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Originally published:

SEPTEMBER 2024
Vol. 110 Issue 9

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Stories In This Edition

Bottom of the bin

BC Tree Fruits for sale

Creditors a cross-section of industry

Ambrosia council winds down

Editorial: Core decisions

Back 40: It’s about time things were simple again

Viewpoint: When co-ops fail, don’t blame the concept

Co-op closure leaves growers in the lurch

Dairy industry revamps WMP initiative

Ag Briefs: Site C reservoir begins flooding farmland

Ag Briefs: Dairy NEP picks announced

Ag Briefs: Former MP Chuck Strahl dies

Ag Briefs: Pender Island FI honoured

Letters: BC Tree Fruits is a loss for all of us

In passing: Orchardists death marks the end of an era

Ag advisory committee in jeopardy

Fairs group holds the line against cash flow crunch

The low-down on phosphorus management

Sidebar: AEM Code phases in nutrient plans

Grower optimism encouraged at annual field day

Richard Cleave receives top honour

Variety a reward that works for large animal vets

Ranchers to benefit from handheld water testers

Feed available but stocks low as drought continues

Tsqescen First Nations aim to grow food security

Efficiency is king as drought levels rise across BC

Farm Story: Farm succession begins with the harvester

Courses delivery affordable ag education

Gulf Island entrepreneurs eye food security

Creston Valley crop losses hit local food hard

PNE is a family affair for 4-H members

Woodshed: Delta prepares to take Kenneth for a ride

Okanagan berry venture is a family affair

Jude’s Kitchen: Feeding fall’s new beginnings

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2 weeks ago

Canada's mushroom growers will have to post countervailing duties next week following a US Department of Commerce determination that Canada's tax regime effectively subsidized growers, allowing them to cause "material injury" to US growers through their exports. Canada is a major exporter of mushrooms to the US, with the countries effectively operating as a single value chain thanks in part to one of the largest mushroom producers, South Mill Champs, headquartered in Pennsylvania.

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Canadas mushroom growers will have to post countervailing duties next week following a US Department of Commerce determination that Canadas tax regime effectively subsidized growers, allowing them to cause material injury to US growers through their exports. Canada is a major exporter of mushrooms to the US, with the countries effectively operating as a single value chain thanks in part to one of the largest mushroom producers, South Mill Champs, headquartered in Pennsylvania.

#BCAg
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2 weeks ago

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2 weeks ago

The Jura Ranch near Princeton sold for nearly $5.3 million on May 12, the largest online ranch sale in BC in months, according to CLHBid.com, which handled the sale. The buyer was not named. Formerly owned by Rob and Kelly Lamoureux, which developed the successful Jura Grassfed brand, the ranch includes 2,625 deeded acres and a grazing licence totalling 83,698 acres. Originally offered at $4.2 million, the competitive bidding process delivered a higher value than the current market would suggest. Farm Credit Canada’s latest farmland value survey pointed to 1.7% decline in BC last year, which observers have attributed to tight margins and uncertainties related to Crown tenure.

#BCAg
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The Jura Ranch near Princeton sold for nearly $5.3 million on May 12, the largest online ranch sale in BC in months, according to CLHBid.com, which handled the sale. The buyer was not named. Formerly owned by Rob and Kelly Lamoureux, which developed the successful Jura Grassfed brand, the ranch includes 2,625 deeded acres and a grazing licence totalling 83,698 acres. Originally offered at $4.2 million, the competitive bidding process delivered a higher value than the current market would suggest. Farm Credit Canada’s latest farmland value survey pointed to 1.7% decline in BC last year, which observers have attributed to tight margins and uncertainties related to Crown tenure.

#BCAg
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I sure hope it remains as farm land rather than a wind or solar installation.

Great grassland

yeah, who bought it? where are the checks and balances that ensure a ranch can continue being a ranch?

Uncertainty about crown land, aka native land grabs and unceded land claims being tossed around like it wasn't meant to destabilize the country?

