A situation like this bring out many comments that reveal a very low understanding of basic economics (and a low rate of reading the article).
Del Monte went out of business because there wasn't enough demand for the peaches. The company that purchased their assets is continuing to buy 24,000 tons of peaches, but the previous unsustainable business was buying a lot more. It's the excess fields that need to be repurposed to growing something that the market will absorb.
The reason the trees are being destroyed is so they can grow something else on the land. Something that comes with a sustainable business model for the current market demands. Yes, the trees are technically going to waste, but if we had forced the peaches to be grown and canned (as many comments are suggesting) then that would be a different kind of waste as they'd sit in warehouses while the land, resources, and labor were used to produce something people weren't buying instead of being used to produce foods they were buying.
In the article you can even see that the farm lobby was so powerful that they got the USDA to pay for the tree removal. The comments talking about farmers not being organized enough or powerful enough must be unaware of how powerful the farm lobby is and how much money they're able to secure from the government every year.
> Del Monte went out of business because there wasn't enough demand for the peaches.
Things are often more complicated than that. Del Monte was founded a long time ago and fruit trees take a long time to grow. As a result, as the originator of those trees, you're at a disadvantage because you have to pay for many years of maintenance and interest on capital before the trees bear fruit, and are then sitting on a load of debt from the unproductive years that you can't service if the market price is low after the trees are producing.
But bankruptcy (or new ownership) clears the old debt, and then you're left with a productive asset that might not have been worth the cost to create at current prices, but could easily be worth the cost to continue using now that growing the trees is a sunk cost, which requires a much lower market price to be sustainable.
> In the article you can even see that the farm lobby was so powerful that they got the USDA to pay for the tree removal.
That sounds a lot like a cartel acting through regulatory capture to limit supply.
Like if destroying the trees to grow something else was more profitable than continuing to sell the produce then why does it require a government subsidy?
> Like if destroying the trees to grow something else was more profitable than continuing to sell the produce then why does it require a government subsidy?
Because why pay for something when you can get someone else to pay for it?
"The industry has captured the government and is doing a corruption" is the thing consistent with the theory. The non-corruption/capture reason for the government to pay for it is supposed to be what?
An ideal solution, but not what is happening.
It seems like all you're doing is agreeing that there is no plausible non-corrupt reason to do that.
The problem is not that the government is helping the problem is that private capital is getting the benefits instead of all the citizens. I think Americans have after decades of propaganda are stuck with government bad narrative as both parties are captured by capitalist that won't allow the their bought politicians to do anything for citizens. Mamdani in NY will be an interesting case study in the future.
> The problem is not that the government is helping the problem is that private capital is getting the benefits instead of all the citizens.
The government is giving them money -- to do something stupid. There is no apparent non-corrupt reason to do that. It wouldn't be better if the government was also offering ordinary people cash money to destroy productive fruit trees.
Whereas if the government was to help "all of the citizens" then they would all be getting the money and not have to do something stupid in order to get it. But the thing that looks like is either just lowering their taxes to begin with, or doing a UBI if the point of it is redistribution. In neither case is paying anyone to do economically inefficient nonsense a good policy.
> Like if destroying the trees to grow something else was more profitable than continuing to sell the produce then why does it require a government subsidy?
Del Monte didn’t grow peaches, they contracted with farmers (long term, 20 year contracts) who grew peaches and then Del Monte canned the peaches. Del Monte was purchased with an LBO that loaded their books with debt.
Del Monte blew up and left farmers holding the bag. Paying the farmers to convert their land to grow something else prevents fire sales of the existing land.
Considering the market that Del Monte made for canned peaches, someone was going to grow peaches for them. The farmers may have mismanaged their risk, but I’m fine with compensating farmers that end up with worthless trees because of a leveraged buyout. If these farmers were forced to sell their land, some giant ag business would end up with the land.
> Paying the farmers to convert their land to grow something else prevents fire sales of the existing land.
There is no fire sale of land. There is enormous demand for land, especially productive agricultural land which is essentially traded as a fungible commodity.
> The farmers may have mismanaged their risk, but I’m fine with compensating farmers that end up with worthless trees because of a leveraged buyout.
