California farmers must destroy 420,000 peach trees after Del Monte closes its canneries and cancels more than $550 million in long-term contracts

For many warm-weather fruit lovers, the prospect of endlessly ripe, rosy peaches is a mouth-watering prospect. For farmers in central California, it’s more of a waking nightmare.

To stay afloat, these farmers are now weighing whether to destroy about 3,000 acres, or about 420,000 peach trees, following the closure of the Del Monte Food Cannery plant earlier this year. With the closure of the Modesto Del Monte plant, which processed 30 to 35 percent of the state’s clinging peaches, peach farmers are now faced with a surplus of fruit and no one to sell it to. Now, farmers have no choice but to uproot these trees and switch to growing different crops to make up for their losses.

The U.S. Department of Agriculture (USDA) approved $9 million in federal aid to help farmers cut down trees and plant more valuable crops instead, according to a recent press release from California Senator Adam Schiff. The funding comes after more than 40 California lawmakers wrote a letter to Agriculture Secretary Brooke Rollins in March requesting financial assistance for farmers, arguing that USDA intervention is necessary to stabilize the well-being of the region’s multi-generational food growers.

Citing a USDA analysis, Schiff noted that cutting production by 50,000 tons of peaches could save farmers about $30 million in projected losses that would otherwise be wasted as farmers’ largest buyers close.

California Farm Bureau Director Shannon Douglass said in a statement that the funding “provides a glimmer of hope after a devastating time, ensuring California farmers can transition to new crops and stay on their land.”

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Fallen food production giant

Del Monte, a nearly 140-year-old food producer and distributor based in California, filed for bankruptcy in July 2025 and closed canneries in Modesto and Hewson last month. The company has been trying to adapt to changing customer preferences, where customers are no longer choosing canned fruits and vegetables in favor of fresh produce. The company’s troubles intensified as operating costs rose, in part because of tariffs on imported steel used in canning.

According to Del Monte’s bankruptcy court filing, the state’s peach farmers have some fairly long-term contracts to supply the company with fruit, in part because these particular peach trees have a 20-year lifespan and take years to cultivate. The total value of these lost contracts exceeds $550 million.

American farmers already face a host of challenges. The tariffs raise input costs and squeeze some U.S. growers out of global markets. Iran’s war further complicates the situation for farmers as the closure of the Strait of Hormuz disrupts the shipment of about a third of the world’s fertilizers and raises the price of key growing chemicals, forcing some to rethink which crops to grow. Climate change is exacerbating overuse of water and persistent droughts, further reducing crop yields.

Accommodating contract losses

While some farmers and lawmakers celebrated $9 million in peach tree removal aid, growers said adapting to the lost Del Monte contract was easier said than done.

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Yuba County farmers Tony and Laura McGrath told sacramento bees In February, other crops are not as profitable as peaches. Among their 40 acres of peach trees, the couple owns 12 acres of Andros peaches that are under contract with Del Monte for another ten years. They also grow and dehydrate plums and almonds, which are more cost-effective than peaches, but prices fluctuate wildly and require a significant investment of time and money to grow.

“There’s really nothing to move you into,” Tony McGrath said. “The price for walnuts is not great. You can do plums, but it takes seven to eight years to develop it and start recouping it. Almonds, there are a lot of them, too, and it’s very expensive to start an almond orchard.”

This story originally appeared on Fortune.com

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