2 weeks ago

American businessmen have quietly accumulated nearly 4,000 acres of farmland in the Robson Valley community of Dunster, sparking calls for restrictions on foreign and corporate agricultural land ownership in BC. Residents say the buy-up has driven population decline and priced out young farmers. MLAs from both parties and a UNBC professor are pointing to Quebec's new farmland protection legislation as a model BC should follo#BCAg#BCAg ... See MoreSee Less

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Foreign land buyers hollow out Dunster

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DUNSTER – Purchases of swathes of farmland in the Robson Valley by wealthy American businessmen have some in BC demanding restrictions on foreign and corporate ownership of agricultural land.
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This is a serious issue in Dunster and one that has impacts for wildlife and human neighbours.

2 weeks ago

Representatives from Quail's Gate Winery Estate Winery in West Kelowna were panellists during the Okanagan Cultivates event held at Okanagan College's Kelowna campus on May 7. The college has been hosting events like this to help elevate conversations in the community about what's grown locally and its impact on the region's food, wine and tourism industry. The Quail's Gate panel, which included Ben Stewart, discussed the long history of grape growing and winemaking in front of a large crowd who came to listen, learn and taste products from a number of local wineries and restaurants. A new $48.8M food, wine and tourism centre is now under construction at the college to open in fall 2027. The building will have modern food labs, a student-led restaurant and café and specialized training spaces for culinary, viticultu#BCAgd tourism studies.

#BCAg
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Representatives from Quails Gate Winery Estate Winery in West Kelowna were panellists during the Okanagan Cultivates event held at Okanagan Colleges Kelowna campus on May 7. The college has been hosting events like this to help elevate conversations in the community about whats grown locally and its impact on the regions food, wine and tourism industry. The Quails Gate panel, which included Ben Stewart, discussed the long history of grape growing and winemaking in front of a large crowd who came to listen, learn and taste products from a number of local wineries and restaurants. A new $48.8M food, wine and tourism centre is now under construction at the college to open in fall 2027. The building will have modern food labs, a student-led restaurant and café and specialized training spaces for culinary, viticulture and tourism studies.

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Co-op closure leaves growers in the lurch

Business failure had many causes over many years

Top quality fruit can command top prices but pooling diluted grower returns. | MYRNA STARK LEADER

September 11, 2024 byTom Walker

OLIVER – On July 3, Osoyoos cherry grower Ranjit Dhillon delivered the last of his cherries to the BC Tree Fruits Co-op in Oliver.

“We were really optimistic; it was our best year yet,” Dhillon says. “We did not suffer any winter damage; we had a full crop. We shipped 108,800 lbs of cherries total.”

Three weeks later, on July 26, the co-op told Dhillon and other growers it was shutting down, leaving the fate of his fruit as well as compensation in doubt.

Cherries are perishable and although Dhillon knows that his fruit was processed, packed and sold, he doesn’t know if he’ll get paid the $220,119 court documents indicate is owing to him.

Costs to manage the crop, including fuel, sprays, pruning and picking have cost him around $50,000.

“I have a packout slip from the co-op, but I have not been paid and I really don’t know if I will ever be paid,” he says, noting he feels “hopeless.”

The co-op has told growers that CIBC, the largest of the co-op’s 11 secured creditors, will be paid first, then other creditors and finally the

co-op’s member growers.

Court filings indicate growers were owed

$4.8 million as of August 13.

“That doesn’t seem right,” says Dhillon. “The growers who grew the fruit, they should be paid first. The banks are already rich.”

Dhillon’s story is just one of many that are the result of the closure of the largest tree fruit packinghouse in the province.

The shuttering didn’t surprise anyone involved in the industry, but it is a story of many parts and no one solution.

It’s hard to say which came first — lower prices and returns for members leading to a lower quality of fruit, or lower quality fruit leading to poor returns. The average pool return for growers has been dropping steadily since 2018, with figures between 2019 to 2023 ranging from a high of 20.97 cents a pound to a low of 13.23 cents a pound. With an average cost of production across the industry of around 35 cents a pound, those returns are hardly enough to sustain growers.

With less money coming in and the cost of inputs going up, some growers cut back on sprays and thinning routines and that in turn led to a cycle of poorer quality fruit.

