Cultivar Development for Managed Production

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Cultivar Development for Managed Production

• Dave OMalley
• Jose Chaparro
• Dept. Horticultural Sciences
• University of Florida

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Subtropical Peaches an alternative crop for
Florida

• What is an alternative crop?
• A crop that has not previously been produced at a
  commercial scale in a region, but that could
  provide a new market opportunity for growers
• Blueberries were an alternative crop for Florida
  only 10 years ago
• Before that, blueberries could not be produced in
  Florida because warm winter temperatures did not
  provide enough chill hours to enable existing
  cultivars to flower and leaf out in spring
• A 50 year breeding effort at the University of
  Florida succeeded in developing low chill
  cultivars adapted to central Florida
• From 1999 to 2005, Florida blueberry acreage
  expanded from 1200 to 2400 acres and sales
  increased from 7 to 35 million
• Subtropical peach cultivars have been developed
  by UF that enable commercial production in
  central Florida
• A good opportunity exists for profitable peach
  production in subtropical Florida
• New growers will encounter many new challenges,
  problems to be solved
• Estimates of yield, production costs, and prices
  pretty speculative
• Commercial production requires development of
  many new peach cultivars
• Different from blueberries
• Long term and expensive to breed fruit trees,
  economics similar to pharmaceuticals!
• How much does it cost to develop a cultivar?

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Why subtropical peaches?
April-May market window North American
stonefruit supply and quality are low and
prices are 2 to 3 times higher than midseason
Figure 2. California fresh peach and nectarine
volume and prices during 2002. (volume from CTFA,
2003, prices from Charles Allen Market Review
reports) (Bacon 2005)
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Subtropical Florida Peaches

• Retail grocery chains use global supply chains to
  provide produce year round, want to drive
  seasonality out of produce departments
• Peaches have a single skip in availability during
  April
• Peach fruit development typically requires 90
  days or longer, so trees must flower in January
  for April harvest, or have a shorted FDP
• Chilean peach harvest ends in February, stored
  fruit run out in March
• California harvest from SJV begins in May but
  early fruit have low quality
• 3 regions could compete for April market window
  Coachella Valley, Mexican Highlands, subtropical
  Florida
• Florida early peach market window
• Peaches that flower in January take 80 90 days
  to produce a mature fruit for harvest in April
• A 90 day UF peach marketed in April has higher
  quality than an early California peach in May
• Breeding objective to shorten FDP

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How many peach cultivars are needed for
subtropical Florida?

• Marketing fresh produce
• Suppliers preferred by retail grocery chains can
  fulfill contracts for fruit to fill all the bins
  in a category like stonefruit for a significant
  part of the season
• Florida season ends in early June when we start
  getting lots of rain
• 4 major bins Traditional acidity yellow flesh
  and subacid white flesh peaches and nectarines
• Driven by marketing strategy of CTFA to market
  Summerwhite fruit
• A peach cultivar is harvested for 7 10 days, so
  a cultivar series is needed for each kind of
  stonefruit
• So 6 or 7 cultivars in a series are needed for an
  8 10 week season
• Horticultural treatments could extend harvest by
  about a week
• Protected ag is another option
• The key breeding objective to support the
  development of a Florida peach industry four
  subtropical peach/nectarine series
• Currently we have only 5 subtropical cultivars,
  including 4 with obsolete melting flesh
• Thirteen cultivars are available for Gainesville
  area, including some with nonmelting flesh
• New funds required to begin work on this new
  objective

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New Jersey peach series example
What other traits are important?
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Consumer peach purchase decisions
Sterling Rice Group for the PPN Network 2005
National Eating Trend NPD Analysis, 2005.
http//www.eatcaliforniafruit.com/ppn/retailers-wh
olesalers/pdf/KeyFindings_Final.pdf
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Consumer peach purchases Firmness
6-8 lbs resistance by penetrometer
Sterling Rice Group for the PPN Network 2005
National Eating Trend NPD Analysis, 2005.
http//www.eatcaliforniafruit.com/ppn/retailers-wh
olesalers/pdf/KeyFindings_Final.pdf
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Consumer peach purchases Size
Tennis ball diameter is 2.5 inches (64
mm) Corresponds with 72 count 2 layer tray
pack box (18 lbs, 0.25 lb _at_) Size is determined
by genetics and by crop load, greatly affected
by thinning and pruning Midseason prices for
72s from California are very low
Consumers are satisfied with several different
sizes of peaches Some marketing promotions use
displays With bins for large and for small fruit
(preferred by children and elderly) Although
CTFA got a large and small California PLU
assigned growers would only admit that 5 of crop
was small!
Sterling Rice Group for the PPN Network 2005
National Eating Trend NPD Analysis, 2005.
http//www.eatcaliforniafruit.com/ppn/retailers-wh
olesalers/pdf/KeyFindings_Final.pdf
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Consumer nectarine purchases Color
Red blush on yellow ground color depends on
exposure to sun and varies
Peaches are sorted by hand so blush w/in a box
is uniform
Sterling Rice Group for the PPN Network 2005
National Eating Trend NPD Analysis, 2005.
http//www.eatcaliforniafruit.com/ppn/retailers-wh
olesalers/pdf/KeyFindings_Final.pdf
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Photos from Lanes Packing, Georgia (2,000 acres)

