Cost-Saving Opportunities in Cold Storage for Produce Growers

Over the last few decades, fruit growers across the U.S. have embraced new technologies in cold storage that have transformed production for many crops from a seasonal calendar to more of a year-round calendar. It was not that long ago that fruit was harvested in late summer and fall, and crops were sold around the new year. Growers had their paychecks to invest in next season’s crop sooner.

But things have shifted with technological advances and fairly quick adoption from growers who want to bring a higher-quality product to market with more accuracy.

From a production standpoint, these advances enable growers to meet rising consumer demand for a variety of crops — including apples, peaches, and cherries — outside of harvest season and consequently provide more opportunities to generate revenue. From a financial standpoint, there is a catch because cold-storage practices mean growers now have to manage their operations and expenses on a year-round schedule, which can make it more difficult to maintain operating capital over a longer period of time.

You can take some of the pressure off your bottom line by strengthening your capital management strategy. Here are four tips to help manage your finances despite longer supply and harvest windows:

Control costs to open up investment opportunities

Going into 2025, there is no question growers are looking at all options to reduce expenses and manage operational costs, which are still trending higher because of the economic climate and inflationary pressures of the last few years. It is challenging to take a wide view of your financial health with these conditions, but it is an important step to develop a strategy for your long-term financial success.

Future-focused growers are considering capital investment strategies to advance their operations. This might include enhancing orchards with higher-yielding tree varieties, or adapting to a high-density setup, which could help lower labor costs. While these longer-term goals may seem out-of-reach in the current market, do not underestimate how quickly small savings can multiply to make these visionary shifts a reality. You can plant those seeds now by focusing on cost-saving opportunities, which will compound and ultimately give you more flexibility to reach long-term savings goals that facilitate growth.

Align your payment due dates to your crop

Many fruit producers are dealing with payment schedules that come due toward year end, which can create a challenge if you have to pay to store the current year’s produce before you have sold last year’s crop. When using financing programs, everyone is laser focused on getting the lowest rates, but in many cases the terms of a loan may have an even larger impact on your bottom line. As you explore your options and research different sources of capital, do not overlook the timing and payback benefits of your lines of credit, which can make it a lot easier to cash-flow your operation.

Diversify your capital management to create financial flexibility

There are many ways to pay for operational expenses, including storage. It is a good practice to review your payment options and ensure you have access to diversified sources of capital, including cash, prepay, bank lines of credit (LOCs) and financing, to pay for the things you need.

There are specific advantages to using various sources of capital. Cash, of course, comes without interest expense. Using a bank LOC may come with a higher rate, but you have maximum leverage to put that money toward any operational expense. Complementing these sources, you should also consider the benefits of using financing offers from retailers that come with attractive rates and can provide even greater financial flexibility. Bringing this level of strategic oversight to determine which sources of capital are best to pay for different types of expenses will ensure your dollars are stretching as far as possible, which can open up new pathways to meet your goals.

Work with experts who understand your needs

Most of the growers I work with think to go to the bank first when they run into cash flow challenges. They are focused on increasing their operating line of credit or may consider secondary loans. It is good to remember that there are many options in the market to access capital, not just banks. In many cases, it is beneficial to work with lenders that are also connected to the agriculture industry, including retailers that offer financing programs, because they have a better understanding of your position, and they will be able to help you access the best products and services to meet your specific needs.

We’re at the point in the year that fruit growers are starting to make preparations for the 2025 season. Now is a great time to reach out to retailers you work with and ask about financing options, so you can plan ahead and ask about different programs and various terms. Doing this early will take some of the stress off your financial plan.

At the end of the day, fruit growers need to pay attention to the bottom line and invest in tools, products and services that will save money while still growing more fruit and maintaining the high quality the market expects. You can accomplish all three of those outcomes with cash flow management and strategic use of financing programs.