Domestic peach acreage to drop to lowest level in decades

FRESNO, Calif. (AP)--Canned peaches have been a cafeteria mainstay and part of the Central Valley's economy for decades. But with the market in the pits, government officials are paying farmers to tear down some of their trees.

California farmers grow about 85 percent of the peaches that end up in a can in the United States, but demand has been falling as consumers buy more fresh fruit and cheaper imports from places such as Greece and China cut into the state's share of the market.

The glut has led the U.S. Department of Agriculture to offer $7 million to California growers who agree to cut their trees and promise not to plant peaches for the next 10 years.

This isn't the first time the USDA is helping struggling peach farmers. The agency regularly buys surplus canned peaches to supply government-funded institutions, making them a staple in school cafeterias, senior citizen centers and disaster relief programs. Last year, the USDA spent more than $26 million on the syrupy fruit.

It's also not the first time farmers have been offered money to tear out their peach trees. The California Canning Peach Association paid growers to cut down orchards four times over the past 20 years. But the effort failed when other farmers planted more orchards. There are more acres devoted to the fruit now than there have been in a decade, according to the association.

And American consumers are eating more imported peaches than ever. According to Rich Hudgins, president of the canning association, the share of imported canned peaches has nearly doubled in the past decade, with foreign peaches now accounting for about 11 percent of the domestic market.

"The scope of the problem was just too big for us to handle," Hudgins said, explaining the government's decision to step in.

By the time the new harvest begins in June, growers will have removed more than 4,000 acres of orchards, bringing total canning peach acreage down to 26,250--the lowest in 50 years, according to the association.

About a quarter of the state's canning peach farmers applied for the government's offer of up to $1,700 per acre of trees destroyed.

Some farmers see the offer as a way out of an industry that is increasingly unprofitable.

"The risk just outweighs the rewards, unfortunately," said Ron Martella, a third-generation Merced County farmer, who is using the program to rip out about 350 acres. Martella, 61, plans to plant almond and walnut trees on his land.

It used to be hard to get a peach in the winter. People who wanted fruit year-round had to do their own canning. Eventually, plucking a can off the shelf at the local grocery store made it easier. But the global market has changed that.

"We can bring in fresh fruit from other countries or other parts of this country," said Harry Andris, an adviser who researches tree fruit for the University of California's cooperative extension program in Fresno County. "You can get fresh peaches year-round."

With the greater availability of fresh fruit, the demand for canned peaches has fallen. Retail sales for canned peaches in the United States declined from $59.9 million in 2001 to about $53.7 million in 2005, according to the Food Institute, a nonprofit that tracks different food industries.

"When you put it all together, nobody here's making any money," said Andris, the researcher.

Still, the program is bittersweet for some farmers.

"Peaches supported us for many, many years," Martella said. "But it just came to a point when I'd wake up with nightmares that we weren't going to make it."