Argentine fresh deciduous fruit producers continue to face substantial challenges, mainly due to the strained domestic economy, which has negatively impacted their competitiveness, the USDA reports.

In the latest Argentina Deciduous Fruit report by the United States Department of Agriculture, the organization says Argentina's apple and pear production has seen a steep decline in recent years due to the lack of producers. 

According to the National Food Safety and Quality Service (SENASA), there were about 9,000 producers in 2005, but by 2023, that number had dropped to just 1,605.

The sharp reduction can be attributed to multiple factors, including rising production costs, urbanization of agricultural areas, and an aging workforce. However, the remaining producers in the industry tend to be more financially secure and stable.

The primary driver, however, is the rising cost of production. Land, water, and labor expenses have surged in recent years, pushing small-scale producers out of the field due to the competition of larger domestic and international markets. Declining international prices have also forced many deciduous growers out of business.

Another major challenge is the aging workforce.

Many skilled workers in apple and pear production are nearing retirement age, leading to a shortage of qualified labor, which has strained producers' ability to maintain operations.

Urbanization has also reduced the amount of land dedicated to fruit production, as real estate development has become more profitable in certain regions.

However, the sector has adapted by investing in new technologies and production methods, focusing on producing high-quality fruit for domestic and international markets.

The sector is supported by a network of 260 packing plants and 198 cold storage facilities, which handle the fruit's cleaning, sorting, grading, packaging, and storage. Approximately half of the sector's 60,000 direct-hire employees are seasonal migrant workers, primarily from the northern provinces, who travel to the region for the harvest, typically from November to March.

The report says that the recent consolidation of Argentina's apple and pear sector has created a need for increased public and private investment in technological advancements, such as mechanization, improved logistics, and enhanced communication networks, but such investments are unlikely in the near term, due to persistently low prices and high production costs.

Limited access to capital for reinvesting in orchard health and efficiency further hampers productivity improvements.

Many orchards still grow older fruit varieties that are less competitive in the global market than the newer varieties produced by Chile and China, particularly in the apple sector. This poses a challenge on the long-term. 

The report states that the estimated cost to plant a hectare with new fruit varieties, including hail protection and dual purpose irrigation (for watering and frost prevention), is approximately $50,000. The production cost for apples and pears is estimated at $0.37 per kilogram, with 60% of this cost attributed to labor and the remaining 40% allocated to capital, inputs, and services, including energy, transportation, packaging, and phytosanitary certifications.

The report forecast an increase in fresh apple production to 488,000 metric tons (MT) due to favorable weather conditions; and a modest decrease in pear production to 655,000 MT.

Exports are expected to remain steady with apples reaching 82,000 MT and pears at 330,000 MT.

Domestic consumption is forecasted at 409,000 MT for apples and 325,300 MT for pears.

Río Negro province is the leading producer of apples and pears in Argentina.

In 2022, the province accounted for approximately 82% of the country's total production, followed by Neuquén with 15%, and Uco Valley in Mendoza Province contributed the remaining 3%.