Even then, why are you paying them to destroy productive trees instead of e.g. buying their peaches and donating them to food pantries or stocking the cafeterias at government facilities?
> If these farmers were forced to sell their land, some giant ag business would end up with the land.
That's just cynical speculation. If they sell the land it goes to anyone who wants to buy it. You're also assuming that the ones getting the money aren't already some giant ag business.
> if we had forced the peaches to be grown and canned (as many comments are suggesting) then that would be a different kind of waste as they'd sit in warehouses while the land, resources, and labor were used to produce something people weren't buying instead of being used to produce foods they were buying.
Worse, the price would have to be lowered to bring up sales, which could put the other peach farmers into bankruptcy as well.
If you try to force production and sale hard enough, the sale price can even go negative.
If your warehouse is full of peaches nobody wants, you might be forced to sell them for negative dollars to take them away. It's either that, or you pay to have the waste management company dispose of them. So the price effectively goes negative from trying too hard to force something to happen.
If you turn all them peaches into high proof alcohol they take up significantly less space...
Similarly, in 1790s America, farmers west of the Appalachians were growing plenty of corn, but because of bad roads the only feasible way to transport it to the much larger markets east of the mountains was as whiskey. When Alexander Hamilton imposed a tax on distilled spirits, the result was a "Whiskey Rebellion" in which George Washington himself rode out at the head of an army against other American citizens.
This type of trivia is why I found Bill Bryson’s “At Home” so entertaining. Tariff on windows? People cover them with bricks. Tariff on glass? Windows made of other materials. Tariff on… well, maybe stop designing tariffs if you can’t predict the outcome!
Or Reason's Great Moments in Unintended Consequences series: https://youtube.com/playlist?list=PLBuns9Evn1w9XhnH7vVh_7C65...
There’s more than enough ethanol inputs already, corn.
Internal combustion engines may not have tastebuds, but I do.
The price of oil going below zero during the pandemic was one of the most astounding economic events in my life. I wonder if anybody did try to instantly create some storage to take advantage of it.
Super-contango
>Worse, the price would have to be lowered to bring up sales, which could put the other peach farmers into bankruptcy as well.
We run into something similar every year here in India. One recent example [1] This year it is the Middle East crisis. Last year it was probably a glut because there was shortage the year previously.
[1] https://www.ndtv.com/india-news/video-offered-rs-4-per-kg-ma...
Oh no. Lower costs for consumers? Oh the humanity!
Yes, lower prices for a while, then very high prices and little availability for a long time. Think ahead.
Or just permanently lower prices because the previous prices were artificially high.
A glut is not permanent.
As for artificially high, when was the last time you heard someone complain about those awful, expensive canned peaches?
The big thing I fear about this sort of destruction is that it takes a very long time for tree bearing fruit to start turning a profit. That means someone that wants to plant new trees needs to do so with the notion that they won't get any sort of return on investment for a decade.
My fear is that institutional farming does not have the long term fortitude to ever start growing a tree bearing crop. Once these trees are destroyed, they are gone for good regardless how the demand shifts.
A downturn of 2 or 3 years or crazy political maneuvers which kill off exports puts access to these fruit in jeopardy. And once they are out of the diet, it's very hard to get them reintroduced. That's a big part of the reason why the US has such a limited fruit diet in the first place (the other being that many fruits are very hard to ship).
It's so weird for you to be fearful of something when you don't know how farming works. Every year farmers cut down a bunch of trees and plant new ones in response to costs and market demand. So what. This is routine and seldom makes the news.
Canned fruit, like what these farmers were producing, has been losing popularity for years. You can't force consumers to like it.
No, not typically. And I know this because I grew up around farmers and farmers that had orchards. Trees would be cut down and replaced, usually if the tree was sickly. But not because this year plums are doing better on the market.
As I said, trees take a long time to bear fruit. It's not typical that a farmer will cut down a tree in their orchard in response to market pressure as that tree represents a huge investment.
If that were the case, then why are there so many peach trees currently? Why hasn't the entire orchard been replaced with olive trees?
Do you actually have farming experience?
