Del Monte Fresh Produce Inc. will plant its last pineapple plant in Hawaii on Feb. 19, beginning its exit from the pineapple production in the state, which will come about 18 months later when that plant is ready for harvest. Del Monte has been growing pineapples in Hawaii since 1916.

In a statement released Wednesday, Feb. 1, the company said that it was no longer economically feasible to grow pineapples in Hawaii because of the high cost of labor and other inputs. "As a result of increased planting of pineapple at lower costs in other parts of the world, the company believes that it will not be economically feasible to continue to produce pineapples in Hawaii. In fact, it would be cheaper for Del Monte to buy pineapples on the open market than for the company to grow, market and distribute Hawaiian pineapple,'' the statement said.

The firm also said that it had trouble reaching a long-term lease agreement with the landowner. Del Monte is one of three firms that still grows and markets pineapples from Hawaii. Dole Fresh Fruit Co. and Del Monte have long grown their pineapples on leased land on the island of Oahu. Dole farms on 3,000 acres. Maui Pineapple Co. is Hawaii's largest pineapple producer, and it grows 6,000 acres of fruit on its own land on the island of Maui.

Maui Pineapple President Brian Nishida was quoted as saying that the closure of Del Monte's Oahu plantation will have no impact on his firm's operation. However, a story in a Honolulu newspaper speculated that Maui Pineapple might be a potential lessor of the Del Monte land on Oahu. That same article speculated that Dole could also lease the land and expand its Hawaiian pineapple operation. Dole, however, also was quoted as saying that it had no expectations of expanding or decreasing its Hawaiian pineapple operations.

A source close to the Hawaiian pineapple industry who asked not to be identified explained that the costs associated with Hawaiian production are much higher than in other locations. Del Monte is a large producer of pineapple in Costa Rica, while Dole has major operations in Ecuador. Maui Pineapple, while the largest producer in Maui, has no operations outside that region and thus its total pineapple production is dwarfed by that of the two larger, multinational companies.

In fact, Mr. Nishida of Maui Pineapple pointed to this difference in the article in which he was quoted. He said that the decision by Del Monte to leave Hawaii is a "demonstration that the business model of the multinational commodity approach doesn't necessarily work."

Besides owning its own land, which is an advantage, Maui Pineapple operates a cannery facility, which gives it a home for its sub-par fruit. Neither Dole nor Del Monte has cannery operations in Hawaii anymore.

The Produce News source said that the high cost of labor and transportation as well as the soaring land costs in Hawaii were most likely the major factors in the Del Monte decision. He estimated that the pineapple companies in Hawaii pay well in excess of $10 per hour for their labor, which is much greater than is paid in Costa Rica or Ecuador. In addition, he said that pineapples from South America and Central America hitchhike on company-owned banana ships to the United States and other destinations, while pineapples shipped from Hawaii must be transported on commercial liners.

Because of the increasing pineapple production from Central America and South America over the last two decades and their relative freight advantage, Hawaiian pineapples have been strictly a western U.S. product for many years. "You'd be hard pressed to find a Hawaiian pineapple east of the Rockies," said The Produce News source. "This [Del Monte] announcement is not going to change anything for East Coast buyers."

He predicted that it would eventually mean that more Costa Rican and Ecuadorian fruit will find its way to western states. The source said that there would be no impact in Hawaii itself, as less than 10 percent of the Hawaii production is marketed within the state. He said that Maui Pineapple and Dole will quickly fill the local void created by Del Monte's eventual departure.

But within Hawaii, there was strong reaction to the Del Monte announcement. Fred Galdones, president of the International Longshore & Warehouse Union Local 142, predicted in one news story that about 700 pineapple workers would lose their jobs. He also expressed concern that the departure of Del Monte might portend things to come. "I hope it's not a domino effect like it was with the sugar companies, where one had closed and the others followed suit," he said.

Hawaii, which once had a booming sugar cane industry, has very little sugar production as high costs sent most firms packing to cheaper production areas. Most of the former sugar cane ground has been developed into homes, hotels and shopping centers.

Last year, Hawaii produced 212,000 tons of pineapples worth an estimated $79 million, according to the U.S. Department of Agriculture.