For decades, many California fruit growers operated under long-term agreements that offered stability in an unpredictable industry. Now, the bankruptcy of Del Monte Foods is exposing the risks of that system—leaving some farmers facing steep losses before they’ve even broken even.
Long-term investments now at risk
Cling peaches, pears, and apricots aren’t quick-turn crops. Orchards often require significant upfront investment—including land preparation, trees, irrigation systems, and years of maintenance before reaching full production.
To justify those costs, many growers entered into contracts lasting 15 to 20 years with processors like Del Monte, ensuring a consistent buyer once the orchards matured.
Now, with processing capacity suddenly disappearing, those long-term agreements have effectively unraveled—leaving farmers with investments tied to crops that may no longer have a viable market.
Not yet recouped, already losing
For some growers, the timing couldn’t be worse. Orchards planted within the last decade may still be in the process of paying off initial costs, meaning farmers haven’t yet recovered their investment.
Without a buyer at contracted prices, growers may be forced to:
- Sell fruit at steep discounts
- Leave crops unharvested
- Remove orchards entirely
In some cases, the financial hit could stretch into the millions per farm, especially for larger operations.
A system built on stability, now shaken
The processing model relied on predictability. Farmers planted crops based on long-term demand from a small number of large buyers. That system worked—until one of the biggest players exited.
With limited alternative processors available, growers can’t easily pivot. Unlike row crops, orchards represent a multi-decade commitment, not something that can be quickly replanted or redirected.
Do farmers have any recourse?
Even farmers with long-term contracts are not guaranteed payment when a company like Del Monte Foods files for bankruptcy. The company can legally cancel those agreements, leaving growers to file claims as unsecured creditors—often resulting in delayed or partial payments, if any at all.
While farmers may try to recover losses for delivered crops or lost future income, payouts are typically limited, and most insurance policies don’t cover the loss of a buyer. As a result, many growers are left absorbing significant financial losses despite having contracts in place.
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