Yes, I actually have farming experience. Farmers aren't naive about this stuff. They forecast future trends as best they can and will replace trees (or other crops) when it seems profitable. Newly planted fruit trees will generally start producing within a few years and output increases as the trees grow, then eventually levels off and declines as they age. A tree is just another capital asset with a limited lifespan. Much ado about nothing.
People have this image of farmers as ignorant bumpkins, when owners of even small family farms are some of the most intelligent, objective, and economically-motivated businesspeople I've known.
The first IBM PC I ever used was in the home office of a farmer who was using it for economic forecasting. And I grew up in the middle of a large city (for reference, I had an Atari 800 at home, regularly used Apple ][s at school, my friends were raving about the newly-introduced Commodore 64, and the most impressive tech I had ever seen was a VAX 11/780).
Not to mention, the tech in modern tractors and all the other farm equipment these days is insane.
Who made the claim that farmers are ignorant bumpkins?
Ok, then I'll just reissue my 2 questions
> If that were the case, then why are there so many peach trees currently? Why hasn't the entire orchard been replaced with olive trees?
I agree, that farmers forecast and switch up crops. But I disagree with you that you have a bunch of farmers that have mixed orchards setup because of that forecasting. It's not like wheat or barely where you could switch between the two even mid year if you were crazy enough.
I'd also point out that the first fruiting isn't exactly a bumper crop. It takes several more years after that first fruiting before you get to the point where a tree is fully productive.
You're not making any sense. I never claimed that a bunch of farmers have mixed orchards. Some farmers have too many peach trees right now because Del Monte got their forecasts wrong so now those farmers will chop down the peach trees and probably plant something else. Olive oil demand is still trending up so that might be a possibility in some cases, there are lots of options. That's just how farming works: you have to place your bets and then work for years to see if they pay off.
> I never claimed that a bunch of farmers have mixed orchards.
You claimed
> Every year farmers cut down a bunch of trees and plant new ones in response to costs and market demand.
What do you mean responding to "costs and market demand"?
You also claimed
> They forecast future trends as best they can and will replace trees (or other crops) when it seems profitable.
Both those statements would imply that you have orchard farmers who are growing and harvesting multiple types of crops. Unless you are trying to say that it's common for a fruit farmer to completely destroy an orchards and replace with with a new crop.
Both, frankly, are ridiculous claims which are quickly dispatched with "Why aren't there more olive trees".
If the reaction to market forces was that fast, the expectation is that last 10 years of raised olive prices would have caused a lot of these farmers to uproot and plant olive trees. It's currently a very lucrative crop and California is certainly amenable to growing olives.
> That's just how farming works: you have to place your bets and then work for years to see if they pay off.
I agree with this statement. Farming is a game of placing bets on the future of the market. But I disagree that orchard farmers are commonly just diving head first into switching crops in any sort of fashion. It takes a severe event, like their primary distributor going bankrupt, to move an orchard farmer towards new crops. That is not common or business as usual.
Agree with the other commenter that there is no implication of mixed orchards in their comments.
It is commonplace to decide that a particular plot of land needs to be either maintained or moved to production of another crop. When those production change decisions are made, it is in response to an assessment of the market and the properties of the plot of land. (The assessment may be wrong or short sighted of course.)
You're still not making any sense. If you drew some sort of implication about mixed orchards then you really need to work on basic reading comprehension.
Then explain what you meant.
I contend this is not "routine and seldom makes the news." and I back that up by claiming that it's uncommon for orchard farmers to change crops.
What part of that doesn't make sense?
Did you not read the linked article? There are so many peach trees because the farmers were contracted to grow and sell the peaches to Del Monte.
New orchards of various crops are planted every day, I don't know why you think this doesn't happen in the modern age.
There’s not a lot of overlap between prime citrus and prime olive farmland.
What does citrus have to do with anything?
> Every year farmers cut down a bunch of trees and plant new ones in response to costs and market demand
I'll admit my experience is more with vineyard than orchards, but at least for grape, this isn't true. You only cut down old, unproductive vines, and market demand is not a factor. You never know how much you will produce YoY, so basically you try to only produce what your domain can handle. (The english translation for the following will be rough i realize).
