1980s, and people were like ‘What?’”
Then in 1989, McDougall & Sons became one of the founding partners of CMI, a marketing company. The forming of CMI would turn out to be a wise move, as just after the turn of millennium came a series of actions that would forever change the fortunes of McDougall & Sons.
Going for the Gusto
In 2003, New Zealand’s ENZA wanted to build a program in the U.S. with such varieties as ‘Pacific Rose’ and ‘Jazz.’ McDougall & Sons decided to take the plunge, first growing the fruit, then packing it.
“We eventually became one of only three packers, the other two being Allan Bros. and Crane & Crane,” McDougall says.
The following year, 2004, the Okanagan Plant Improvement Company (PICO) put out a request for proposals for growers to get exclusive rights to ‘Ambrosia,’ a chance seedling found by Wilfrid and Sally Mennell among a row of newly planted ‘Jonagold’ apples at their farm in British Columbia’s Similkameen Valley.
McDougall decided it was a great apple, but it had two huge drawbacks, it was a big ethylene emitter and it had a short harvest window. Then came serendipity.
“Right about then was when (the 1-MCP product) SmartFresh began getting a foothold,” he says. “With intensive harvest management, we could get in and pick and store what was then a four-month apple, and turn it into a near year-round product.”
McDougall & Sons still holds exclusive rights to ‘Ambrosia.’ In 2015, the company packed 1 million boxes of the variety, more than one-fourth of their total of 3.7 million boxes of apples.
Overall, they pack for a total of about 100 growers, though they grow about half their tonnage on their 3,500 acres. They also have 400 acres of cherries and 200 acres of pears.
Key Is Differentiation
Having ‘Ambrosia’ and the ENZA club apples – the most recent is ‘Envy,’ which they are really excited about – provides them with a tremendous edge, McDougall says. It’s been particularly advantageous in recent times when Washington has seen large crops.
“These apples have helped us through these huge crop years,” he says. “And when you look at these huge crops, it doesn’t look good for commodities.”
Just run the numbers, McDougall says. To purchase the land and plant a high-density apple orchard with the necessary infrastructure costs about $60,000 an acre.
“And we have two years of growing before we get a nickel back,” he says.
The reason he doesn’t grow older varieties, i.e. “commodities,” is that even if you get a yield of 80 bins per acre at $200 per bin, the annual growing costs are $10,000 an acre, leaving a return of just $6,000 per acre. That means it takes a full decade to realize that $60,000 investment.
“It takes 10 to 11 years to make a profit, and that’s if there’s no hail or other weather events. I don’t think any banker would be excited by that,” he says. “We’ve been able to get pay-backs in six years because of the ‘Ambrosia’ and ENZA varieties.”
But planting those new and different varieties wasn’t such an easy decision as it looks now, with the passage of time. McDougall says there was a watershed moment about a dozen years ago, when Stuart’s son, Bryon McDougall, returned after graduating college.
“We decided we could stay the same and not grow, but we didn’t like our odds,” he says. “We were either in – or we were out.”
They went in, of course, and the company would never be the same.
WHAT OTHERS ARE SAYING
Interestingly enough, the first three people to nominate Scott McDougall for Apple Grower of the Year each mentioned a different attribute.
The Washington Tree Fruit Research Commission’s Tom Auvil said McDougall is quick to share information with groups visiting from other parts of the world, and welcomes hosting research trials.
“I nominated Scott early on as Apple Grower of the Year because I couldn’t let the opportunity to share with the industry slip away,” he said. “His incredible support of research and development projects with his own dollar on his own farms (is) just something we should recognize wholeheartedly.”
Chamberlin Agriculture’s Del Vanderhoff said McDougall is an extremely skilled horticulturist, to the point that he once grafted over the same block of cherries three years in a row.
“I’ve worked with Scott for over 30 years, and I’ve really been impressed with his innovative orchard management techniques,” he said. “If you get around Scott at all, you know he’s passionate about the tree fruit industry. Ask him about one of his new plantings, and you’ll soon see how passionate he is.”
CMI Vice President Steve Lutz, who was once president of the Washington Apple Commission, mentioned his keen eye for successful new varieties.
“If you put together a list of the most innovative growers in the state of Washington, I don’t think you could get out of the Top Five without putting Scott McDougall on the list – he would absolutely have to be there,” he said. “When you look at what he’s done with ‘Ambrosia,’ with ‘Jazz,’ with ‘Envy,’ with ‘Pacific Rose’ and other varieties, he’s always been out front in terms of being innovative and getting out front of the top new varieties.”
LEAVING A LEGACY
Four years ago, McDougall & Sons purchased 830 acres of dryland wheat located north of Pangborn Memorial Airport in East Wenatchee, WA.
Scott and Stuart McDougall, who represent the family’s fourth generation of farming, wanted to honor both the third and fifth generations.
“My brother and I have a good relationship, we have always have had a good tremendous amount of trust and respect for each other,” says Scott McDougall, “and we wanted to look back, as well as forward.”
They each have a son following in their respective father’s footsteps, as Stuart’s son Bryon is on the packing side of the operation, and
Scott’s youngest son Tyler is on the orchard side. Scott’s other son, Matt, is a dentist and shareholder in the company.
