I have a dwarf peach tree that isn’t producing fruit this year. It’s also sprouting new big shoots from the bottom. Should I prune these new shoots or should I let them continue to grow?
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Looks like these are suckers. Your peach tree consists of a top bit (called the scion) grafted onto a rootstock. You can see the graft just above the compost level. Any shoots appearing below the graft are suckers and should be removed. If you don't do this, the tree will revert to its rootstock, which you don't want. Cut the suckers hard back to the stem, or just cleanly tear them off.
Yes get rid of that new shoot. That is too close to the ground for a stone fruit tree.
You want the peach tree to have a more upward growth, with plenty of airflow below to discourage pests and excess moisture. Keep all branches above a foot or two the ground/soil.
You want to do pruning during times of slow or no growth - like in winter or very early spring. Late summer when growth has slowed or stopped is a permissible time for pruning too.
Allow just 2 or 3 main branches for this tree to grow. And as mentioned, eliminate excess shoots and branches moving straight-up vertically.
Be careful with young trees though. Removing too many branches, leaves too quickly will stress the tree out.
All the best to you and your peach tree!