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First Pioneer: growers have until July to make spring payments

4/29/00 According to an article in the Patriot Ledger, First Pioneer Farm Credit, the primary mortgage lender to Massachusetts cranberry growers with about 300 customers, has deferred payments due in April, May and June until July. The bank will use the next three months to develop a strategy for helping growers. According to Bill Kiernan, the vice president charged with working with cranberry growers, (the three months) "will give us time to develop an economic forecast for the industry. In July, we can decide what we can do for growers still unable to make payments. Interest-only payments and additional lending are possible options."

According to the Patriot Ledger, Kiernan expects that the cranberry crisis could bankrupt some grower if prices don't increase; but the bank would work with growers to develop options to help them through the crisis such as extending the length of their loans and accepting other assets as collateral. He went on to say "we have a 'no surprises' lending policy, we tell it like it is. If someone's not going to make it, we let them know." Kiernan says the bank considers $40.00 per barrel the break-even price and that "we never envisioned the would drop to $8 per barrel." According to the article "Kiernan expects Massachusetts could lose up to 40 percent of its cranberry industry in the next five to 10 years as Wisconsin expands its acreage."

David Farrimond, director of the Cranberry Marketing Committee considers Canadian cranberry growers to be the most likely to survive the crisis because their cost of production is about $7.25 (see correction below) and their yields are as high or higher than Wisconsin's.

Even though the Federal Government spent billions saving the dairy industry years ago, both Farrimond and Kiernan doubt a successful political campaign could be mounted to have the government allocate the $500,000 needed to turn the cranberry crisis around, even though there is $9 billion available for farm disaster relief.

According to Farrimond "The Cape Cod Cranberry Growers Association or a similar group would be the catalyst for such an effort, but I don't hear anyone pushing for that so far. It's most effective in an election year like this one, but it would take time to mobilize such an effort.''

Read Patriot Ledger article HERE

5/1/00 Correction: David Farrimond was told in his most recent visit to Quebec that the approximate cost of growing cranberries there was $25.00 per barrel. The $7.25 figure attributed to him in a quote in the Patriot Ledger is incorrect. However, according to Farrimond,  Canadian cranberry growers enjoy many  benefits not available to growers in the United States which give them a competitive edge.

Last Week

Former board member speaks out

4/29/00 Former Ocean Spray board member Jeffrey Kapell was interviewed for an article entitled "Cranberry country in crisis" by Charles Mathewson, published in the April 27, 1999 MPP newspapers. MPG publishes twelve weeklies covering the Massachusetts south shore area.

Speaking of new CEO Robert Hawthorne, Kapell is quoted as follows:

"What this new guy articulates is he's a leader. But he's delivering the worst news you can you can get. He knows marketing and he's turned around other companies. He will be honest with us and that's so refreshingly new to growers. It's a relief to have someone who not only knows what he's doing but will be square with us. The question is, how fast will he be able to turn things around and how many of us will be left."

Ocean Spray grower Jack Angley, a member of the board of the Cape Cod Cranberry Growers' Association, who is frequently interviewed by the media, is also quoted:

"It was hubris that got us here. Ocean Spray had overconfidence in its ability to market fruit. They were so convinced that they had the marketing operation in place, management made generous incentive for new acreage. There was a great rush of demand for cranberries in the early '90s. Ocean Spray used up that demand by increasing the supply. Independents responded by absolutely going off the charts with new acreage. As all these acres matured, Ocean Spray didn't have the resources to keep an orderly market."

The article also addressed the issue of how the cranberry crisis can effect property taxes:

"The sudden demise of the cranberry industry could effect property taxes. The state's department of revenue values bog land at $17,570 an acre. Next year's valuation will certainly decrease to reflect the loss in value of the crop. That will force taxes on non-bog land to increase."

The crisis in the cranberry industry and its effect on cranberry growers and the on local community is being well documented in the media in Massachusetts. Most or all of the local television stations have had reports on cranberry news. All of the numerous newspapers in the area cover it extensively, and most have reporters specifically assigned to the story. Articles generally include human interest interviews, with many poignant examples of the plight of growers and their families. Farmers who are fiercely protective of their their privacy* now find that virtually "everybody knows their business." They used to resent people asking them "how many acres do you have," when the real question was an unthinkably rude "how much do you earn a year?"  Now acquaintances are more likely to ask whether growers have taken a second job yet, or just look at them with what might seem like pity or ingenuous sympathy, and ask "how are you doing?" These are not comfortable questions for the proud and self-sufficient farmer.  HB

* This isn't to say that all farmers are repelled by "others knowing their business." I wrote about self-disclosure in the Introduction to the Farm Stress section of this web site and again in an article entitled Personality styles and how you cope with stress.

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