Sign on the dotted line
Now may be the time to plan your fruit tree plantings for 2010. More nurseries are discontinuing speculation budding in favor of contract growing. So, what is contract growing? It’s the practice of placing an advance order with a nursery. By planning ahead, the grower can be assured of receiving the desired trees at planting time, while the nursery has commitments for the trees it propagates.
“Many growers will order their trees on contract to assure that they get the variety they want on the rootstocks they want, as well as receiving a price break,” said Michael L. Parker, Ph.D. of North Carolina State University’s department of horticultural science. Discounts generally range from five to 10 percent.
Most large nurseries require orders of at least 1,000 trees of a single variety for contracts. However, others may accept contracts for lower quantities. In some instances, a contract may be drawn for a small number of an unusual variety-rootstock combination, although standard pricing may apply. Some will also propagate an antique, heirloom or newly discovered cultivar in small numbers. Of course, all patents, trademarks and similar rights must be honored, along with royalty payments where applicable.
Most nurseries require orders be placed by spring rootstock planting time, although some will extend that to budding time. Often, a “first come, first served” policy applies, so the early birds get the most desirable rootstock.
Nursery experiences with contract growing
From a nursery owner’s point of view, contract growing offers several advantages. The advance orders eliminate the guesswork of how to fulfill customers’ needs in years ahead, as well as the question of what to do with unsold trees.
“Many nurseries, especially those growing apple trees, are encouraging contract-grown trees since the way the system is now, they grow trees based on what they think growers and the market will want in two years and then they have a large fire at the end of each year to discard unwanted and unsold trees,” Parker said.
Tom Callahan, director of sales at Adams County Nursery (www.acnursery.com, 717-677-8105) in Aspers, Pa., says the true cost to nurseries is the trees that are burned at the end of a season. For that reason, his nursery, which produces a diverse selection of fruit trees, made a concerted effort four years ago to move to contract growing.
“It’s hard to rub the crystal ball and know what will be in demand,” he added. “We couldn’t afford to continue that way.”
At that time, overall demand for fruit trees, especially apple, was down, so the firm was faced with changing its way of doing business to survive. Adams County convinced many of its customers to enter into pre-bud contracts by offering discounts and the best quality in exchange for an early commitment, which includes a deposit.
Callahan says it was initially a bit difficult to persuade growers to plan ahead, particularly during the slump in apple demand. In those days, it was difficult for anyone to select marketable fruit varieties. But, as new apple cultivars were introduced and the demand strengthened, it became easier to forecast future needs. Callahan believes that today it is difficult to purchase apple trees without a contractual arrangement.
The system has been a success for Adams County Nursery, which now has contracts for about half of its crop each season. In fact, it has had to decline some contracts, but also makes product available without prior agreement.
“It’s a win-win,” Callahan said. “For growers, it means they have advantages in price, availability and quality.”
There are some difficulties, of course. It can be tricky to establish pricing for trees that will be delivered in two years. In addition, the nursery runs the risk of contract cancellation, but tries to mitigate that problem by requiring deposits on the front end.
In Salem, Ore., Meyer Nursery and Orchards (www.meyernursery.com, 503-364-3076) has had a different experience with contract growing. Chief Financial Officer Juli Meyer says the firm has accepted contracts for 25 years and conducts about 15 to 20 percent of its business with preorders.
“[More] contracts would be ideal, but most people don’t plan that far ahead,” she said. “Many wait to see what’s popular and order then.”
Meyer appreciates that contracts help her plan for both production and sales, and adds that contract customers often purchase other items from the nursery. She says that the arrangement allows growers to obtain the product that is best for their climate and soil type, as well as being a source for specialty items that aren’t typically available.
She suggests that fruit producers choose nurseries for contract growing prudently.
“See how careful they are about [such things as] field preparation or you could end up with poor quality.”
Another contract grower, Moser Fruit Tree Sales, Inc. (www.forfruittrees.com, 800-386-5600) of Coloma, Mich., offers a bit of advice on its Web site that may be the secret to making contract growing successful for both fruit producers and nurseries: communication and timing are key.
The author is a freelance writer based in Greensboro, N.C.
|Fruit Tree Nurseries Offering Contract Growing
Burchell Nursery, Inc.
Columbia Basin Nursery, LLC
Double A Vineyards
Sierra Gold Nurseries
Tree Connection, Inc.
Willow Drive Nursery, Inc.