On the "planting" side, you're wrong: a limited stock of "rootstock" (if this is the correct translation of "porte-greffe") is produced each year. As those are specific to a certain type of soil and take time to grow, you don't produce a ton each year. And vines "rootstock" are _a lot_ easier to grow than other trees (you have a mother-vine that you don't prune, you bury its branch in the soil, and over a year it will develop roots). My guess is that for orchards, your rootstock should take 3-4 years, so it isn't that easy.
Grape vines have a longer productive lifespan than most fruit trees so I don't know what point you're trying to make. Lots of wine grape vines are being torn out in California. Competition is intense, we're well past "peak wine" (consumers aren't drinking as much), and honestly a lot of it was kind of garbage anyway.
Ever wondered why there are few merlot vineyards in Napa these days? Dozens of vineyards are uprooted and replanted each year in that tiny valley alone in response to market demand.
> Canned fruit, like what these farmers were producing, has been losing popularity for years. You can't force consumers to like it.
Has canned fruit actually lost popularity? Or did the grocery stores decide that the shelf space had a higher profit margin pushing something else?
The last couple of times I tried to get canned fruit for a recipe I had to actively hunt for the particular cans of fruit I needed (I needed to hit 3 different grocery stores).
I haven't tracked peaches recently, but I can tell you that canned apricots have been a bit thin on the ground for at least a couple of years.
> Has canned fruit actually lost popularity? Or did the grocery stores decide that the shelf space had a higher profit margin pushing something else?
> The last couple of times I tried to get canned fruit for a recipe I had to actively hunt for the particular cans of fruit I needed (I needed to hit 3 different grocery stores).
> I haven't tracked peaches recently, but I can tell you that canned apricots have been a bit thin on the ground for at least a couple of years.
Groceries stores with canned fruit being harder to find is entirely consistent with it being less popular. Pushing you to go to another store for something is bad, if you're a grocery store. That's a great way to drive off customers. There's a lot of shelf space at my local grocery stores still dedicated to fairly-redundant products or high amounts of extra copies of items, so I don't think they're being pushed out because something else is way more profitable. (My local stores have much larger selections of canned beans than canned peaches, for instance.)
I think it's just generational trends. Generally health-conscious consumers these days are more skeptical of canned vs fresh, and non-health-conscious have more junk food options than ever. It's also gotten easier to source fresh fruit across seasons than thirty or forty years ago, further squeezing canned options.
> Has canned fruit actually lost popularity?
Compared to Del Monte's heyday in the previous century? Absolutely.
A remarkable amount of fruit is available all year, or most of the year now. I cant imagine eating canned fruit by choice.
Another thing in short supply these days is actually being able to buy an actually good Apple pie or Peach pie. Oh well…
I shall try and see if I can get a Peach or an Apple pie. This weekend you know the old-fashioned pie that actually tastes good and is well made.
That’s another thing that’s in short supply along with actually getting any good baked goods unless you can go to a small Bakery somewhere if you can find one they usually cost a more but not that much more than what you could find in the supermarket times have been changing for the worst when comes to baked goods.
Del Monte in recent times was passed between four equity companies. One of those equity companies actually bought them twice. Del Monte was on the pathway to hell.
Hopefully some of those trees can be transplanted within a 50 mile radius of where they are. If I lived up in that area. I would seriously try to see if I could transplant a few.
A well-made, old-fashioned peach pie. With good vanilla ice cream on top. McConnell’s, Häagen-Dazs or the best you can find locally or maybe homemade.
I forgot it was even a thing.
> Has canned fruit actually lost popularity?
Yes. Global supply chains have improved, so it's easier to get fresh fruit year round (or closer to it) than it used to be. If they can, people will choose fresh over canned, for obvious reasons.
> people will choose fresh over canned, for obvious reasons
Not at all obvious. A lot of "fresh" produce in the US was refrigerated for more than a week before it arrived in the supermarket, from varieties that were designed to hold up to transport rather than flavor. Fruit that was canned at the height of the season is often much more flavorful than "fresh" off-season fruit.
The US has a problem with packing fruit in added sugar, which is sad but not inherent to canned fruit.
> Has canned fruit actually lost popularity? Or did the grocery stores decide that the shelf space had a higher profit margin pushing something else?
