Steve Brown, owner and operator of Happy Valley Harvest in Summerland, B.C., is regarded as one of the finest horticulturists in the Okanagan Valley.Photography by AARON HEMENS/The Globe and Mail
Steve Brown sits on his patio overlooking around 10 acres of premium apples, each slowly reddening in the late summer sun.
Mr. Brown is an apple craftsman, regarded as one of the finest horticulturists in the heart of one of Canada’s fruit baskets – British Columbia’s Okanagan Valley, a patchwork of small family-owned farms whose apples, peaches, cherries and apricots have lined roadside fruit stands for more than 100 years.
Mr. Brown, 41, is meticulous. He puts reflective fabric underneath the apple trees in the weeks before harvest, which allows sunlight to redden the underside of the fruit. He makes his own compost from horse manure and wood chips. He knows how many apples are on each of his trees at any one time, and precisely measures the fertilizer and water inputs to grow the best fruit possible.
But at this moment Mr. Brown isn’t looking at his apples. He’s looking at two pieces of paper on the table. On one, apple prices in 1984. On the other, the prices in 2022.
The best McIntosh apple fetched 32 cents a pound 40 years ago.
In 2022, the best McIntosh sold for the same price, despite inflation over the decades that has sent prices of most other goods soaring.
Despite rising productions costs and inflation causing the prices of many goods to soar over the past four decades, the price of McIntosh apples has largely remained the same.
Simultaneously, production costs – land, gas, labour – have skyrocketed, and extreme weather events (the kind that decimate harvests) have become only more frequent.
“These numbers just don’t work,” he said.
This is the crisis that is eating away at the Okanagan fruit grower. And the crisis has claimed its victims – including the 88-year-old BC Tree Fruits co-operative that closed its doors in July, weeks before apple harvest.
The closing of the packing house co-operative, which also provided assets such as cold storage, bins and horticultural advice, not only raises questions about whether its owners will fall to the same fate, but also about who – or what – will replace it.
Happy Valley Harvest orchard is located in the Okanagan Valley – one of Canada’s fruit baskets – where a patchwork of small family-owned farms have grown apples, peaches, cherries and apricots for over one hundred years.
The Okanagan’s tree fruit grower has managed to survive the Great Depression, two world wars and volatile temperatures as a patchwork of small-scale, independent growers. They managed this through the co-operative, and through transitioning some acres to a cash crop: cherries.
However, beset by operational challenges, facing rock-bottom prices and steep international competition, the co-operative folded. And the cash crop has proven to be fragile in an increasingly extreme climate.
Consolidation and scale therefore might be the only way forward. But this raises questions about the future of the fruit business in the valley. Will the legacy of small-scale growers survive, or will they inevitably be forced to scale and consolidate, leaving generational family farms behind?
To understand the cause of the region’s low apple prices, look no farther than Washington State, a short distance across the border from Mr. Brown’s orchard.
In the Okanagan, an average fruit grower works around 10 to 40 acres of land. There is the occasional heavyweight, but they are outliers.
In comparison, in Washington, farms have consolidated over the past 20 years. Around 60 per cent are larger than 500 acres, with 30 per cent larger than 2,000 acres, according to a 2020 report from investment bank Cascadia Capital.
This was possible because of the 1961 Columbia River Treaty where Canada agreed to build three flood-controlling dams in exchange for U.S. downstream power benefits. The reservoirs that followed – and a masterful irrigation system – transformed Washington’s desert-like landscape into fertile soil perfect for tree fruits.
Today, Washington’s land remains fertile, and it remains cheap – much cheaper than in B.C. Facing urban encroachment, an acre of prime tree fruit soil in B.C. is valued at $100,000 at least and, according to the BC Fruit Growers’ Association, hit $300,000 during the pandemic. The increasing land costs will only continue, according to Farm Credit Canada.