Scott and Stuart’s father, Bob McDougall, who had a long career in the tree fruit industry and also served in the state Legislature for a dozen years, died the same year they bought the land, 2012. He was 87.
What makes the project so intriguing from a horticultural perspective is the orchard blocks will be at differing elevations – all the way up 2,130 feet. It wasn’t easy to develop, as they had to pump water from wells along the Columbia River for 3 miles up to the first of three reservoirs.
From the first, a holding pond, they pumped it uphill to the 16-million-gallon main reservoir, which is located at 1,500 feet. Some of that water is then pumped up to the reservoir at the highest elevation, which holds 5 million gallons.
“We’ve been doing it in stages,” Scott McDougall says. “That was partly because we wanted just the right trees.”
They started planting in 2014, mostly apples, but some cherries as well. As for apples, they’ve planted ‘Fuji’ and ‘Gala,’ as well as ‘Honeycrisp’ and their club apples, ‘Ambrosia,’ ‘Jazz,’ and ‘Envy.’ They have only 125 acres left to plant, with much of that being saved for a variety developed by Washington State University, ‘Cosmic Crisp.’
McDougall says the higher elevations can produce higher quality apples with greater storability and prolong the picking window. Also, the Legacy orchards are so isolated that they have pulled synthetic fertilizers and in three years it will be almost all organic.
“This is for the past generation,” McDougall says, looking out over the majestic vista from 2,130 feet, “and for the next generations.”
INVESTING NOT IN A 401(K), BUT H-2A
Many growers look at the federal H-2A guest worker program – not without good reason – as a bureaucratic fiasco. But for McDougall & Sons, it’s a necessary cost of doing business.
With modern, high-density orchards costing $60,000 an acre to establish, a grower has to ensure he gets sizable returns. There are an awful lot of factors that go into that, but at the most basic level, you have to make sure you get the fruit off the trees. That’s no slam dunk these days with the labor market getting tighter and tighter, Scott McDougall notes.
“To make these investments, we couldn’t take the risk that people would show up, so we look at it (H-2A) as an insurance policy,” he says. “It would be almost like suicide to make an investment like that without knowing if you can harvest a crop.”
McDougall & Sons first signed up for the program in 2008, and now they annually bring in approximately 700 H-2A workers each year, almost all from Mexico.
The key is to be very careful about the contracts, McDougall says. They have three separate contracts, bringing in people for various lengths of time for various tasks.
They learned the hard way about the necessity to stagger the contracts to make sure they have enough people to harvest the crop the very first year they used the program. To finish the harvest, McDougall didn’t see any other answer but to bring in minimum-security prisoners, making him the butt of jokes among his fellow growers.
“If we hadn’t gotten in to pick it, we could have lost upwards of a million dollars’ worth of fruit – 60 acres of ‘Jazz’ apples,” he says. “We learned in a hurry not to send workers back too soon.”
The first wave arrives Feb. 1, so they are in time to prune, install trellis, and plant trees. They stay for nine months. The second wave arrives in June, in time to thin apples and harvest cherries. That group stays for five months. The final wave arrives in August for apple and pear harvest, staying for a total of 2½ months.
By staggering the contracts, they make sure everyone has plenty of work – at least 30 hours per week is mandated by the program – and the fruit is harvested at peak.
“It’s not easy because we pick for five months, from the first week of June until the first week of November,” says McDougall says. “There are only 10 days in that period when we’re not harvesting.”
The company has an 85% return rate on their H-2A employees, which means they have workers who know the ropes, and it also means they are treating the workers right.
“We’re very proud of that,” McDougall says. “We have a strong HR staff, and we listen to their concerns, which is all part of the program.”
Of course, what with the mandatory minimum hourly pay of $12.62, and the fact they also have to provide housing, the program is not cheap.
McDougall says they have invested more than $9.5 million in housing alone to provide 700 beds. The housing units are two stories, with 12 people in three bedrooms – each with two bunk beds – upstairs, and kitchens and showers downstairs. He plans on building a 24-bed expansion next year.
“We figure it’s around $14,000 a bed,” he says. “Sure it’s expensive, but it pays off in reliability.”
And while H-2A has paid off for McDougall, he laments the overall impact.
“The sad thing in this industry is that smaller growers can’t afford this,” he says.
THE NEXT BIG THING – PEARS?
There’s an old saying in the tree fruit industry that pear orchards take so long to pay off, growers are told “plant pears for your heirs.”
Like most such sayings, there is some truth to it, as while apple trees can be in full production in their fourth leaf, pear trees take a few more years. The biggest roadblock to earlier production in pears has been the lack of dwarfing rootstocks.
Scott McDougall, who farms 170 acres of pears in Monitor, WA, which he says is “one of the prime pear growing areas in the world,” says the whole pear grower’s philosophy is different.
“You have wider tree spacing, limited production – but constant return, as they’re a little more insulated from the markets’ ups and downs,” he says.
But there is change coming to the pear industry, McDougall says.
“In the next four to five years we will hopefully see some dwarfing pear rootstocks and new varieties,” he says. “We’ve been waiting forever, and it will happen.”
That’s when the next generation needs to take over.
“Then we need new blood in the industry to go out and plant them,” McDougall says. “I told my son (Tyler), you need to build your team, a young team, because mine’s kind of long in the tooth.”