Do grocery stores make their own decisions about what goes on their shelves? I thought they mostly rented the shelf space to food vendors who were responsible for that.
For example, a while ago I complained on HN that a particular flavor of Triscuits was reliably out of stock whenever Safeway discounted Triscuits, and I was told that the way to address that, were I so minded, is to reach out to Nabisco on Twitter, because they - and not Safeway - make the stocking decisions.
Where I live peaches are rare. It's all pears, oranges, and fruit cocktail. Not joking, there's five different variants of pears on the shelf at the grocery store, from sugar free to light syrup, and from three different brands. Canned plums? Nope. Apples? Nope. Strawberries? Nope. Cherries? Only around Thanksgiving and Christmas.
At the very least I can get all of those fresh and not canned, but honestly I'd prefer having canned versions as well because of all of the import uncertainty that ended up affecting things this past winter.
> That means someone that wants to plant new trees needs to do so with the notion that they won't get any sort of return on investment for a decade
Peach trees take 2-3 years to bear fruit specially with grafting.
Stone fruit (like peaches) are all typically grafted. And that 2 to 3 years is when the trees first fruit, not when you get a full harvest from the tree. The 10 to 20 years is when the tree is fully mature and producing it's max amount of fruit.
That first fruiting you are looking at something like 2 or 3 lbs of fruit. Full grown you are looking at about 20 lbs of fruit yearly.
You can push up maturity by using a dwarf root stock and get to full fruiting in 6 to 8 years.
>Full grown you are looking at about 20 lbs of fruit yearly.
Just from the poorly cared peach trees that grow around my house it has to be much more than 20 lbs of fruit yearly. That's only like 100 peaches. I've been to a pick your own peaches orchard and it was easy to fill a 5 gallon bucket from a single part of a tree. I know there are a lot of varieties but it has to be a lot more than 20lbs.
I didn't say you'd get full harvest at 2 years, otherwise I don't think anything we've both said is incompatible
That's fair, I was mostly trying to point out that the first fruiting is very much not something you could really count on for a profit. You wouldn't want an orchard filled with trees that are first fruiting.
TFA mentions 20-year contracts between Del Monte and farmers. That seems to have worked so well that we have too many peach trees. Like, to me the present situation itself should assuage your fears. Are you thinking another processor/distributor won’t come along in the future with long-term contracts? Where will they get their peaches?
> Are you thinking another processor/distributor won’t come along in the future with long-term contracts?
That's exactly what I'm thinking. There are few crops where someone might want to lock in a 20 year contract. It's a major gamble for all involved. It's a gamble for the distributor because tastes might shift in 20 years (almost certainly a big part of why Del Monte went bankrupt) and it's a risk for the farmer because it's not clear that another distributor will look at these farms and think "You know what, I can pick up where that company went bankrupt".
> Where will they get their peaches?
Will they get peaches? That's really the question. They might just decide it's too unpopular and the price would have to be too high to support selling peaches.
Del Monte was a big reason why peaches are available. Similar to how Dole is a big reason we have bananas year round. If Dole goes bankrupt, we likely won't see bananas on the shelves. And we know this because there's more than just 1 variety of banana in the world. We have access to only 1 because there's only one distributor of bananas in the US.
We are moving into an era of private equity doing fast turn around profits on everything. The old way of business thinking that you can have a 20 year contract is likely dying. 1 year contracts are going to be much more likely because that's where a lot of the investment is going. And Del Monte is the poster child for why a business would shy away from doing a 20 year contract.
> We have access to only 1 because there's only one distributor of bananas in the US.
Aren't there 3, at least? Dole, Chiquita, and Del Monte?
In the US, there's at least that many.
I've also bought Fyffes bananas [in the US] in recent times; those probably came from Aldi.
The more diverse ethnic marketplaces surely have other sources. They've got their own ways of doing stuff. :)
The bananas I buy at Aldi are not Dole. Unless Dole sells under different brand names. But Dole is obviously the big player.
If you don’t trust farmers to make the decision, who do you think should be making it?
Peach trees last at most 15 years on commercial farms and are often replaced after only 10 years. The peak production years are from 5 to 10 years and I doubt any trees being cut down under this program are in that stage.
