Answer: What you report sounds like the symptoms of peach leaf curl, a disease caused by the fungus Taphrina deformans. Peach leaf curl affects the blossoms, fruit, leaves, and shoots of peaches, ornamental flowering peaches, and nectarines, and is one of the most common disease problems for backyard gardeners. The distorted, reddened foliage that it causes is easily seen in spring. When severe, the disease can reduce fruit production substantially.
Leaf curl first appears in spring as reddish areas on developing leaves. These areas become thickened and puckered, causing leaves to curl and severely distort. The thickened areas turn yellowish gray and velvety as spores are produced on the surface by the leaf curl fungus. Affected leaves later turn yellow or brown and can remain on the tree or may fall off; they are replaced by a second set of leaves that develop more normally unless wet weather continues. The loss of leaves and the production of a second set result in decreased tree growth and fruit production.
To prevent peach leaf curl, treat peach and nectarine trees every year after leaves have fallen (late November). Copper-based fungicides including Bordeaux mixture (a slurry made of hydrated lime and copper sulfate (called Bordeaux Mixture. If timed properly, a single fall/winter spray will normally prevent losses.
In areas of high spring rainfall or when spring rainfall is abundant, it may be advisable to apply a second copper spray or a lime sulfur treatment in spring, preferably before buds begin to swell, but definitely before budbreak (when green color is first visible). Fungicides containing chlorothalonil also work well at this time.
Although symptoms of leaf curl are seen primarily in spring as new leaves develop, there is little you can do to control the disease at this time. Some people remove diseased leaves or prune infected shoots, but this has not been shown to improve control. (Pruning in fall, however, can reduce the spore inoculum overwintering on the tree.) Normally, diseased leaves fall off within a few weeks and are replaced by new healthy leaves, unless it is rainy. If leaf curl symptoms occurred on your trees in spring, be sure to treat the following fall, around late November, to prevent more serious losses the next year.
Best wishes with your garden!
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