Zachary Scott & Co. was pleased to be a silver sponsor for and to attend the 2021 Washington State Tree Fruit Association Annual Meeting & Northwest Hort Expo in Yakima, WA last week. Having worked with numerous clients in the tree fruit industry, the Expo gave us an excellent chance to meet existing friends and to make new acquaintances.
Many industry experts discussed the overall strength of the tree fruit business in Washington, which originates over 70% of the total US production of apples, 65% of the total US production of sweet cherries, and along with Oregon produces 80% of the total US production for Pears. Washington is also a key exporter of these tree fruits to the global markets.
While the long-term outlook presented at the Annual Meeting is favorable, there are certain short-term issues on the front of everyone’s minds – particularly labor and shipping. As with other businesses and industries, Washington tree fruit farmers are feeling the pressure of labor shortages, increasing wage demands and logistical and cost constraints on shipping their products to key markets. In particular, Washington tree fruit farmers utilize a large number of H-2A visa workers and the rapidly escalating costs of hiring and retaining these workers has introduced costs that may not be able to be passed along. In addition, container shortages, congested docks and the continuing tariffs associated with certain foreign countries is affecting export opportunities.
As evidenced by their outsized presence in the rows of presenters at the Expo, a continually growing area of importance for the industry is the large amount of software/hardware solutions for tree fruit growers. Ranging from monitoring labor, soil conditions (including moisture, fertilizer and pesticide content) and remote weather and drone usage, technology has and will continue to play a large role in transforming traditional tree fruit farming.
M&A activity remains strong with institutional investors taking a lead in agricultural investments. While investment themes may vary, the common denominator among these buyers is a desire for “hard” assets with a long-term value proposition.