I don’t know about peaches but ‘round my way the cider apple farmers spank the living daylights out of their high density dwarf trees. They get grubbed up and replanted in under a decade. Fruit trees have a naturally short lifetime but mega yield modern species are something else — the arboreal equivalent of a 40 day broiler.
Ironically, there’s a century year old perry tree at the top of the valley.
> Del Monte went out of business because there wasn't enough demand for the peaches
They appear to have gone out of business because of massive debt from a leveraged buyout, combined with other issues.
https://www.linkedin.com/pulse/when-private-equity-overcooke...
That doesn't change the fact that there isn't enough demand for canned peaches. If there were enough demand for peaches the farmers would sell the peaches, rather than destroy the peach trees.
The wholesale buyer is in bankruptcy, unable to pay the interest on debt inherited from the leveraged buyout.
I am confident that if a gold mine existed, and their wholesale purchaser went bankrupt, someone else would buy the gold.
Somebody really good at the economy needs to explain to me how a PE firm buys a company using the company it’s buying as collateral for that financing, and then somehow, that acquired company is the entity that debt is attached to.
Imagine if us poors could buy a Hummer EV financed against itself and then the truck had to self-drive for uber to pay its own payment, under penalty of being put in a crusher. Oh and you get paid by the thing for the privilege of being bought.
But that’s exactly what happens when someone buys a Hummer with an auto loan?
You put 10% down (say $10,000) and the bank lends you $90,000 based on the lien they have on the hummer.
No different than a leveraged buyout - PE firm buys a company with cash down and takes on debt for the rest of the purchase using the assets of the company as collateral.
It makes a lot more sense if you think of it in steps - negotiate buyout agreement with owners, close purchase with cash and take ownership, then as CEO have the company take on debt and use the loan proceeds to close the deal.
Just like if you went to a dealership and negotiated a deal where you purchased the hummer for $10k, they transfer ownership to you, then you go to the bank and get a loan using vehicle as collateral then pay the dealership the loan proceeds to close the deal.
Where I think you’re confused is the “how do they take a loan on an asset they don’t own?”. The answer is they don’t. It’s multiple steps and they own the company they use as collateral.
Yes, it is the same way you buy a home mortgage or get an auto loan.
You find a bank that thinks there it can make money from interest payments or collecting the asset.
it really is that simple. If self driving trucks were a good bet, banks would be happy to loan entrepreneurs money to buy them.
It’s entirely different. When I buy a car, as I’ve done a few times now, that debt is mine. I’m responsible for it. When I bought my corvette, despite the fact that I can’t drive it about four months out of every year, I’m still responsible for those payments. And if those payments were to stop:
- the asset would be repossessed
- the bank would wreck my credit
And most importantly IMO, to really spotlight it: I am paying that loan. I took out a loan for however much, with a payment schedule to pay it back. That is completely different and much more reasonable than “I borrowed money to buy a thing and now that debt is on that thing.”
And that’s before you even get into their various “fees.”
> The comments talking about farmers not being organized enough or powerful enough must be unaware of how powerful the farm lobby is and how much money they're able to secure from the government every year.
Most people don't realize how powerful farmers are in the US. We (rightly!) complain about Wall Street and bank bailouts when they happen, but I'd wager that we've given significantly more money to farmers over time, through bailouts (like this one) and regular subsidies.
Maybe that's a good use of tax dollars, maybe not. It feels bad, but I'm not an economist.
(And before anyone says that farmers are much more sympathetic characters than bankers, remember that "farmers" in the US overwhelmingly means gigantic corporate farming conglomerates; the individual family with a few hundreds or thousands of acres of land and hearts of gold is sadly increasingly uncommon.)
I would much rather there be a surplus of food production (driven by subsidies or whatever) even if it causes inefficiencies given that the alternative is significantly worse.
Regular surpluses can cause famines. This is what happened in East Africa in the 1980s. Cheap grains from elsewhere (Europe, US) caused farming to become unprofitable. Domestic/regional traditional farming of grains largely ceased as farmers moved to the cities. This happened very quickly, so consolidation and mechanization of farming to become competitive never happened. When cheap imported grains became unavailable in the 80s, for various reasons, it was too late. (The war in Ethiopia is often cited as the immediate cause, but people have always managed to farm through wars, usually at least enough to avoid the Ethiopian situation.)
