Ontario apple industry goes to mush

MEAFORD, Ont. – As Brian Gilroy drives the rural roads that cut through this rich agricultural area on the edge of Georgian Bay two hours northwest of Toronto, he provides a running commentary on the hundreds of apple orchard acres that have been ripped up in the past decade.

“This was a good orchard but it’s gone,” he says.

“Here was another one. Look, it’s empty.”

He stops at an orchard where trees are being pulled out by the root, a requirement of the local municipality that does not want to see orchards abandoned and left untended.

“We’ve lost 1,500 acres in this area alone in the last few years. It is a symbol of where the apple industry is going,” he says.

“This area produces half of Ontario’s apples and Ontario produces half of Canada’s apples so it is an important region. But with a few exceptions, it’s hard to get new people into the industry or existing growers to expand.”

As an apple politician, Gilroy has worked for three years to try to strengthen growers’ position within the industry. One of the fruits of his labour was the launch this summer of the new Ontario Apple Growers, which negotiates the trend-setting juice price and defends and lobbies for the industry.

But ironically, the organization that he helped create and of which he is vice-chair likely won’t be enough to keep Gilroy in business as a full-time grower.

Instead of following a business plan that would have seen his 50-acre orchard expand to 60 or 80 acres, he is retrenching to 35 acres and trying to find work. Five years after giving up a job to become a full-time farmer, the dream is fading.

“I just don’t see enough prospects in the industry to justify more investment and I’d have to expand to survive.”

It is a familiar story throughout agriculture.

Gilroy wanted to farm and by 1987 he had saved enough money from his job as a counselor for troubled teens to buy an old abandoned apple farm. Some of the trees were 100 years old.

For more than a decade, he invested to upgrade the orchard and the farm while continuing to work off the farm.

By 1999, he was ready to expand and take the plunge into full-time farming. At the time, apple orchards could expect to break even three out of five years, lose money one year and make a substantial profit in the other year to carry them through the five-year cycle.

Gilroy said around the time he took the full-time plunge, the model changed to one good profitable year every decade with losses and break-evens in between.

He also invested up the chain by buying a share in a nearby new generation co-operative that stored and packaged apples.

“I was optimistic. I wanted into the business and I thought there was a future.”

In his first year as a full-time farmer, he had a bumper crop. So did everyone else and prices plunged. It hasn’t gotten much better.

“We lost money and that took a lot of wind out of our sails,” he said.

“I knew things could get bad. I didn’t realize it would stay this bad this long.”

Meanwhile, industry policy also went south.

In 2001, Ontario’s Progressive Conservative government held a vote on the future of the Ontario Apple Marketing Commission, which besides its promotional duties also had the power to negotiate a base price for the industry. The vote showed a divided industry.

While the results fell short of the requirement for dissolving a provincial marketing commission, the government decided to abolish the commission anyway.

“Even people who voted against it were shocked,” Gilroy said.

“They were trying to send a message that the industry was in trouble.”

Apple growers immediately began to work on a replacement. Gilroy was in the thick of it, negotiating the creation of a new organization, spending part of every day talking to growers about the benefits and ultimately becoming vice-chair of the new organization.

Producers with more than 10 acres of apples must pay an annual fee and the new group provides lobbying services, grower education, research funding and promotion.

Producers also sit on a committee with processors to fix an annual apple juice price that acts as a floor for the more lucrative processing and fresh market, much as the skim milk powder support price sets a base in the dairy industry.

Gilroy said the main benefit of the new organization is to give producers a single voice.

“If apple growers are a variety of splinter groups, it is hard to have your voice heard,” he said. “This will give us a voice.”

But it won’t make the economics good enough to allow him a full-time future in apple production. The world is awash in apples from exporters such as China, South Africa, the United States and New Zealand and prices are low.

“To keep in the business I will have to find an off-farm job,” said Gilroy.

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