Cranberry Stressline Archives

Sept 6 - 19, 2000

Globe explores roots of cranberry crisis

9/19/00 Today's Boston Globe has a provocative article about the causes of the cranberry crisis. Writing of the high prices paid to growers in 1996, columnist David Warsh writes "the shortage that year might have led space-travelers to plant cranberries on the moon. 'Forget Cows and Corn,' wrote Barbara Carton of The Wall Street Journal in the summer of 1997 under the memorable headline 'Bog Heaven.' It continued: 'Let's Bet the Farm on Cranberry Crops - Surge in Fruit's Price Brings a Gold-Rush Mentality; Will Cran-Bubble Burst? - Even Fergie Puckers Up.' "

As to the controversies surrounding Ocean Spray and Northland Cranberries, Warsh writes: 

"Among local growers, there are suspicions that the sources of the current crash in prices may go beyond the elemental forces of supply and demand. The Ocean Spray cooperative, headquartered in Lakeville, is increasingly dominated by its larger members - many of them in located in Wisconsin and Quebec. Ocean Spray is engaged in bitter competition with its rival Northland. Big buyers like Coca Cola have sought to muscle in.

"Has there been deliberate dumping of frozen product by Ocean Spray, in an attempt to turn 'red gold' into red ink that Northland can ill afford? ' The Spray' enjoys unique price-setting power under the 78-year-old Capper-Volstead Act, which exempted agricultural cooperatives from the Sherman Act. Small growers are searching for a ' smoking gun.' Meanwhile, the Massachusetts cranberry industry is drying up. More than one-quarter of its 450 growers are thought to be on the verge of giving up. When elephants fight, the grass gets trampled."

from the Boston Globe


Competing in the new "un-cola wars"

9/19/00 New York Times business reporter Constance Hays, who has written about the cranberry crisis, begins her article about the Cadbury Schweppes purchase of Snapple from Triarc that "the first salvo in what may become known as the un- cola wars was fired yesterday when Cadbury Schweppes confirmed that it would buy Snapple, Mistic and other brands from the Triarc Companies."

She notes that Coke and Pepsi, facing flat returns in the carbonated beverages category, may be "perceived as falling behind in the fast-growing noncarbonated beverage category." 

Hays quotes Bill Pecoriello, a beverage analyst for Sanford C. Bernstein & Company:  "this kicks up the pressure on Coke and Pepsi to aggressively go after the segment."

New York Times


Op-Ed

A proposal from Cliffstar, Decas, Hiller and Pappas

9/18/00 -- Since the Cranberry Stressline has reported the proposed amendment which was discussed at the Cranberry Marketing Order Committee regarding volume control, we are writing to provide greater detail for the benefit of Stressline readers and all growers in general. By doing so, we hope to generate support for this proposal. Continued

 

 

Editorial comments:

Cranberry growers be damned

9/17/00 "Let the farmer, so far as I am concerned, be damned forevermore. To Hell with him, and bad luck to him. He is a tedious fraud and ignoramus, a cheap rogue and hypocrite, the eternal Jack of the human pack. He deserves all that he ever suffers under our economic system, and more. Any city man, not insane, who sheds tears for him is shedding tears of the crocodile.

"No more grasping, selfish and dishonest mammal, indeed, is known to students of the Anthropoidea*.
When the going is good for him he robs the rest of us up to the extreme limit of our endurance; when the going is bad he comes bawling for help out of the public till. Has anyone ever heard of a farmer making any sacrifice of his own interests, however slight, to the common good? Has any one ever heard of a farmer practicing or advocating any political idea that was not absolutely self-seeking--that was not, in fact, deliberately designed to loot the rest of us to his gain?"

H. L. Mencken as quoted in  "Tedious Fraud: Reagan's farm policy and the politics of agricultural marketing orders "

*Anthropoidea is a suborder of primates including chimpanzees, gorillas and orangautans.

