Dead and long gone: Peach and nectarine marketing orders - The Packer

Dead and long gone: Peach and nectarine marketing orders

10/27/2011 06:22:00 AM
Tom Karst

How could something "so right" 20 years ago be "so wrong" today?

The USDA has published a final rule terminating the federal marketing order for peaches and nectarines. No surprise here, as the final rule was just a formality to an already previously announced decision.

From the summary: The Department of Agriculture (USDA) has determined that these marketing orders are no longer an effective marketing tool for the handling of nectarines and fresh peaches grown in California and that termination best serves the current needs of the industry while also eliminating the costs associated with the operation of the marketing orders.

With the nectarine order in place since 1958 and the peach order since 1939, it wasn't like the USDA didn't try to keep the orders in play. From the rule:

Despite USDA efforts to help refine the programs over the past several years, growers have continued to express their belief that the programs no longer meet their needs.

Perhaps the increasing size and sophistication of growers/marketers was the primary reason for the downfall of the orders. Putting a finer point on it, the USDA tried to sum up the progression of the orders:

Originally established to maintain the orderly marketing of California tree fruit, the quality regulations under the order evolved over the years to reflect industry trends. The ``California Well Matured'' label was developed to define standards for premium quality fruit harvested and packed at its peak to satisfy customer demands. Working with the Federal and Federal-State Inspection Programs, the Nectarine Administrative Committee and Peach Commodity Committee (committees), which administer the day-to-day operations of the programs, recommended variety-specific size and maturity standards that were incorporated into the regulations.

These standards helped ensure that the industry marketed and shipped the highest quality fruit, which in turn supported increased returns to growers and handlers. A ``utility grade'' was defined to allow for the movement of a certain percentage of lesser quality fruit to markets where it could be sold without undermining the industry's overall marketing goals. Funded through assessments paid by handlers, the committees sponsored production research programs to address grower needs such as pesticide use and development of new fruit varieties. As well, post-harvest handling concerns, such as container and pack configuration, were addressed through committee-funded research.

Assessment funds were also used to fund market research and development projects, promoting California tree fruit in both domestic and international markets. In recent years, changes in the industry led the committees to reduce the number of programs they supported through the orders. Because many customers now establish their own quality standards, the committees felt it was no longer essential to mandate inspection and certification of packed fruit to marketing order standards. During the last few years, only those handlers wishing to use the ``California Well Matured'' label were required to obtain inspection and certification. With the consolidation of many smaller farms, larger companies have undertaken their own research and promotion programs, thus minimizing the desirability of committee-funded generic programs.

Some details about the industry pulled from the final rule.

There are approximately 97 California nectarine and peach handlers subject to regulation under the orders covering nectarines and peaches grown in California, and about 447 growers of these fruits in California.

For the 2010 marketing season, the committees' staff estimated the average grower price received was $5.50 per container or container equivalent for nectarines and peaches.

I think one of the challenges for the industry will to "right-size" its offerings without the benefit of considering the extensive data stream that the marketing orders generated. Another will be continued effective administration of Market Access Program export promotion funds.

But the end is here for the marketing orders, their glory days long forgotten.



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