Soil profile of the Okanagan Valley
Dark brown soil is a great type of soil for cultivating fruits. The texture varies from finely granular in sandy soil to fine crumb structure. When irrigated, the soil is rich and fertile and can produce a wide variety of crops. These soils are found throughout much of the valley in a rim that surrounds the lakes.
ZONAL SOILS
GROUNDWATER SOILS
Brown soils
Mineral soils
A
Organic soils
B
Dark brown soils
Black soils
4,500 ft.
Podsol soils
Dark brown soils
River
100 ft.
B
A
john sopinski the globe and mail, Source: obwb.ca
Soil profile of the Okanagan Valley
Dark brown soil is a great type of soil for cultivating fruits.The texture varies from finely granular in sandy soil to fine crumb structure. When irrigated, the soil is rich and fertile and can produce a wide variety of crops. These soils are found throughout much of the valley in a rim that surrounds the lakes.
ZONAL SOILS
GROUNDWATER SOILS
Brown soils
Mineral soils
A
Organic soils
B
Dark brown soils
Black soils
4,500 ft.
Podsol soils
Dark brown soils
River
100 ft.
B
A
john sopinski the globe and mail, Source: obwb.ca
Soil profile of the Okanagan Valley
Dark brown soil is a great type of soil for cultivating fruits. The texture varies from finely granular in sandy soil to fine crumb structure. When irrigated, the soil is rich and fertile and can produce a wide
variety of crops. These soils are found throughout much of the valley in a rim that surrounds the lakes.
ZONAL SOILS
GROUNDWATER SOILS
Brown soils
Mineral soils
A
Organic soils
B
Dark brown soils
Black soils
4,500 ft.
Podsol soils
Dark brown soils
River
100 ft.
B
A
john sopinski the globe and mail, Source: obwb.ca
In Washington, the median purchasing price per acre was around $20,000, according to the Cascadia Capital report.
Aided by cheap, arable land and steady government assistance – such as low-interest federal loans and subsidies – Washington has flooded the Canadian market with cheap, mass-produced apples that have driven down prices, Canadian growers say. And Washington, though it is the closest competitor, isn’t the only one. Globalization and increased shipping and trade mean that B.C. growers are competing with other apple heavyweights, including China, Italy and Chile.
Simultaneously, the apple – once the staple fruit – has lost its market share. The fruit bowl of a Canadian household now overflows with variety our grandparents could barely dream of: kiwis from New Zealand, dragon fruit from Vietnam and bananas from Ecuador, to name a few. And, where apples were dominant because they could be kept ripe many months past harvest, global trade means we can always have the United Nations in our fruit bowl.
The price received at market has therefore hit rates lower, when adjusted for inflation, than even what was seen in the Great Depression, when farmers – facing a race-to-the-bottom industry – demanded “a cent a pound or on the ground.”
Over the past 20 years, Okanagan growers have steadily put their faith in another crop: cherries.
Unlike apples, B.C. cherries, especially those that ripen in August, can command a certain price at market. A cherry is a fragile fruit. It cannot be stored for more than a few weeks, and it must ripen on the tree. And the Okanagan – with its comparatively late summers – can grow a cherry precisely when Washington’s cherries are waning.
This allows B.C. growers to tap into international demand for cherries. A specialty market B.C. growers sell into is China, where red cherries are a symbol of good fortune and happiness during the September Moon Festival.
The cherry is therefore the Okanagan grower’s main cash crop, with a 100-per-cent increase in sweet-cherry acreage from 2011 to 2021, according to a report from the B.C. Ministry of Agriculture and Food.
In 2019, for example, a pound of cherries attained price returns of $2.25, according to BC Tree Fruits.
David Geen was one of the first in the area to switch from apples to cherries. An Okanagan grower whose family has been farming since 1904, he made the switch from apples to cherries in the 1990s. Across the past 30 years, he has expanded his cherry-growing acreages to 1,100, making him one of the largest growers of the fruit in Canada.
