Numbers dwindle, but outlook offers some hope

By DAN WHEAT
Capital Press

CASHMERE, Wash. -- As Joe Brooks walked through the office filled with empty desks, he spoke respectfully of the men and women who once worked there.

They were good people and they did their jobs well, he said.

It was Jan. 5, 2010, two years and one day after Tree Top's Cashmere juice plant shut down.

One woman worked with a computer at one of the desks. Two male workers said hello from their chairs in an adjacent breakroom. There was no one else around.

At its peak, the plant employed dozens and ran 24/7, producing 24,000 gallons of apple or pear concentrate daily.

It was a big part of a small town for 45 years.

Brooks, the plant manager, spent most of his career there. It wasn't easy for him to oversee its closure and the layoffs of friends. He still manages the mothballed facility and Tree Top's nearby Wenatchee plant.

Tree Top said it closed the Cashmere plant because it receives less cull fruit for juicing and because U.S. production is unlikely to recover soon from Chinese competition.

Tree Top turned a financial corner by closing plants in Cashmere, Milton-Freewater, Ore., and Rialto, Calif., in the last four years.

Tree Top's story is not unlike the many closures and consolidations of food processing plants on the West Coast and across the nation in recent years. Increased global competition is a chief factor. The decline may have stabilized but is likely to continue, some say. Others are more optimistic.

"We had a wave from the mid 1990s to 2003 where the industry actually lost or consolidated more than 50 food processors in the Northwest," said David Zepponi, president of the Northwest Food Processors Association in Portland.

He said a mini-consolidation period now "won't go away," but he's bullish about the entrepreneurial spirit of the region. Newcomers include Real Foods, a deli-food manufacturer in Seattle; Amy's Kitchen, an organic food company with plants in Santa Rosa, Calif., and Medford, Ore.; and Nutriom, a company in Lacey, Wash., that converts eggs into a crystallized form for use in foods.

Not all food processors will go overseas, Zepponi said.

"As long as we stay innovative, we will do fine," he said. "In Oregon, we increased 1,900 jobs in food processing last year. It was the only manufacturing group that grew."

He notes there are thousands of small startup food processors in the Northwest, some in kitchens and garages.

Ed Yates, president and chief executive officer of the California League of Food Processors in Sacramento, said he's seen 200 plants disappear in the state in 35 years.

"That's large plants that convert raw product into storable form," he said. "There's probably 130 left in the whole state." About 20 of the closures have been in frozen vegetables.

Yates blames the high cost of doing business.

"California does not necessarily adopt federal requirements for the environment and energy," he said. "It does its own thing, which typically is stricter and more expensive. How do you compete with China's coal-fired plants with no emission controls?"

Asparagus, artichoke and spinach processing has left the state and canned pears is just barely holding on, he said.

Nuts, peaches and peas are doing well and the real bright spot is growth in tomato products, driven by the increase in hamburgers and pizzas in recent decades, he said.

Tomato production has doubled to 12 million tons in 30 years while one tomato company has dropped from five factories to one in 20 years, Yates said.

The loss of processing plants has slowed and leveled because processors have "become very, very efficient," he said.

Yet any optimism he feels is tempered, he said, with "dysfunctional" state and federal handling of San Joaquin water problems and the state preparing to impose an estimated $500,000 annual costs per plant to combat global warming.

Desmond O'Rourke, retired Washington State University agriculture economics professor and a private consultant in Pullman, Wash., said food processors in Idaho, Washington, Oregon and California all face expensive labor, a risk of shutdowns because of raids targeting illegal immigrants, burdensome regulations and foreign competition.

Washington has a third of the asparagus acreage it once had, and potatoes could be next to leave the region, he said. The industry's fate will depend on technological advances in potato and other processing. Many plants in the four states are old, and when they need to be replaced with newer technology it won't happen here, O'Rourke said.

"They will be looking to move to Turkey, Brazil or Chile or wherever," he said. "The only way to protect our industries is to have a more favorable environment."

Eric Hurlburt, chief of domestic marketing and economic development at the Washington State Department of Agriculture, disagrees with O'Rourke.

Hurlburt said the world will need more food because of population growth, that the U.S. remains a huge producer and potato and other processing plants will be modernized or built new in the Columbia Basin as demand dictates.