Good Fruit Grower

November 2015

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8 NOVEMBER 2015 GOOD FRUIT GROWER Packers work with insurers to recover from two wildfires that struck central Washington. by Shannon Dininny O ne of the oldest grower cooperatives in central Washington, Blue Bird, Inc., began packing cherries on a new $10 million cherry line May 28. One month later, that line and another dedicated to packing organic apples and pears were rubble, destroyed by a wildfire that unexpectedly raged into the Wenatchee city limits. In Washington State alone, wildfires destroyed or damaged several warehouses and businesses; dozens of homes were lost; three firefighters died and four were injured in one blaze. The full scope of the damage to the fruit industry is still being determined. But fall brought cooler temperatures and cleared smoke from the Northwest, and rebuilding is well underway. Firefighters saved Blue Bird's storage warehouses, which are being repaired of minor smoke and water damage. By spring, a new warehouse with the latest high- tech advancements in packing will join the fold. About an hour to the north in Chelan, Washington, Chelan Fruit Cooperative is researching new technologies to rebuild its operations at Plant No. 1, which included a presizing line and two apple packing lines, controlled atmosphere storage, and conventional storage, after it was lost to a wildfire in August. Both grower cooperatives are also looking into struc- tural improvements to ensure their facilities are better prepared to withstand future wildfires—something that, in the past, might have been less of a consideration. A wildfire downtown? Blue Bird President Ron Gonsalves got the call at home at 9 p.m. Sunday, June 28: Fire officials were at the co-op's Wenatchee plant with orders to evacuate the 300 workers packing cherries on the new line. The wildfire that had started on a hillside on the outskirts of town sent embers into downtown Wenatchee, igniting apple-packing materials at Michelsen Packaging Company near Blue Bird's warehouse. Gonsalves jumped into his rig for the 20-minute drive into Wenatchee. By the time he arrived, agricultural sup- plier Northwest Wholesale, Inc., and a Stemilt Growers warehouse were ablaze. The Blue Bird warehouse caught fire from flying debris at 11:15 p.m. "If I had been asked to write a list of 100 bad things that could happen, a fire in Wenatchee would not have made the list," Gonsalves said. In addition to the cherry line (a joint venture between Blue Bird and Monson Fruit of Selah, Washington), Blue Bird lost a dedicated organic line of 15 years and 75,000 cartons of packed fruit. Firefighters saved the storage warehouses, including rack storage and a 12-room CA storage building. The harvest continued. In the immediate aftermath, several warehouses offered to receive fruit from Blue Bird's 180 growers, as the co-op transferred key workers and production to its Peshastin facility. Three dedicated lines there operated double shifts through the fall. "Our friends in the industry were invaluable," Gonsalves said. "We had a lot of concern from our grow- ers, but also a lot of cooperation from growers and the industry to keep the harvest going." Insurance Blue Bird had recently re-evaluated its insurance with installation of the new cherry line, which Gonsalves noted was key to the co-op's quick recovery. Blue Bird hired a third-party appraiser to evaluate its facilities and level of insurance coverage. Ultimately the co-op carried an umbrella policy for the Wenatchee property, plant, and equipment with an $85 million limit. Losses were only around $40 million with the remaining buildings saved from the fire. The fruit business is complex, with many moving parts and high risk. Analyzing the risk, crop size, and expected market price make valuing fruit difficult. It's also a per- ishable product, so a disaster—whether it's man-made or natural—poses added concerns, said Doug Darlington, partner at MCM, an insurance brokerage firm based in Seattle. It's paramount to get updated valuations, he said. Too often, producers and packers add to their portfolios quickly and don't update their values, particularly at the busiest time of year—summer—that is also a prime time for wildfires. "It's important to re-evaluate your value and exposure regularly. Nobody wants to think about paying excessive insurance charges, but the ability to recover from a major loss is totally dependent on the adequacy of your cov- erage," he said. "And like any homeowner, you'd better have limits to support the value you want to replace." An insurance broker should have industry knowl- edge and an agricultural background and talk with you AFTER THE FIRES "Our friends in the industry were invaluable. We had a lot of concern from our growers, but also a lot of cooperation from growers and the industry to keep the harvest going." —Ron Gonsalves TJ MULLINAX/GOOD FRUIT GROWER One of Chelan Fruit's facilities along Howser Road in Chelan, Washington, after it was lost in an August wildfire. While the co-op lost around $60 million in building and equipment, it was able to rent additional storage to handle all of its fruit from the 300 growers it serves. Chelan Fruit is already looking at new technologies—with particular focus on robotics—as it rebuilds. SHANNON DININNY/GOOD FRUIT GROWER Ron Gonsalves, Blue Bird President, stands amid the rack storage of a warehouse that survived a wildfire in Wenatchee, Washington. Continued on Page 12

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