Conservative group critical of aid to cranberry growers

9/17/00 Ed. comment: Peter Sperry is one of several journalists like Robert D. Hershey (see right) who believes that the marketplace alone should decide which farmers survive and which farmers go under. 

9/14/00 In an article in the Milwaukee Journal Sentinel, Peter Sperry of the conservative Heritage Foundation, criticized the plan to help cranberry growers with, among other things, direct cash payments as bad for both taxpayers because of the cost,  and for growers because it delays an inevitable industry shakeout. He is quoted as saying that growers are "in a position right now where they really should be looking to transition to other industries... there are more people in the industry than there is a market for their product." Sperry is the author of Governing Less to Govern Best. He believes that the USDA has outlived its purpose, writing "the U.S. Department of Agriculture was established in 1862 when over 80 percent of all American families earned their living from the land. Less than 1 percent of Americans (3 million) operate farms today. Most of the USDA's programs could be eliminated or consolidated within the Department of the Interior." In addition to his deriding Federal programs to help cranberry growers, he criticizes the following government agriculture programs: $500,000 for apple fire blight; $5,786,000 for wood utilization research; $150,000 for swine waste management; $100,000 for Vidalia onions and $220,000 for low bush blueberry research. 

Milwaukee Journal Sentinel Article

9/17/00 If anything is going to derail attempts to utilize a small percentage of the some $22 billion that the government pays to farmers under various programs to help cranberry growers remain in business until the crisis is resolved, it will be the association of this aid with other less popular programs. 

Robert D. Hershey laments the lack of "self reliance" of American farmers when he points out that government money accounts for 40% of farmers' net income in his article entitled "On the Farm: Subsidies Continue to Flourish" in today's New York Times

Hershey, who apparently doesn't have any use for economic aid  to farmers under any circumstances, writes "farmers hold a special place in the American psyche, and Congress is particularly reluctant to stint on relief in a presidential election year." Perhaps he would agree with Mencken (see quote on left). It is true that there are a few multi-millionaire cranberry growers and also true that these growers do control Ocean Spray with the one vote, one share rule. However, the large majority of cranberry growers are small farmers. They don't have a house in the Sun Belt to take a second mortgage out on. They probably already have second or even third household jobs, and still to avoid going under they will have to dip into junior's college fund or deplete money they counted on for retirement.

These are hardly the farmers depicted in the articles decrying government assistance to cranberry growers. 

Bailout?

9/15/00 Recent news articles suggest that cranberry growers are seeking a "bailout." Nothing could be further from the truth. Cranberry growers are hoping for government assistance, not a bailout. The government bailed out Chrysler*;  they are not, nor can they or should they, be bailing out the cranberry industry.

Federal dollars will not end the cranberry crisis. However, the proposed aid is crucial in turning the industry around, expanding markets and bringing demand more in line with supply, while allowing farmers to weather the down time.  Cranberry growers are prepared to tighten their belts and sacrifice in order to assure that the United States remains a world player in cranberries.

The government, of course, is funded by taxpayers. Cranberry growers are taxpayers like everyone else. We pay for education, the military, and numerous programs designed to help everyone. As Peter Sperry points out in his comments to the Milwaukee Journal Sentinel, less then 1% of all Americans are farmers today. What he doesn't discuss is that the United States in losing most of the agrarian way of life has lost a vital part of its culture. This is probably of little consequence to him. He also doesn't discuss the fact that we have lost in the agriculture marketplace to other countries.

Cranberries may be a small crop, but then we aren't talking about an aid package that will break the bank. We are talking about asking our fellow citizens, through their elected representatives, to help us reestablish the cranberry industry and make it viable on the world market in the 21st century.

* After losing $200 million in one quarter, the government loaned Chrysler $1.5 billion in 1979, and was severely criticized by some groups for doing so.