However, cherries are as delicate as they are precious. Across the past five years, the crop has fallen prey to devastating factors that have included labour shortages caused by COVID-19, a 2021 heat dome that created extreme temperatures, and a January cold snap this year that wiped out an estimated 90 per cent of the crop.
As one of the largest cherry growers, Mr. Geen’s acreages are spread across the region and not all sites faced the same extreme weather. His losses averaged around 75 per cent this year. As a major player, he was also able to invest in some climate-resilient cherry varieties.
David Geen, owner of Jealous Fruits, at the company's packinghouse and headquarters in Kelowna, B.C., in July.
To Mr. Geen, the struggle of the fruit grower is unfortunate, but also highlights the industry’s need to consolidate and scale – across all commodities.
Scale and consolidation give growers leverage when negotiating with retailers. Large-scale operations – with quality assurance in place – would also give growers consistency of product, another feature retailers and import markets prefer, and get when they deal with the Washington market, Mr. Geen said. This is all essential should B.C. hope to compete.
Large-scale operations also attract investment. For example, in 2019 the Ontario Teachers’ Pension Plan acquired FirstFruits Farms, a Washington grower with three locations, one of which covers 4,600 acres.
However, the pathway to scaling up is challenging. Scale requires cash and low land costs – neither of which are in ample supply for the Okanagan’s fruit growers.
The BC Tree Fruits co-operative was established during the Depression with these factors in mind. Facing rock-bottom prices and a hostile environment where private packing houses were further driving prices to the bottom, forming the co-op meant the industry could scale, without losing independent family farms.
There are interesting parallels between this history and today, said apple grower Steve Brown.
The market is once again in crisis, except this time the crisis led to the failure of the co-operative, not its birth.
Growers – suffering from costs that often outweighed profits – violated contracts and sold their best fruit to private packing houses, Mr. Brown said. This damaged the packing house’s reputation, encouraging other growers to do the same, and making BC Tree Fruits a packing house of last resort.
The co-operative – a single-voting system – also incurred huge debts trying to consolidate its packing operations. The leadership tried to bring all packing under the same roof but a number of growers blocked the sale of land needed for financing, in part balking at the farther distances they’d have to drive to deliver product. When BC Tree Fruits filed for creditor protection in early August, it owed Canadian Imperial Bank of Commerce more than $50-million.
However, the failure of BC Tree Fruits speaks to the flaws of a small-scale system, Mr. Geen said. Scale – at the orchard level – is inevitable.
“Trying to prevent this process is like trying to stop the tide from coming in.”
For small-scale farmers who produce high-quality fruit, like Steve Brown, consolidation is likely to hurt his business.
Many small-scale farmers have to work full-time or part-time jobs (often unrelated to their orchards) to pay the bills, and do not have the time or funding to focus on growing good fruit – for example, carrying out basic horticultural tasks such as consistent hand thinning, rodent control or nutrient programs – or invest in automated irrigation. This can bring down the overall quality of the fruit in the valley, Mr. Brown said. In this way, a large commercial entity could improve the overall quality.
For those small-scale farmers who do have the capacity to produce high-quality fruit, competing will still be a challenge.
In a few weeks, Mr. Brown will ship his apples to Vietnam, where consumers want his pinky-golden ambrosias. They will be displayed on altars in remembrance of ancestors, symbols of heritage and resilience. This market is willing to pay a premium for these apples, and has therefore been a “saving grace” for Mr. Brown’s business.
However, the maximum amount Mr. Brown can ship to Vietnam is one container, maybe five if he has partners. A large-scale operation could ship hundreds or thousands. This market might decide that, while they like Mr. Brown’s quality, they’d prefer to have quantity above having the best. Consolidation is therefore likely to hurt him and his apples.
“I don’t think the future is going to open up the apple grower to more of these markets,” he said. “I think it’s the other way around. If anything we’re going to be squeezed out.”