Answer: If just the new growth is yellowing it can indicate a need for nutrients. Try feeding your tree. Since it is small you can use a water soluable fertilizer such as Miracle Gro or Peter's, dilute it to the proper strength as recommended on the label and pour the mixture into the watering basin or water well beneath your tree. If you haven't already made a watering basin for your tree, you can simply mound up a few inches of soil in a circle all around the tree about 12" from the trunk. Use this to water your tree by filling the basin, allowing it to drain, then filling it a second time. Once a week is about all your tree will need. Water it throughly then pour the diluted fertilizer into the basin. The basin will concentrate the moisture over the root system and allow it to trickle down and wet the entire root mass.
It isn't unusual for immature fruits to drop this time of year. Peach trees need about 40 leaves per fruit to be able to develop the fruit and still maintain vigor. The tree knows how many fruits it is capable of developing and will thin itself by dropping some of the fruits. As your tree matures it will be able to produce more fruits.
Best wishes with your tree!
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