9/9/00 Northland
press release

Northland Cranberries, Inc. Refutes Allegations Made by Cliffstar Regarding Sale of Private Label Juice Business

WISCONSIN RAPIDS, Wis., Sept. 8 /PRNewswire/ -- Northland (Nasdaq: CBRYA) Chairman and Chief Executive Officer John Swendrowski responded today to a press release issued Wednesday by Cliffstar Corporation regarding its federal court filing in connection with the ongoing dispute over the sale of Northland's private label juice business to Cliffstar.

"We find both Cliffstar's announcement and its timing quite peculiar. The allegations made by Cliffstar are the same allegations made in a lawsuit filed by Cliffstar in federal court in New York in July, which Cliffstar voluntarily dismissed on September 1, 2000. Cliffstar's filing yesterday in federal court in Chicago was in fact made in response to a lawsuit filed by Northland over a month ago against Cliffstar for breach of Cliffstar's obligations to make required payments to Northland."

On July 31, 2000, Northland sued Cliffstar for substantial damages and equitable relief in the federal court for the Northern District of Illinois for Cliffstar's failure to make its required payments on the promissory note issued by Cliffstar in the purchase of Northland's private label juice business, Cliffstar's failure to make its required payments when due for cranberry concentrate purchased from Northland and Cliffstar's breach of the terms of the purchase agreement for the private label juice business. Northland also sought declaratory relief that it had not breached its obligations and representations and warranties under the purchase agreement as Cliffstar has claimed. CONTINUED


In the news:

9/6/00: More on Tri-Valley growers

USDA increasing aid for cranberry growers, industry at risk from low prices, failures forecast

9/3/00 "Despite the federal government's best remedial efforts, the cranberry industry won't be out of the woods for at least two years, said (Gus) Schumacher, the USDA undersecretary. ' If, that is, we can refinance enough growers and lift exports.' " Boston Globe South Weekly


Home

In the news:

Farmers battling grocery fees

9/15/00 From an A.P. story: "To farmers like David Moore, it's bad enough that supermarkets sell a bag of carrots or bag of potatoes for three to four times what they're paid to grow them. Now farmers say they're having to pay stores just to get (them to) carry their produce."

Article


Another grapefruit health warning

9/13/00 Prior medical studies have warned that grapefruit juice might alter the absorption of certain prescription medications. A new study just published in the Mayo Clinic Proceedings has found that "unlike other citrus juices, grapefruit juice inhibits one of the body's intestinal enzyme systems and can result in marked increases in serum levels of some prescription drugs, such as those to treat heart disease and control blood pressure." Read Reuters News article | Read actual article in PDF format


Rumor of another food merger

9/9/00 The New York Times printed a Reuters story, Quaker, Kellogg Shares Up on Merger Rumor, which noted that both companies stock climbed as a result of rumors that a merger between the two cereal giants might be in the offing. The rumor was met by the typical corporate "no comments" by company representatives. However, the Reuter's article quotes experts who note that merging the two product lines would provide "synergies" in the market and that "Kelloggs has to do something to get itself out of a rut."

Quakers is of interest to cranberry growers, particularly those associated with Ocean Spray, because as recently as last year they were looking into the possibility of acquiring Ocean Spray should it become available. In reference to an acquisition, Quaker president and CEO Robert Morrison expressed confidence that his company could go it alone in the face of the trend towards mergers in the food industry, and is quoted as saying "the real question is what are the combinations going to generate beyond short-term cost sayings... the other is what price do you pay?"


9/8/00: Related newspaper story

Cliffstar press release:

Cliffstar Corporation Accuses Northland Cranberries of Fraud In $28 Million Sale of Private Label Business

Editors note: This appears to be the same law suit that was filed by Cliffstar in New York state, which has now been moved to the Chicago district.

CHICAGO--(BUSINESS WIRE)--Sept. 6, 2000--In a filing in Federal Court yesterday, Cliffstar Corporation, a manufacturer and processor of private label fruit juice products, accused Northland Cranberries, a manufacturer and marketer of fruit juice products, of fraud, bad faith, breach of contract, and tortious interference in the $28 million sale of Northland's private label juice business to Cliffstar in March 2000. 
CONTINUED