Martinelli’s contract cuts force California apple growers to remove apple orchards

Apple growers in California’s Pajaro Valley are removing orchards and reassessing their operations after S. Martinelli & Company terminated contracts with local suppliers, ending a long-standing relationship that many farmers say sustained the region’s apple industry for more than a century.

The decision has left dozens of growers scrambling for alternatives in the fertile agricultural corridor between Santa Cruz and Monterey counties. Some farmers have already begun bulldozing apple trees to make way for more profitable crops or to lease land to berry producers, according to reporting by SFGATE and Lookout Santa Cruz. Local growers said the move threatens the future of small family farms that relied heavily on Martinelli’s purchases of Newtown pippin apples, a variety closely associated with the company’s apple juice and cider products.

Martinelli’s declined to disclose details about the number of contracts affected or its procurement plans. Chief Executive Officer Gun Ruder told SFGATE that the company remains committed to sourcing apples from the Pajaro Valley but would not discuss its sourcing strategy or internal operations. Industry observers cited by local media suggested the company may be seeking lower-cost fruit from outside California. According to Santa Cruz County’s latest crop report, local apples sold for about $400 per ton in 2024, compared with roughly $135 per ton for apples sourced from Washington state.

The contract cancellations echo broader challenges facing California’s processing-fruit sector. Earlier this year, growers in Central California sought federal assistance after Del Monte closed processing facilities and canceled long-term contracts with clingstone peach producers, a move expected to result in hundreds of millions of dollars in lost revenue. Pajaro Valley farmers fear similar economic consequences, including reduced employment for orchard workers, pruning crews, and cold-storage operators that support the region’s apple industry.

Some growers had already diversified away from Martinelli’s in recent years. Noah Gizdich of Gizdich Ranch said his family farm expanded into direct-to-consumer sales and U-pick operations after decades of supplying the company. Karell Reader, owner of Luz del Valle Farm in Watsonville, said she and her husband also shifted toward a U-pick business after noticing increasing deliveries from out-of-state apple suppliers.

“We saw the writing on the wall,” Reader told SFGATE. “I don’t think anyone wanted to believe they would be betrayed.”

Source: SFGATE report