Republished with permission

Local Growers adjust to marketing order with resignation

By KAREN DUSEK

Special Writer

Middleboro Gazette

7/5/01 - "It's done. Now we'll find ways to deal with it ...You have to play the hand you're dealt," said local cranberry grower Betty Brown in response to an edict from the U.S. Department of Agriculture limiting cranberry production to 4.6 million barrels for the upcoming season. That number, which reflects a 35 percent reduction in production, is the amount handlers will be allowed to purchase from growers beginning Sept. 1.

Mrs. Brown's reluctant acceptance of the government's decision is being echoed by others in the industry. A total of 436 growers, handlers and others sent written comments to the USDA at the agency's request. Their suggestions for stabilizing the commodity's shaky economic status ranged from letting the market right itself with no marketing order to a more drastic reduction to 4.0 million barrels. Now that they have finally been presented with a figure, however, there is little they can do but accept it.

Mrs. Brown was one of those who supported a larger reduction.

"With the (excess) supply in freezers, the fresh fruit and organic exemption and government purchases that didn't add up to the quantity we had hoped, the supply is not going to be reduced as much as was predicted (with the smaller reduction)," she said.

A surplus of about 3.3 million barrels is expected at the end of the current marketing year (Aug 31.) A similar limitation was placed on production last year in an attempt to decrease the inventory. It was the first time in 30 years that a marketing order had been implemented. The 2000 order reduced the total amount of berries produced from an all-time high of 6.39 million bagels in 1999 to 5.5 million barrels.

At the other end of the spectrum of opinions is John Decas of Decas Cranberries, an independent handler operating out of Carver. Mr. Decas believes that no reduction would have been more equitable to handlers like himself who "did not contribute to the surplus" and who do not have an inventory to fall back on to fill their orders and expand their business as planned. Although he has, until now, been committed to buying fruit strictly from growers within the United States, he said he may now be forced to look to other countries for berries to meet his needs. He may also have to forego plans to expand his product line and develop new markets.

"It's too bad," he said. "We're just beginning to get into some new countries. Now we have to cut back. It wastes the money we have invested in those initiatives already. It's a bitter pill to swallow."

However, "the main question," he said, "should be how (the order) is going to affect growers. Will enough survive to keep our company going'?...We're dealing with not just economic but emotional issues. There is a lot of agony, disbelief and confusion out there."

The growers' well-being is the primary reason Mr. Decas said he has not pursued an injunction against the order, although he believes it "is being illegally imposed." He said he does not want to "add to the chaos and interfere with the growers' plans." Sometime in the future, however, he said he intends to legally challenge some of the government's actions, which he thinks "disproportionately favor Ocean Spray."

Chris Phillips, a spokesman for Ocean Spray Cranberries, whose directors supported a 32 percent reduction for the year, said his company is pleased with the 35 percent order, which, he believes. will "meet the same objective." He reiterated his company's promise to sell as many as 350,000 barrels of their surplus to independent handlers in need of larger quantities at cost and said new marketing strategies are being employed to promote the consumption of cranberries.

"We need to make our way out of this predicament with new products," he stated.

The cooperative is planning an advertising campaign for the fall focusing largely on a white cranberry juice made from ripe but not fully mature berries. The product is now being test marketed in various locations and samples are being served at Cranberry World in Plymouth. The plan is not without its skeptics, however, including Betty Brown's husband, Hal, who writes the "Cranberry Stressline" web page on the internet.

"Ocean Spray said they don't want a bigger reduction because they need berries for a bigger market. Now it's time to put up or shut up," he said, adding that "if the white cranberry juice makes it, it will be the first time that I know of that a food stuff that goes against what the consumer thinks it's `supposed to' look like has made it."

Mr. Brown also said he is concerned that too much money is being spent to advertise an untried product, leaving little to promote tried and true red juice products. He suggested that Ocean Spray would do well to follow the lead of Northland, an independent handler based in Wisconsin, whose juices and blends contain 27 percent cranberry juice. The higher percentage would help reduce the surplus, as well as being a good marketing strategy since that is the percentage used in tests on the health benefits of cranberries, he said.

Many in the industry believe that the job of selling more cranberries should be the responsibility of all growers and handlers, rather than just the largest.

"Ocean Spray and Northland are the only handlers selling branded products," said David Farrimond, executive director of the Cranberry Marketing Committee. "The others are selling ingredients. There is a swell of people who believe that generic products should be promoted."

To that end, the Cape Cod Cranberry Growers Association has prepared an informational brochure promoting Cape Cod cranberries with an emphasis on varieties unique to Massachusetts, according to spokesman Jeff LaFleur. The idea for the pamphlet came about as the result of a survey that indicated that consumers do not differentiate between locally grown and imported berries when considering such qualities as freshness and taste. (According to Mr. Phillips, Ocean Spray buys 42 percent of its berries from Wisconsin and 38 percent from Massachusetts with the remainder coming from New Jersey, British Columbia, Oregon and Washington.) Other ideas for promoting local berries are also being discussed.

Mr. Farrimond said that some growers approached supermarkets last year about stocking their fresh frozen fruit, hoping it would be a way to make an immediate profit, but many found the cost of slotting fees, packaging and other expenses too high.

"Growers are looking for a quick turnaround," he stated. "A couple of years is too long for some growers. They have already been dipping into their retirement funds to survive."

The amount that will likely be paid to growers for the 2000 crop is between $10 and $15 per barrel while the cost to produce a barrel is between $25 and $30. In April growers also received a one-time disaster assistance payment from the federal government of $4.97 per barrel, which, while helpful, still brings them up short.

Although economic theory suggests that an increase in supply initiates a decrease in cost to the consumer, which in turn stimulates demand, Mr. Farrimond noted that the price of cranberry products on store shelves has not gone down significantly. The price paid to growers, however, has dropped dramatically since the late 1990s.

"Someone's making the margin and it's not the grower," he commented. The impact extends beyond the industry to the community, he said, since many growers who are desperate for cash are being forced to sell off their dry land for house lots. He added that, while the number of barrels sold this year shows an increase over the number sold during the same period last year. "until the glut is taken off the marketplace the price will remain in the doldrums."

Best guesses for when the price will finally work its way out of the slump range from two to three years unless consumption increases dramatically. Meanwhile, as Mr. Farrimond said, growers and handlers who can will "just keep plugging away ...toughing it out" and hoping for brighter days ahead.

 


The Middleboro Gazette is published weekly on Thursday at 148 Grove St., Middleboro, MA 02346 by Hathaway Publishing. You can email the Gazette at mgazettte@gis.net. Mail subscriptions are available at $25.75 in Plymouth Country and $42.50 elsewhere in the U.S.        

 

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