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FarmTogether Q3 Tree Fruit Market Outlook

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FarmTogether Q3 Tree Fruit Market Outlook
FarmTogether's Daybreak Organic Apple & Pear Orchard - Crowdfunding Property 

Today, several trends in US agriculture – including a growing global demand for healthier snack foods, recent innovations in harvesting technology, and the potential to generate a high cash return – are helping to accelerate institutional investor interest in tree fruit crops.  

With the tree fruit harvest well underway across the US, we wanted to share a brief market update on several of the tree fruit varieties offered at FarmTogether, from apples to mandarins, as well as an industry outlook for 2023 and beyond.

Apples & Pears

Across the US, apple and pear harvest began in early August and is expected to continue through November. In Washington state – the leading US producer and location of all four FarmTogether apple and pear deals – the 2022 crop has been lighter than that of 2021, due to an early season freeze and the extreme temperatures the state experienced in the summer months. The 2022-23 pear harvest is estimated at 16.2 million standard box equivalents, while the apple harvest is projected at 108.7 million standard 40-pound boxes, an 11.1% decrease from last year’s 122.3 million boxes.

Produce sales desks are optimistic that the lower 2022-23 apple and pear harvests, coupled with continued inflationary pressure and the ongoing war in Ukraine, should result in higher crop prices. Additionally, southern hemisphere production in key supplier countries, including Argentina and Chile, has also suffered setbacks in the last year, which likely will drive up demand for the upcoming northern hemisphere crop even further.

Despite the overall crop decline, however, emerging varieties and organic production continue to grow in market share, reflecting increased consumer demand. The Cosmic Crisp, for example, a proprietary apple varietal grown only in Washington, now reflects 4.6% of the total apple harvest, up from 3.2% last year. Meanwhile, the organic apple forecast for 2022 is estimated at 13% of the total harvest. In fact, demand for organic fruit has been a key driver of overall demand for both apples and pears – with Washington growers leading this category.

Citrus

As we gear up for this year’s citrus harvest, which typically begins in mid to late December, growers in California are forecasting a strong performance for the 2022-23 season. This performance indicates a rebound from the lower 2021-22 season, which was down 19%.

California is projected to produce nearly 62% of the nation's oranges, with 47.1 million 80-pound boxes, up from 40.4 million in 2021. Demand for California oranges, including mandarins and navels, is expected to be in high demand this season, as Florida’s orange crop is expected to be nearly a third smaller than last year – and one of the smallest in decades – due to the impacts of both Hurricane Ian and citrus greening disease. As a result, the smaller total citrus crop could lead to higher orange prices, which have already increased 14.4% over the past year. The lemon crop, which fell by 20% last season, is also expected to rebound.



While U.S. agriculture continues to face headwinds, growers within the country remain optimistic as we head into the 2022-23 season. As consumer preferences continue to shift toward nutrient-dense snacks, like apples and citrus, there remains plenty of opportunities for growers. Recognizing this opportunity, FarmTogether will continue bringing premium tree fruit opportunities, such as emerging varieties or organic development deals, to our investors.

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Interested in learning more about farmland as an asset class? Click here to see farmland's historical performance, visit our FAQ to learn more about investing with FarmTogether, or get started today by visiting ways to invest.



Disclaimer: FarmTogether is not a registered broker-dealer, investment adviser or investment manager. FarmTogether does not provide tax, legal or investment advice. This material has been prepared for informational and educational purposes only. You should consult your own tax, legal and investment advisors before engaging in any transaction.

Rebecca Bauer
Senior PR & Communications Manager
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