Cherry producers in New York state and the Great Lakes region don’t have it easy. They face extreme temperatures in the winter, and in the summer, excessive rain can ruin the fruit. But if they can manage to avoid those risks, they stand to cash in: Cherries are one of the most profitable fruit crops, and there’s a growing demand in the Eastern U.S. for locally grown cherries.
Several long-term strategies can mitigate growers’ financial risks, from crop insurance to weather insurance to high tunnels – tall temporary greenhouses that extend up and over the cherry trees and protect them with plastic sheeting or netting.
But not much is known about which strategy offers the biggest bang for the fruit growers’ buck.
New Cornell research offers growers guidance – and potentially significantly higher profits.
Cherry growers looking to mitigate weather risks could double their long-term net return per acre by using high tunnels, according to the study, for two reasons. Trees grown in high tunnels tend to produce bigger fruit, and that fruit matures faster than it would if it were grown in an open field.
That means higher quality cherries available earlier in the season. While other growers are still waiting for their fruit to ripen, growers using high tunnels are already picking and selling cherries at a premium price, the researchers said.
“Growing high-value fruits in a protected environment could be the future for New York growers,” said co-author Bradley Rickard, the Ruth and William Morgan Associate Professor in Applied Economics and Management. “Normally we don’t think of growing fruit crops in a greenhouse. We’re saying it’s definitely possible to do it, and it might even make economic sense to do it.”
Added lead author and doctoral candidate Shuay-Tsyr Ho, M.S. ’12: “We’re thinking of it long term, so you invest and then it pays off after 15 to 20 years. And these tunnels could be applicable to other high-value fruit crops that also have significant weather risk.”
The study, “Alternative Strategies to Manage Weather Risk in Perennial Fruit Crop Production,” is published online in Agricultural and Resources Economics Review. Ho and Rickard’s co-authors are Jennifer Ifft, assistant professor of applied economics and management, and Calum Turvey, the W.I. Myers Professor of Agricultural Finance. All the authors are in the Dyson School of Applied Economics and Management.
The study looked specifically at sweet cherries and how growers can most cost-effectively deal with excess summer rains, which can crack cherries by splitting the skin open. Two mechanisms are at play, Ho said: Rain drops hit the fruit’s skin and split it, and the roots soak up so much water that the skin cracks.
“Then for food safety reasons and cosmetic reasons, that cherry will no longer be marketable” Rickard said. “In New York state, there have been cases where growers lost the whole crop due to cracking.”
In the study, the researchers developed a framework to evaluate three risk management strategies – high tunnels, crop insurance and weather insurance – for small- to medium-sized fruit crop growers in the Eastern United States.
For each strategy, they came up with an annual net per acre return over a 20-year period. They did this by creating a simulation model using historical data from the past 20 years in New York state and Michigan on weather patterns, frost, temperatures, yields, costs and market prices. They crunched these numbers with various levels of coverage of both types of insurance, and different levels of price premiums for the tunnel strategy.
The study found the high tunnels strategy has the capacity to double the long-term net return per acre, assuming the market would pay a higher price for earlier, high-quality fruit. High tunnels work well because they are covered in plastic sheeting or netting that can be removed or partially rolled up, so the grower can better control temperature, sunlight, moisture and pests. The research team also found both crop insurance and weather insurance performed better than no strategy at all.
The framework in the study could be used to assess similar questions for other perennial specialty crops – such as apricots, plums and grapes – in humid continental climate regions where producers have the option to invest in alternative production technologies and buy insurance, the researchers said.
The study was supported by the U.S. Department of Agriculture.