It's an extreme case, but that same sort of pattern has happened repeatedly throughout history. Keeping some amount of farming economically sustainable is important. You don't necessarily need direct public subsidies, but you definitely want to avoid long periods where prices are too cheap to make farming of important crops not economically viable.
> The war in Ethiopia is often cited as the immediate cause, but people have always managed to farm through wars, usually at least enough to avoid the Ethiopian situation.
This isn’t true. See the Thirty Years War. There have been many wars in the past that have led to mass starvation by making the work of agriculture impossible. See also the depopulation of Sichuan during the Ming- Qing transition.
Separately the Ethiopian war was subsidised by western food aid and other aid to the Dengists.
Farmers switching from peaches to elsewise due to a lack of buyers represents a bailout?
Paying farmers to make the transition from peaches is a bailout
Farmers provide food, banks scalp the interest between you and the government. They aren't the same at all. Farmers, even if they are megacorps are indispensable. Banks on the other hand serve basically no function in the modern era of financial activity.
The new crop will be grapes of wrath
The works of the roots of the vines, of the trees, must be destroyed to keep up the price, and this is the saddest, bitterest thing of all. Carloads of oranges dumped on the ground. The people came for miles to take the fruit, but this could not be. How would they buy oranges at twenty cents a dozen if they could drive out and pick them up? And men with hoses squirt kerosene on the oranges, and they are angry at the crime, angry at the people who have come to take the fruit. A million people hungry, needing the fruit- and kerosene sprayed over the golden mountains. And the smell of rot fills the country. Burn coffee for fuel in the ships. Burn corn to keep warm, it makes a hot fire. Dump potatoes in the rivers and place guards along the banks to keep the hungry people from fishing them out. Slaughter the pigs and bury them, and let the putrescence drip down into the earth.
There is a crime here that goes beyond denunciation. There is a sorrow here that weeping cannot symbolize. There is a failure here that topples all our success. The fertile earth, the straight tree rows, the sturdy trunks, and the ripe fruit. And children dying of pellagra must die because a profit cannot be taken from an orange. And coroners must fill in the certificate- died of malnutrition- because the food must rot, must be forced to rot. The people come with nets to fish for potatoes in the river, and the guards hold them back; they come in rattling cars to get the dumped oranges, but the kerosene is sprayed. And they stand still and watch the potatoes float by, listen to the screaming pigs being killed in a ditch and covered with quick-lime, watch the mountains of oranges slop down to a putrefying ooze; and in the eyes of the people there is the failure; and in the eyes of the hungry there is a growing wrath. In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage.
Amazing. I hadn't read the book in years, but immediately could remember the style.
Edit: I thought you had adapted this to what's described in the TFA, but seems like it's an actual excerpt.
Wow. What a powerful text. Where is it from?
The Grapes of Wrath.
For those who might not understand the problem: deflation in combination with sticky prices makes it look like there is a glut of products for the supplier. Deflation also makes it harder to earn an income from work rather than sitting on your money, making it harder to buy foods.
Deflation is an opportunity cost to running a business. If you can earn x% from sitting on your money, then any business activity must earn more than x% before you consider the investment. The easiest way to raise the return on investment to match the opportunity cost is to sell at a higher price, but remember, you have deflation, so you can't pass on the cost to the consumers. Supply must shrink until the price is high enough to justify production again.
Reducing the supply of products also shrinks the demand for labor that is used in the production process, leading to more unemployment with sticky prices or reduced income with flexible prices. Reduced income means people have less money to buy products, which means producers see a lack of demand and reduce production even further. The downward spiral feeds itself.
Deflation is bad because it has acute symptoms. Inflation is the least bad option, because it's a manageable slow burn. Of course with acute symptoms you will see more action towards fixing the problem, whereas with a slow burn humans tend to drag it along forever.
Wow. That's really applicable, nearly a century later.
No, it isn't. The book was written during the Great Depression. We're not in the Great Depression now. Pretty much nobody nobody is dying of malnutrition in the US and nobody is dying of pellagra specifically, because we've invented fortifying food with vitamins.