• Protocol for commodity peaches
  in California
• Harvest when ground color begins to change from
  green to yellow
• Firmness 14 16 lbs resistance by penetrometer
• Pick into 400 lb bins, dump onto mechanized
  packing lines
• After cleaning, sorting, packing, hold at 59
  71? F for 24 to 48 hrs until firmness decreases
  to 6-8 lbs, then forced air cool to
  shipment and storage, display at POS at room temp
• Chilling injury (IBD internal breakdown) causes
  mealiness, best avoided by keeping fruit
  and not refrigerating fruit at POS

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Ranch-pack Peaches vs. Commodity peaches

• Wealthier people dont buy more food, they buy
  better food (demand is inelastic)
• True tree-ripe peaches are picked at 6 8 lbs
  resistance
• Sweeter, more aroma, because riper than commodity
  fruit
• Picked into bucket only 2 4 layers deep,
  require CAREFUL handling, hand packed on site
  then forced air chilled for shipping
• Non melting flesh improved firmness fruit hang
  a week or more longer on tree, get riper, sweeter
• Higher prices but larger bill for labor
• Expensive for consumers, but growers compete for
  increasing per capita discretionary

• Commodity peach producers in California only get
  about 0.12 per retail dollar!
• Georgia growers get about 3x that but the big
  southeast producers who survived 80 reduction in
  industry since 1980s are savvy marketers
• Commodity producers compete for the declining 11
  per capita consumer spent on food

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Recap

• We need series of cultivars for several kinds of
  peaches to fill the bins in retail grocery stores
  for the whole Florida season April-early June
• Several traits are important for retail sales,
  especially firmness
• The UF cultivars have not been selected for
  commodity production, better suited for high
  quality ranch-pack approach
• Now, how to proceed with subtropical cultivar
  series development

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Patented cultivars

• What is a patent?
• A patent is a property right granted by the U.S.
  government to the inventor of new method, form of
  matter, or variety of plant that excludes others
  from using the invention for a period of 20 years
  without permission
• Plant patents are granted for asexually produced
  cultivars
• Employees of universities, the government, and
  companies usually sign over their patent rights
  to the employer
• As part of a larger business strategy,
  intellectual property rewards and encourages
  innovation, development of new technology
• Big issues in international trade talks with
  China and music or movies DVDs, for example
• With global trade barriers lowering, it is
  becoming more difficult for US commodity
  producers to compete on the basis of production
  efficiency
• Intellectual property developed by UF breeders is
  owned and managed by UF
• UF licenses companies to produce patented
  cultivars in exchange for royalties to are paid
  back to UF and the inventor

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Variety clubs and managed production

• Innovative approach to fruit breeding and
  production by apple researchers and producers in
  New Zealand and being adopted now in US
• New apple cultivars are developed by
  HortResearch, then EXCLUSIVELY licensed to a
  company that will manage the cultivar to ensure
  that NZ growers get a good return from the
  research investment and that funds are returned
  to NZ to help support breeding
• UMN has exclusively licensed Peppin Heights
  Orchard to manage their new apple cultivar 1914
  as a variety club

Jazz apple cultivar
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Example Jazz and Pacific Rose Apple cultivars

• Developed by HortResearch from a cross of
  Braeburn and Gala, patented in NZ
• Exclusively licensed to Oppenheimer Group in the
  US
• Growers apply to grow the new cultivar
• Sign contracts to rent trees
• Upfront costs for growers to join the club are
  12,000-14,000 per acre
• Quality requirements for fruit, not every grower
  can produce the new cultivars with high quality
• All marketing through the company that manages
  the club
• Marketing
• Production is limited to balance supply and
  demand to keep prices high
• 3 million boxes produced in NZ, and 1.5 million
  each in France and in Washington
• 2/lb in Publix for Pacific Rose
• More profitable for growers
• 50 per box for these apples vs. 10 per box for
  commodity red delicious
• Branding
• SOME consumers willing to pay more for high
  quality fruit

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Subtropical Florida peach cultivar series
research project

• Invitation to negotiate process begins in May
• Opportunity for a company to be granted exclusive
  licenses for all new subtropical peach cultivars
  in exchange for 2.5 million in support of series
  breeding research over the next 10 years
• Exclusive licensing is needed to encourage the
  rapid development of the peach cultivars needed
  for a subtropical Florida peach industry
• The project will enable UF to begin larger scale
  effort to breed subtropical peaches
• Greenhouse facilities in Gainesville
• Field tests at two sites in subtropical Florida
• Selection for early ripening requires tissue
  culture to rescue immature embryo

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Subtropical Peaches

• Pace of economic change is VERY fast now
• If Florida does not invest in subtropical peaches
  soon, the opportunity will be lost to either the
  Coachella Valley in California or to Mexico
• What ever region can begin production first will
  be rewarded initially with high prices while
  learning to grow peaches, and when prices drop,
  the lower prices will be a barrier to entry for
  the other regions
• UF has accomplished the breakthrough in breeding
  commercial quality subtropical peaches for
  Florida, and private investment could leverage
  that research to benefit Florida growers

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Local Marketing of PeachesNew Jersey vs. Florida

• NJ is ranked 4th in peach production
• NJs 150 growers produce peaches on 8,000 acres
• Jersey Fresh program emphasizes freshness of NJ
  produce, a day from tree to market
• California produce is shipped at cost of 6
  thousand per truck load, requiring 3 day trip
  across country to get to eastern markets (2004
  cost)
• Difficult recently to get NJ peaches into retail
  supermarket chains due to competition w
  Californias preferred suppliers
• Marketing not coordinated enough to counter the
  competition from California

44 million consumers w/in 250 mi New Jersey
14 million consumers w/in 250 mi Orlando
2002 U.S. population density map, deep
red counties have density greater than 250/sq. mi
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Variety clubs and managed production