We spoke with Peter Stengel, a cherry producer for over 20 years and Legal Representative and General Manager of Fistur. He currently has 80 hectares of cherries in production and 35 in training in the Yumbel area in the BioBío region. How was the recent season for producers in the central-southern and southern areas of Chile? We tell you about it below.
We interrupted Peter Stengel in the middle of his workday; we wanted to hear first-hand what the recent season was like for those who didn't manage to get their fruit before the Chinese New Year. And we wanted to know how they'll face the next season, when this oriental holiday that marks the peak cherry consumption in China will be celebrated 10 days earlier than this year, creating a complex scenario.
Peter Stengel has been a cherry producer for over two decades. He currently has 80 hectares in production with different varieties, including Lapins, Kordia, Regina and Sweetheart, as well as another 35 hectares in training (Kordia and Santina). Seven years ago, he did what many thought was crazy: he planted Santina in the Yumbel area.
“When I planted the Santina in 2015, all the producers in the area told me that this gringo is crazy, how can he plant an early variety in the south of the country? And I planted it because I needed my harvest curve to start earlier, but not thinking about the fact that the early fruit would be worth more, but thinking about having labor in the field hired before the other companies came in, and so they were all hired by Fistur and it was much more difficult for them to migrate to other cherry producers, so with that I assured my harvest and production,” explained Peter Stengel.
However, what started as a strategy to address a problem that has been affecting the agricultural sector for several years has become a real productive success.
“I have been lucky that these last three years, being extremely difficult seasons for the central-southern and southern areas of Chile, because the fruit after the Chinese New Year has been very complex to market, we have managed to get out with 60% of our production before the Chinese New Year by applying a maximum tandem of Dormex plus Erger. Last year we planted 35 more hectares of cherries, where the main variety is Kordia, we are aiming for premium varieties because we have taken the Kordia production a little further, so we are very happy, obviously with a tremendous challenge, these have been very difficult seasons and the next one will be too,” Stengel noted.
2021-22 season: A campaign to forget?
The last three cherry seasons have presented various complications, from problems caused by the pandemic to the logistical crisis experienced in the recent campaign.
“The 2019-20 season was Covid, the 20-21 season was the fake news, that supposedly a trace of Covid had been found in some box and that generated a disaster at the level of demand there in China, and this year, 21-22, we had a huge logistical problem, we had ships booked and overnight they told you that they couldn't leave because they had part of the crew with Covid and they had to change the crew, and that happened with all the shipping companies, with all the shipments,” said Pedro Stengel.
Problems during this campaign were recorded both in Chile and in China, the main destination for national cherries.
“When you had an average transit time of 25 to 30 days for a ship, this year it was 45-50 days on average, it was terrible; add to this that when the container arrived in China, the logistical problem in the port system was also tremendously difficult because they had no trucks, customs became very complicated with the control of viruses, so they released only 150 or 200 containers a day and a traffic jam was generated; you arrived on January 19, very good to arrive before the Chinese New Year to sell your fruit, but it turns out that you could not leave before January 29-30 and with that you were not able to sell the fruit before the Chinese New Year, so the problem was really gigantic”, said the cherry producer and General Manager of Fistur.
As usual, the prices of Chilean cherries before the Chinese New Year in the Asian giant were radically different from those after this holiday, which in 2022 was celebrated on February 1.
“Once again, prices before this holiday were very good. In fact, for the central area, from Curicó to the north, the season was extraordinary in terms of prices and quality as well, but for the central-southern area, prices were very bad. We were able to sell a very small percentage of our production before the Chinese New Year. In my particular case, Fistur, thanks to the fact that we have Santina, and we have had a maximum tandem use between Dormex and Erger, we have been able to sell 60 percent of our production before the Chinese New Year and 40 percent after that holiday, and that has allowed us to get through these last three seasons, so to speak, in a good way.” Stengel explained.
2022-23 campaign: Who will make it before the Chinese New Year?
