With the profitability of top fruit production balanced on a knife edge, smaller and older growers in particular are finding it difficult to survive unless they have a really good niche market for their fruit.
If their children have no wish to take over their farms they can either sell or rent them to larger growers, who generally want to spread their overheads and/or offer their supermarket customers larger volumes of fruit and better continuity of supply.
In the South East there are at least six growers who, over the past 10 years or so, have greatly expanded their enterprises by acquiring more farms. Most of them have 1,000 acres (405ha) or more of orchards and a central packhouse and storage facilities - the former often being large enough to handle more fruit without any extra investment.
"Quite often, growers are retiring and their families don't want to take over; they don't always want to sell their farms and so renting them out makes good economic sense," says Farm Advisory Services Team (FAST) managing director Tim Biddlecombe.
"For bigger growers it pays to take on more farms, particularly if the rented orchards are better than their worst ones, as it can be a cheaper option than grubbing and replanting them."
He reckons that growers with no storage or grading and packing facilities are more likely to be struggling financially and therefore looking for alternative ways of generating income. Those able to invest in stores have the advantage of more control and flexibility over when their fruit is marketed, he says.
One of the biggest growers is Melvyn Newman of Newmafruit, with 405ha of orchards on seven farms in Kent, from Preston in the east to Teynham in the north, the biggest being the home farm at Chartham Hatch, near Canterbury. He has steadily expanded his business, starting at Paddock Wood in 1972 with 8ha and a small packhouse and in 1989 taking over Howfield Farm, near Canterbury, which now has 114.5ha of fruit.
"In the 1990s we began renting farms from growers who were finding it difficult to make money," explains Newman. "We've changed our varieties to mainly Braeburn, Cameo, Gala and Kanzi at the expense of Cox, and over the past five years we've expanded our packhouse at a cost of £2m to £3m."
Since 2003, Newmafruit has invested in 15 new stores to increase the total capacity to around 6,000 tonnes and upgraded its older stores. The aim was to store (grade and pack) at Howfield but, despite the increased capacity, some stores had to be rented last year and more this season because of the very heavy crop.
The company's technical consultant Mike Barnett says its six rented farms range from about 12ha to 57ha. If the opportunity arose the firm would consider renting additional farms, provided their orchards have sufficient production potential and are not too far from Howfield. He doubts that Newmafruit would rent farms outside the South East as they would pose too many management and logistic problems. "We could take on another 200 to 300 acres," he reckons. "The important thing is to be flexible. You've always got to look for opportunities and innovative varieties that enable you to provide regular continuity of supply in volume to your retail customers."
Barnett finds that, generally, those people renting out their farms have been unable to cope with overheads because they are far too high per hectare.
Growers must make around £1,235/ha net profit to make a reasonable living and that is very difficult unless the orchard area is large enough to minimise overheads per hectare. Smaller growers find it particularly difficult and stressful to deal with assured produce schemes and the audits they require because, unlike large businesses, they cannot afford to employ people to do the significant amount of work involved.
"If you're a small grower with, say, 40 to 50 acres, you can spend a small fortune per acre (on these schemes) but for large growers the cost per acre is relatively small," Barnett maintains.
To ensure that rented orchards produce high yields of top-quality fruit, grubbing and replanting clauses are becoming increasingly prominent in Newmafruit's leasing agreements. However, leases of at least 10 years are required to justify these operations financially, according to Barnett.
Generally, the orchards the company plants on rented farms are pretty intensive with tree populations of around 1,500/ha compared with 2,500/ha for the home farm. In the recent past, Braeburn and Cameo have been the planting programme's main varieties but this winter plantings of Early Windsor, Kanzi Cameo and Bramley are scheduled.
"We're trying to ensure continuity of supply for our main customers," explains Barnett. "We're the biggest Cameo growers in the UK and possibly Europe with 56 acres and by the end of this year we'll have about 15 acres of Kanzi.
"All our recent plantings have been at the expense of Cox, although we're still producing as much of it as we did five years ago but from much less acreage (74.5ha). A lot of the farms we've taken over were heavily dependent on Cox."
Virtually all of the trees planted by Newmafruit are of Continental origin, purchased through John Breach, William Seabrook and Peter Kelly. They are mainly high-quality leg trees raised to a minimum specification so that they produce a good crop in year two and their maximum yield in year five or six.
Effective management of seven farms spread over a wide area does pose more problems than if they were all in one block, Barnett admits. But farms manager Tim Hall and his assistant Michael Newman cope very well, he says, and the storage of a high proportion of the fruit at Howfield makes harvest time logistics easier because most of the farms were previously storing their crops in different off-site facilities.
Furthermore, the company's central modern storage gives better control over fruit condition and having the packhouse close by has advantages over when the fruit has to be transported from hired storage to the packhouse.
FW Mansfield & Son, run by Paul Mansfield, is the largest of the UK's "big guns", with 20 farms in Kent totalling 1,214ha. Its crops include 73ha of strawberries, 101ha of plums and 81ha of cherries; the rest is mostly apples and pears with small areas of arable and woodland.
The company's 162ha home farm is Nickle, near Canterbury, purchased in 1994 when the firm already had 121ha. It now owns 15 farms and rents the other five, mostly on long leases that allow the grubbing and replanting of potentially unprofitable orchards.
Mansfield says the company has expanded so much mainly to increase the range and volume of fruit to satisfy its supermarket customers and keep its regular staff in work for 52 weeks of the year. Economy of size is an important factor as it means that overheads per hectare are lower than for smaller businesses.
Making the grade
As with the other very large enterprises, most of Mansfield's storage and all of the grading and packing are carried out centrally, at Nickle Farm, although with the increase in the number of younger orchards coming into full production some storage has to be rented.
The facilities have been greatly expanded over the past year or so with a £7.5m investment in a huge four-lane MAF grader and 33 650-bin (about 7,000 tonnes) controlled atmosphere stores served by a Hycool indirect cooling system. The chilled dispatch room - with six lorry-loading bays - holds up to 650 pallets of packed produce.
The grader, which has a capacity of up to 3,000 bins of fruit a week, is equipped with a high-tech singulator system that provides over 80 per cent cup fill.
FW Mansfield & Son finds that growing fruit on so many sites poses no real management or logistic problems for its staff, including farms manager Craig Rook. However, it has no plans for further expansion although it intends to maintain heavy top fruit yields and high quality with a regular grubbing and replanting programme for which leg trees are used.
All the trees come from the Continent, purchased direct from the nurserymen or through FAST and Kent Fruit Services. The planting is intensive with the trees in single rows for apples and pears - supported by stakes and wire trellis respectively - and in two-row beds for cherries and three-row beds for plums.
Biddlecombe knows of no growers in other top fruit areas whose enterprises have reached the size of the largest in the South East. But it might happen when the smaller growers in these other areas offer their farms for sale or rent and the more ambitious growers decide to expand to achieve economies of scale. Meanwhile, the trend seems bound to continue in the South East.