But the big difference is that the peach trees are being destroyed because nobody wants the peaches. That's the exact opposite of the quote, in which there are starving people clamoring for the food and the food is being destroyed to raise the price.
> Pretty much nobody nobody is dying of malnutrition in the US
Well, nobody important.
US rates of malnutrition: https://worldmetrics.org/malnutrition-in-the-united-states-s...
Increase in deaths from malnutrition: https://www.washingtonpost.com/business/2025/12/29/why-are-m...
> To be sure, we wouldn’t yet call it commonplace. But while it accounts for fewer than 1 in 100 deaths, its toll is rising so fast that it’s now in the same league as arterial disease, mental disorders and deaths from assault.
Am I reading the charts correctly that 20% of under-54s have "marginal, low or very low food security" with it being over 30% of under-14s? If so, focusing only on deaths is missing a huge part of this.
That looks right to me. Of course, the definition of food security can be disputed, but it seems like improving people's diets or access to quality food should be a priority.
> The source we used, a supplement to the Census Bureau’s Current Population Survey, has been canceled by the Agriculture Department. The upcoming release could be the last.
That doesn't sound encouraging.
While SNAP is gutted
Great point, hoping whatever replaces them uses less water. Ag pulls ~40% of California's water and it feels like 3 out of every 4 years is a drought
> Del Monte went out of business because there wasn't enough demand for the peaches
How did this happen? It takes a long time before a peach tree seedling gets to the point where it can bear a significant amount of fruit. I'm going to guess about 10 years. Given that kind of delay, how did they get into a situation where there was this much over-production?
delays between increasing capacity to produce and bringing production to market naturally lead to cycles of over and under production. https://thesystemsthinker.com/balancing-loops-with-delays/
> Del Monte went out of business because there wasn't enough demand for the peaches.
Maybe if grocery store peaches weren't a fibrous, tasteless representation of a real fresh peach, they'd still be in business.
I find good stone fruit to be very fragile, and hence the economics probably don't support their sale outside of the stone fruit's season and an acceptable radius to where they grow. Peaches/nectarines/plums are easily one of the worst returns on investment when I buy fruit, and this is within a days' drive to California and PNW.
Del Monte sells mostly canned peaches and those plastic snack packs so they’re picked a lot riper than fresh peaches at the grocery store.
The peaches have similar problem with fungal diseases like bananas. The best tastiest varieties can't be mass grown anymore.
There might be not enough demand to match the capacity they contracted and invested to can, but surely there is some demand. You'd think someone would buy out some of the contracts and the canning capacity at a discount and continue some sort of operation.
They are, but it is only 40% of what was previously contracted to be purchased.
Is wood that useless that they need to be paid to remove it ?
The lack of a crop next year is why they are receiving a subsidy. It’s to bridge the gap until they plant a new crop on that land.
> A situation like this bring out many comments that reveal a very low understanding of basic economics (and a low rate of reading the article).
And a very low understanding of basic biology. A bunch of rotten fruit is _exceptionally valuable_ in many parts of the world. There's a million things you can do with it, alcohol, fertilizer...
edit: me right now I'm in a position where I could really use truckloads of rotten, inedible peaches if I could get them for free. Trying to figure out the most economic way to get a rather barren place some soil.
> A bunch of rotten fruit is _exceptionally valuable_
> right now I'm in a position where I could really use truckloads of rotten, inedible peaches if I could get them for free.
These two statements contradict each other. If you are pushing to get something for free (and seems like you wouldn't pay for them, or wouldn't pay much for them, instead opting to do without), then they are absolutely not exceptionally valuable from the sell side.
I would pay for it - I meant this in the context that people here are getting paid to destroy value. Also don't get the downvotes, improving soil efficiently in large quantities is an interesting question a lot of tech people (being city people) never have to care about.
If rotten fruit was exceptionally valuable, then people would be paying exceptional amounts of money for it instead of wondering where they can get truckloads of it for free.
Right? It's not exceptionally valuable. It has some nonzero value doubtful that matches the cost to collect it and get it to the people who want it.
Someone needs to put them in tanks for long time and make something very valuable like this:
https://en.excaliburshop.com/catalog/item/8951/fleret-merunk...
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