While co-op rules allow for poor quality fruit to be turned away, it seldom happened. The co-op effectively became the buyer of last resort for growers.

Heat events over the last several years have also impacted apple quality.

Apple trees do not thrive at temperatures above 35° C. Sunburn damage to fruit increases, apples fail to colour up and the fruit is more susceptible to decay in long-term storage.

Heat stress causes photosynthesis to shut down, leading to reduced yields of smaller, poor quality fruit. While apples do better than other tree fruits in the severe cold, they were also impacted by the extreme cold events in December 2022 and January 2024.

Even the best growers can’t escape Mother Nature. Blocks that used to produce 60 bins an acre are now only yielding 40, adding to the hard math growers are facing.

Ambrosia apples have been a success story for the BC industry, and acreage has grown rapidly in the last 10 years, helped by successful replant programs and the expiry in 2017 of the 20-year patent that limited production.

A marketing plan to increase domestic consumption and expand foreign markets for the variety was recommended by the province’s three-year-old tree fruit stabilization initiative, but none has materialized.

Poor returns led a number of the co-op’s top growers to transfer their business to the dozens of independent packinghouses that were cropping up. The past four years have seen co-op membership drop from 400 growers representing about 55% of the industry and 40% of the volume to just 176 voting members.

The departure of those growers eroded the average return to all members, as less top-quality fruit was being sold at a higher price and less fruit overall to cover operating costs.

Some member growers have also practiced high-grading, taking high-quality fruit, either from their first pick or bins from a more productive part of their orchard, and selling it directly to markets in the Lower Mainland. While limited independent sales were allowed in growers’ contracts, the

co-op wasn’t strict about enforcement.

Poor quality is a losing proposition for any business, and particularly one dealing in perishable products.

A small apple with a blemish must still be run through the line, scanned by the optical sorter and graded, but the system will handle a larger volume to fill a three-pound bag than if top-quality fruit was being processed.

While growers were charged a penalty for cull fruit, it fell short of the overhead costs incurred by less productive equipment, not to mention the cost of disposing of poor-quality fruit.

The cash flow issues were set to intensify this year, as poor weather eliminated the peaches and nectarines that generate early-season revenue. A significant drop in the cherry crop put a further damper on cash flows.

But the final nail in the co-op’s coffin came when a number of growers withheld estimates for the volume of apples they expected to deliver. Without reliable estimates of what the co-op could expect to market, it made the only reasonable decision based on the information it had and opted to shut down.

Ironically, the co-op’s failure came down to a lack of co-operation.

A north-south split, highlighted by opposition to the co-op’s decision to consolidate packing operations in Oliver, is the most obvious.

Many growers in the North Okanagan, where the majority of apple acreage lies, objected to the move despite the business case that exists for it.

Cultural and religious divisions among Indo-Canadian growers have also eroded the co-operative spirit, animating discussions at board meetings. A provincially funded governance study in 2020 concluded, “The board and membership is factionalized, often driven by personal agendas rather than business decisions.”

The divisions played out openly in two special general meetings members forced in November 2022 and February 2024. While the meetings failed to unseat the elected board, they eroded confidence in a business that has seen its revenues drop from $165 million in 2008 to less than $56 million today.

The path forward for growers is unclear.

The province says a majority of co-op members have found alternative packing houses for this fall’s harvest. But finding enough storage space – particularly controlled atmosphere storage – to replace the large facilities the co-op operated will be difficult. Packers are currently contracting with packinghouses across the border in Washington for the space they need.

While the province has pledged to protect critical infrastructure, it has stopped short of saying it will buy assets on behalf of growers. Much depends on how the court-ordered restructuring process plays out.

The co-op’s demise is a major blow to the industry, but corporate bail-outs are a thing of the past. The replant program the government launched as part of a historic investment in food security last year is of little use if growers have nowhere to sell their crop.

But if there’s any good news in the co-op’s demise, it’s that the industry as a whole is far from dead.

Many growers continue to operate successful businesses and grow top-quality fruit. Just like a fruitful tree, the co-op’s demise may be the pruning the industry needs.

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