“We are facing a very complex fourth season, for some it will be like a 'knock out', because if you do the normal math, without having logistics problems in between, the fruit harvested on December 10 will be the last to be able to arrive well before the Chinese New Year, and in the area of Yumbel, Los Angeles, Chillán, most of the orchards go into production on December 8-9-10, so again it will be a season in which the fruit will arrive after the Chinese New Year. God willing the logistical problems will not be as serious, although everyone says it will be just as serious as the previous one in terms of logistics,” stated the General Manager of Fistur.
In addition to the problems of labor shortages, shipping, and transportation, there were also exhaustive virus controls in Chinese ports, which further delayed the arrival of the fruit at its destination.
“We hope that the Chilean SAG and its Chinese counterpart reach a good agreement and can generate a protocol so that there is no traffic jam at the Chinese customs and that the arriving ship can be cleared through customs in a normal time, which is 2 or 3 days, and in this way a normal sales flow can be generated, because when that sales flow begins to slow down, a traffic jam begins to form, a bottleneck, and this bottleneck means that when fresh fruit arrives, after the Chinese New Year, it is hampered by the sale of old containers that customers have to sell; this is a bottleneck that is being generated and we hope that it does not happen again because otherwise it would be another disastrous season for the central-southern area of Chile,” lamented Peter Stengel, a cherry producer from the Yumbel area.
New markets, air transport, etc.: What is the best strategy?
Cherry producers are considering various strategies to face this Chinese New Year, which in 2023 will be celebrated on January 22, 10 days earlier than in 2022. From advancing the harvest, air transport, a maritime-air mix, and even diversifying markets are some of the alternatives.
“There are certain things that can be done to try to avoid arriving with the fruit after the Chinese New Year. You can hire an air charter to be able to fly the fruit that you produce between December 20-25 or January 5-10. If you fly that fruit you will be able to arrive on January 15-18 to the market, before the Chinese New Year, but that brings tremendous uncertainty, because the cost of air freight is enormous and if the price is bad you will not be able to even cover the cost. There is another possibility and it is to do a maritime-air mix, go by ship to the US and then by plane from the US to China. We are evaluating all those alternatives as a company. And obviously going to other markets is an alternative that we began to explore three years ago. We are selling fruit to Europe at a rate of 8-6 pallets per week by plane and one container per week starting in week 50, because Europe wants the fruit as late as possible.” said Peter Stengel.
The idea of diversifying markets is gaining more and more strength, even Asoex has stated that it is an urgent need, however, according to Peter Stengel, there is fear among exporters regarding this possibility: “Exporters often do not dare to do so, because if the price in China were to be good, and if in order to try to get out of the risk of China you sent the producer to the United States or Europe and they paid you USD 3, but it turns out that China was good and paid you USD 7, the producer will complain, then you would have to answer that it was because you had to get out of the risk; it is very difficult to make a decision and here you have to be very transparent and communicative and talk to the producers and give them some alternatives so that they have the possibility of accessing the decision-making, jointly, towards which markets to go.
One of the problems that should become less serious in the next season is the shortage of labor, considering that there will no longer be state subsidies associated with the social and economic crisis caused by the pandemic.
“We hope that it will be a normal season in terms of labor, because everything indicates that the IFE Universal will not be back and the 10 percent withdrawals will not be back either and that means that people will have to go out to work to make ends meet, and we in the fruit sector offer a tremendous job offer between the months of November to March, so we hope that at least in the labor factor it will be a normal season,” Stengel emphasized.
Finally, the producer from the Yumbel area called for calm in the face of the problems that have occurred in recent seasons and the complex scenario that is predicted for the 2022-23 cherry campaign.
“The worst thing about being an entrepreneur is making rash decisions. I have seen many producers who are going to tear down orchards, who are not going to harvest Regina, which is the variety that has had the most problems. I believe that by doing things right, the cherry industry will last for many more years.”, concluded Pedro Stengel, Cherry Producer and General Manager of Fistur.
