Lance Phillips of Gem Orchards near Emmett, Idaho, says 32 acres is the right size for his diversified fruit operation.
Lance Phillips of Gem Orchards Sept. 7 with Gloria peaches ready to harvest.
Gloria peaches picked Sept. 7 at Gem Orchards near Emmett, Idaho.
field reporter, SW Idaho and SE Oregon
Lance Phillips of Gem Orchards near Emmett, Idaho, says 32 acres is the right size for his diversified fruit operation.
Lance Phillips of Gem Orchards Sept. 7 with Gloria peaches ready to harvest.
Gloria peaches picked Sept. 7 at Gem Orchards near Emmett, Idaho.
EMMETT, Idaho — Lance Phillips is on track to turn his first profit in the eight seasons he has owned Gem Orchards. He figures that for now he has found just the right size for his operation.
“I have opportunities to expand,” the Emmett, Idaho, grower said. “But I want to make sure: Can I market it first? I want to be very cautious with expansion. I don’t want to lose my personal touch.”
A diversified fruit and berry operation’s ideal size is subjective. But at 32 acres Gem Orchards is finding its sweet spot as the trees enter their prime, the customer base continues to grow and the operational and regulatory challenges remain manageable. Phillips started with 2.5 acres in September 2015.
“I like the niche,” he said.
The state’s roughly 15,000-acre fruit industry includes a few large businesses, about six dozen in the 20- to 60-acre range, and many more small orchards, said Bob Purvis, an orchardist and president of the Idaho State Horticultural Society.
The latest USDA Census of Agriculture said fruit, tree nuts and berries in Idaho produced $25.12 million in sales from 532 farms.
Industry acreage is just less than a quarter of the 1917 total, due in part to competition from neighboring Washington state, which dominates domestic fruit production.
Two of Idaho’s big players are Symms Fruit Ranch, which is between Caldwell and Marsing, and Henggeler Packing Co. in Fruitland.
“We’re big ... compared to some other Idaho orchards but small compared to a number of Washington operations,” said Kelly Henngeler, one of the managers at Henggeler Packing. The business started in 1908 and ships fruit around the country.
“Any of the smaller organizations, like ourselves, are trying to find our niche,” he said.
Providing high-quality fruit, developing brand loyalty, and making sure orchard and packing operations meet current needs require continuous work, Henggeler said.
The family-owned company owns or leases about 500 acres. It has a few full-time employees and can have a total crew of more than 100 depending on the time of year, he said. The business for the past six years has hired guestworkers through the federal H-2A program to supplement its domestic employees.
“The big challenge — and it has been for years — is labor, for everyone,” said Jamie Mertz, a partner in Symms. Those costs increase every year.
The 104-year-old Symms operation has nearly 5,000 acres and sells to major grocery chains and international customers. In-house packing operations add control over what is grown and sold.
Challenges include “a lot of costs,” Mertz said, and “things everybody is fighting” such as supply-chain delays.
“The right size is whatever the right size is for you,” Mertz said.
For example, Phillips, the small-scale grower, can charge a higher markup than a wholesaler, he said.
“It’s a niche,” Mertz said.
A much smaller operation than Gem Orchards is the 1.2-acre Purvis Nursery and Orchard northwest of Homedale. Purvis sells fruit, scion wood, finished trees and root stock. Retail and wholesale fruit sales are the leading revenue source, but the other segments increase overall viability.
“I’m straddling the boundary between backyard fruit grower and commercial,” said Purvis, 75, a retired Washington industry horticulturist and USDA National Agricultural Statistics Service statistician. His business segments are manageable and he can do most of the work himself.
Williams Fruit Ranch, next to Gem Orchards in Emmett, has downsized over the years from more than 70 acres of fruit in 1990 to less the 30 acres today.
At its peak, the orchard had 10 people full-time and up to 80 employees during harvest.
“This is manageable in my later years,” said owner-operator Jackie Williams, 82, whose husband, Harold, died in early 2018. “With the economy and labor, it’s getting down to where I am a pedestrian orchard now.”
