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Perfect Storm’ of Challenges Strikes Washington Apple Farmers, Sparking Bankruptcies and Consolidation

Economic Strain Forces Small Farms to Close, Fuels Rise of Large Corporate Players

In the rolling hills of Wapato, Washington, the apple industry is grappling with a “perfect storm” of financial pressures that are forcing small orchardists out of business. Amid rising labor costs, stagnating prices, and an oversupply of apples, local farmers say they can no longer sustain the losses, setting off a chain reaction of closures and consolidations. As a result, larger companies, often backed by private equity, are swallowing up vast tracts of land, further reducing the number of small family-run farms in the region.

A Disastrous Convergence of Factors

Washington is home to one of the largest apple industries in the U.S., producing nearly 70% of the country’s apples and contributing about $2 billion annually to the state’s economy. Yet, the forces weighing on local farmers have created an increasingly hostile environment.

The key problem lies in the ongoing oversupply of apples. With advances in farming efficiency, orchards have become more productive, leading to a glut in the market. However, the price paid to farmers has failed to keep pace with these increases in output. On top of this, former President Donald Trump’s 2018 tariffs, which hit international markets, have taken away a significant chunk of exports, further exacerbating the supply-demand imbalance.

For small orchardists who once relied on a steady income from their apple crops, the situation has become untenable. As they struggle to stay afloat, many have no choice but to close shop, unable to withstand years of financial losses.

A Shrinking Landscape

Tim Calhoun, who runs a midsized orchard in the Yakima Basin near Wapato, sees firsthand how the industry has shifted in the past few decades. Growing up on the farm, Calhoun watched as neighboring families left the business, some retiring and others selling their operations due to economic pressures. Now, only a fraction of the family farms remain, as larger players absorb smaller ones.

Calhoun, who oversees a 170-acre operation that spans multiple types of fruit beyond apples, has seen firsthand how the consolidation of farms has led to a shrinking number of independent operators. “On my 1-mile road, when I was a kid, there were probably over 20 different family farms. Now, there are only three,” he said, noting that all of them are owned by different companies.

Washington apple farm Wapato

For farmers like Calhoun, this consolidation is not simply a consequence of natural market forces. Large companies with access to private equity funding are able to weather the bad years and expand their operations, while small farms are being pushed out. “Why the larger companies keep getting larger is because the margins in farming are shrinking every year,” Calhoun explained.

Financial Strain Leads to a Wave of Bankruptcies

The pressure on smaller operations has resulted in an alarming number of bankruptcies. Many farmers, unable to turn a profit from their apple crops, are finding themselves unable to pay off mounting debts. For some, selling their land to larger companies seems like the only option.

According to recent agricultural census data, the situation is already reaching crisis levels. Between 2017 and 2022, 187 Washington apple farms closed their doors. These closures have not only reduced the number of small operations but also contributed to the expansion of large corporate-run farms. The trend is clear: smaller farms are disappearing, and those that remain are becoming larger and more corporate-controlled.

One of the most striking aspects of this shift is the continued growth of orchard size. While the total apple acreage in Washington has expanded, the average size of each farm has also grown. The massive scale required to survive in today’s apple market is simply out of reach for smaller farms, forcing them to either sell or close.

The Role of Private Equity

The role of private equity in driving consolidation is undeniable. Large firms, flush with cash, are increasingly taking over orchards, driving up land prices and making it harder for smaller, family-run operations to compete. This has led to a cycle where small farmers are forced to sell their land to survive, while larger companies continue to expand.

Calhoun’s own farm has been able to expand over time, but even with his efforts to diversify into other fruit crops and distribution, he recognizes that the economic realities of the industry are stacked against smaller operations. With larger farms enjoying economies of scale and access to private equity, it’s become difficult for smaller farms to compete.

“There’s a wave of bankruptcies coming,” Calhoun warns, as more farmers face financial ruin. “The margins are just not there anymore.”

An Uncertain Future for Washington’s Apple Industry

The future of Washington’s apple industry remains uncertain. While large corporate farms continue to grow, the state’s smaller, family-run operations are rapidly disappearing. As the number of independent farms shrinks, the state faces a future where the apple industry could be controlled by a few large corporations with little room left for smaller, more diversified operations.

The “perfect storm” of factors—rising labor costs, tariffs, oversupply, and stagnant prices—continues to bear down on farmers. For those who remain, it’s a question of survival, and for many, the ability to weather the storm may depend on access to outside funding and the size of their operations.

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