Okanagan apple growers will soon receive the highest-ever prices they've been paid for their fruit.
Payments averaging 25 cents a pound are expected, up from
20 cents last year, and far above historic lows of less than two cents a pound in the late 1980s.
"It's very good news for the growers," Alan Tyabji, chief executive officer of BC Tree Fruits, said Wednesday.
Significant production declines in Eastern Canada and the U.S., caused by an early frost which damaged trees, helped push prices for B.C. apples to record levels, Tyabji said.
He also attributed the spike in prices to an overall improvement in the quality of Okanagan apples, with more growers producing varieties such as Royal Gala and Ambrosia, which typically command higher market returns.
The payments, which are for last year's crop, are expected to be authorized today at a meeting of the BC Tree Fruits board, Tyabji said. The co-operative agency works to pack, ship, and market apples on behalf of about 800 orchardists in the Okanagan.
Jeet Dukhia, president of the BC Fruit Growers Association, was cautiously optimistic about orchardists receiving the record-high payments.
"I hope (Tyabji) is right, but we haven't seen the payments yet," Dukhia said. "I'd like there to be some good times for growers, because we've been through some rough years."
Actual final payments to growers for the 2012 crop will vary, depending on the quality of the fruit they produced, and the varieties they sold to the co-op. The average of
25 cents a pound predicted by Tyabji is for all varieties, and includes apples of sub-par quality which are typically used for juice.
Production costs vary from grower to grower, but has been said by industry officials to average about 20 cents a pound in recent years. In 2011, growers' returns averaged about 16 cents a pound, making it one of many recent seasons where revenues haven't even matched costs.
With total production of 3.2 million, 40-pound boxes a year, the Okanagan is a small player on world apple markets. Prices are determined largely by the size of the big apple crops in New York, Pennsylvania and Washington state, with the state to the south of B.C producing 100 million boxes
"The frost (last spring) really hit the Eastern orchards hard. A lot of the growers were wiped out, so that drove up prices for our apples," Dukhia said. "I hope growers use this money to invest in the higher-quality apples, so they'll also have better returns in the years ahead."
He and Tyabji made their comments after a press conference in Lake Country where it was announced the provincial and federal governments are providing $735,000 for a new apple sorting line at a packinghouse owned by BC Tree Fruits.
The new equipment, which uses optical scanning devices to sort and grade fruit, will cut production costs and increase direct returns to growers.
"This investment will increase
efficiency by lowering packing costs and increasing competitiveness for the overall operation and producers," said federal agriculture minister Gerry Ritz.
BC Tree Fruits is going through a wide-ranging effort to streamline its operations throughout the Okanagan.
Measures include selling-off surplus properties with an estimated value of $20 million and laying off workers in favour of more automated equipment, such as the new processing line at the Lake Country packinghouse.
"Sure, the industry is shrinking and it's not as profitable as it once was, but this is not an ominous move," Jim Elliott, president of BC Tree Fruits, said in 2011 when the re-organization plan was announced.
"It's simply putting surplus facilities and properties for sale to free up capital and put it to better use by investing in the facilities we're using right now and into the future," he said at the time.