Making Fall

The Farm Decisions Supporting Pumpkin Spice Season

The pumpkin spiced latte you enjoyed this morning has been on its way to you for months.  Same with the cinnamon scented candle you purchased last week and the pumpkins decorating your front porch.  They are all part of fall supply chains supported by farm decisions that operators began making last spring.

Iconic items we equate with the fall season seem to appear on the shelves exactly when we begin craving them.  That’s because just in time deliveries are backed by complex supply chains. Most of what makes up our fall experiences started its journey along a chain almost a year ago.  The demand spike for all things pumpkin is expected, but preparing to meet it is an involved process.

Processed Pumpkins Versus Decorative Pumpkins

Pumpkin crops in the United States are valued at approximately $275 million but generate over $1 billion in product sales.  The market encompasses some 15,000 farms. From small and mid-sized operations to commercial production these farms span all fifty states. Pumpkin production has doubled since 2001 and in that growth has developed two distinct categories which drive demand, each with its own journey to consumers.

Processed pumpkins make their way into food production as pie fillings and syrups while decorative pumpkins make their way to fresh markets. Currently, 85% of pumpkins grown in the U.S. end up in fresh markets and only 15% are sold into food production.  The demand ratio has always leaned toward fresh market pumpkins, but processed demand has increased by 7% since 2003, the year that Starbucks first launched its pumpkin spiced latte.  Their latte was a gamble, but in the end it was a win for the coffee company and is still influencing the pumpkin growing industry in the U.S.

What Kind of Pumpkins Should Farmers Plant?

Although the latte didn’t actually have pumpkin in it until 2015, the pumpkin spice season took the fall experience to a whole new level and, in turn, created more markets for pumpkins.  If it seems like there are more pumpkin varieties available at your local farmers market or even your grocery store, that's because growers are catering to a demand for unique fall decorations and flavors.  It's still easy to find the bright orange pumpkins used for carving jack-o-lanterns, but these days consumers also want pumpkins in a variety of colors, shapes, sizes and flavors.  

Since the traditional pumpkin pie has been joined by pumpkin coffee creamers, sliced pumpkin breads and pumpkin based soups, farmers don’t have to grow decorative pumpkins at all.  The expanding demand for unique options extends to specialty flavors too. Pumpkin farms can exist just to produce sweeter varieties used in foods and flavorings.  In fact, an increasing number of farmers see the processed market as the more lucrative option in the long run. 

Choosing what type of pumpkin to grow considers everything from temperatures to market locations, and ultimately farmers want to make a profit off of their crops.  With 85% of pumpkin yields going directly to fresh markets, growing decorative pumpkins seems like the way to go. The season itself is predictable and demand continues to rise.  However, farmers who grow these varieties have their own set of expenses.  

Beyond purchasing seeds, decorative pumpkins have to be attractive to the eye and farmers spend a lot to keep the pests away, initiating management strategies early and often.  These pumpkin varieties tend to be manually harvested, sorted and loaded on trucks.  They are handled three to four times by a person before making it to market and therefore, incurring a larger labor cost.  For pumpkins being shipped from field to market, the cost of freight varies from year to year making a crop that was profitable one season barely break even the next.  Since pumpkins can’t exactly be shipped like crates of canned goods and there’s no way to know exactly how many pumpkins can fit in a crate and how much each crate will weigh, the transport process is full of cost variables.

Processing pumpkins, on the other hand, offer a more predictable journey.  These varieties are easier to harvest with equipment that can cut fruit away from the vine, separate leaves from fruit and transfer into shippable crates all during one swipe across a field.  Pumpkin processing plants have increased processing capacity to meet growing flavor demands through automated technology making it easier to clean, dry, puree and package the fruit; especially in preparation for demand surges.  And in the off season, pumpkin supplies can be added to dog foods and other items that maintain year round demand.

The Shelf Life of Pumpkins and Pumpkin Products

Who makes more money, the farmer who grows pumpkins for decorations, or the farmer who grows pumpkins for consumption?  According to the American Farm Bureau, decorative pumpkins still rake in more money, earning a farmer between $.08 and $.32 per pound.  Processing pumpkins average about $.05 per pound.  

This might have everything to do with the fact that decorative pumpkins are only wanted for a limited time and can only sit on your porch or mantle for so long until the decay begins.  Processed items like the syrup used in your morning coffee or the tin of pie filling used for that Thanksgiving pie have much longer shelf lives.  Even though they might be purchased during a limited time marketing campaign, the actual product has been in the pipeline for much longer and can stay there even when fall comes to an end.

In Illinois, where more farmers produce processed pumpkins than decorative pumpkins the ratio stems from state policy.  Illinois will insure pumpkin crops that have existing contracts with processors. This isn’t the norm, nor is it likely to be in states where growing conditions are less favorable and processing plants are far away.  But in Illinois, it makes the processing option slightly more lucrative.

In the end, farmers still have to consider what the consumer is willing to pay for a pumpkin or a beverage that tastes like pumpkin.