Have they thought of buying the cannary themselves? It would give them a good range of economic power, owning the production up to the can.
If im reading the article right, it looks like the other major processor in the region (now the last one standing) is already organized as a growers cooperative. They have their own facility, and had the opportunity to buy the Del Monte one but decided against it. The bigger problem seems to be that national demand for canned peaches is declining while simultaneously imported peaches are out competing domestic ones for what market remains. To add insult to injury, the tarrifs on foreign steel have caused can prices to jump.
And this, kids, is why hyperconsolidation is a terrible fucking idea.
I hate to see food go to waste, as much as I hate to see people go hungry.
Yeah but have you seen the line lately??? It’s going up!
Without a buyer for the cannery in Modesto, which employed up to 1,800 people including seasonal workers, the cooperative lacks the capacity to buy, can and market all the fruit soon to grow from the blooming peach orchards.
The last remaining processor, with plants in Lodi and Oroville, has offered one-year contracts to buy fruit from some of the orchards tied to canceled Del Monte contracts, granting a lifeline of sorts to some of the out-of-luck farmers. But the California Canning Peach Association estimated that the processor has offered deals for 24,000 tons of peaches — roughly a third of the 74,000 tons delivered last year to Del Monte — leaving growers to weigh the pros and cons of taking the short-term relief, or whether to rip out their orchards and start over.
“Two thirds of the growers are going to be, basically, just left out to dry,” Johl said.
“They’re the only player left. What are you going to do?” Johl said. “In the peach business, you do what the processor wants you to do. And what variety they want you to grow, you just grow it. You’re growing it for their needs. If they don’t need it — and that’s what we’re faced with now — they just don’t need all these peaches.”
I was thinking that maybe it’d be possible to ship peaches to another cannery — there are other states that grow peaches, and I’m sure that there are canneries that service them — but it looks like:
https://worldpopulationreview.com/state-rankings/peach-production-by-state
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The great bulk of US peach production is done in California.
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Almost all of the other production happens east of the Mississippi, with the exception of a small amount in Colorado. I don’t know how economical it’d be to ship to the other side of the country. Maybe another country. checks Canada also doesn’t do much, and virtually all of that is in Ontario, so any Canadian canneries probably can’t take much either. It does look like Mexico does substantial production, and the Mexican states that apparently specialize in it are Chihuahua and Coahuila, which are comparatively near, so maybe that could be a sink if shipping to Mexican canneries is viable.
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I want to know about the rest of Del Monte. I imagine the corn business is not as bad as a niche like peaches.
Also what good is a 20 year contract with no risk mitigation? Did they really sign such deals without actual recourse if a bankruptcy-induced breach occurred?