“We’re selling all of our fruit each year,” Jackie Williams said.
At Gem Orchards, Phillips is the only full-time employee. His wife, Angie, their three children and up to five contracted seasonal workers help.
“I’m small enough that I can manage all the activities working day to day. … I’m paying myself doing the jobs, and getting profit, too,” said Phillips, 49.
Getting bigger can mean additional administrative and regulatory and compliance responsibility.
Payroll, regulations that can increase with more employees, the cost of a larger facility and the U.S. Food and Drug Administration’s Produce Safety Rule all loom as an operation grows. The rule exempts lower-income businesses and provides a qualified exemption to others based on income and customer type.
Phillips grew up on his family’s orchard near Cashmere, Wash. He earned a horticulture degree at Central Washington University.
He worked on a farm and orchard his father later bought near Weiser, Idaho. He farmed with his dad and on his own while employed by a nursery, a soil and water conservation district and the USDA Farm Service Agency.
Phillips owns 5 acres. He leases, partners in or crop-shares 27 acres, assembled as he expanded into peaches and added earlier-maturing cherries and other fruit. He owned some of his equipment from the start.
Revenue is about equally divided between U-pick customers and fruit that is picked for sale on-site or at fruit stands, he said. The orchards also grow nectarines, apricots, blackberries and raspberries.
Gem Orchards’ September 2015 start amounted to Phillips buying 400 cherry trees on 2.5 acres.
The 2016 crop was especially strong, and “I thought every year couldn’t be as good,” he said. Picking took three weeks, which is “good when you have a job” off-farm.
A 2017 freeze decimated the cherry crop, so Phillips diversified, planting about 2,500 peach trees on 7 acres.
Crops were good in 2018 and great in 2019, when “we ended up juicing about 40,000 pounds more cherries than we picked” for sale, he said.
The 2019 cherry juicing effort did not succeed on paper but taught him several lessons. Processing, refrigeration, storage and jar and label costs consumed any profit, and regulatory compliance took time.
“I spent a lot of hours majoring in the minors,” Phillips said.
Also in 2019, he and a neighbor planted 800 dwarf cherry trees on 3 acres. He left USDA that fall to work full-time at the orchards.
In the pivotal 2020 crop year, frost shrank cherry yields. But the peaches, in their fourth season, missed the frost and produced their first harvestable crop. Phillips planted 12 acres of earlier-season cherries, 2.5 acres of nectarines, and an acre of thornless blackberries and raspberries.
He also made juice, jelly and syrup under the state’s cottage production law, which allows production in a home kitchen or other designated location. It applies to foods that are not time- and temperature-controlled for safety and sold directly to the consumer.
The U-pick cherry harvest was curtailed by frost in 2020, but the orchard was helped by the diversification of crops. COVID-19 fueled demand for outdoor activities and locally produced food, said Phillips, who “learned about boxes and packaging,” and worked on automating his sprinklers and improving soil health.
Gem Orchards sold all of its 2021 crop, which was normal for cherries and good for peaches, he said. COVID-19 again aided demand, and “I got my name out there, and more people came.” He and partners also acquired a mature 1-acre peach orchard nearby.
As of early September, this year’s crop has been his second-best for cherries, and is shaping up to be “the best money-making crop Gem has had to date” from all crops, Philips said.
He bought a $40,000 portable wind machine, which benefited his peaches at lower elevations and helped that crop to its best-ever yield. He also bought a new tractor and partnered with neighbors on a sprayer. He added a 3-acre mature cherry and apricot orchard.
An important customer-service principle for Phillips is to “let them take time. Don’t rush people.”
He sometimes thinks about growing the orchard in the years to come.
But for now, “it’s just fun,” Phillips said. “I get everyone, from the canners to the people who want a couple pounds or want to make smoothies at home.”
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field reporter, SW Idaho and SE Oregon
I cover agricultural, environmental and rural issues in southwestern Idaho and southeastern Oregon. I can be reached at 208-914-8264 mobile or bcarlson@capitalpress.com.
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