By: Brian Wick, Executive Director, Cape Cod Cranberry Growers Association
The 2018 Massachusetts cranberry harvest is forecasted to be a good crop. With the warm fall, many growers held off starting harvest, waiting to attain the minimum color levels that most handlers require. As a result, the harvest is a little behind what is considered “normal”, although, with the ever-changing climatic conditions in the region, it’s becoming harder to determine what normal is. With the rains and humidity that inundated the region in the late summer and continuing into the fall, fruit quality remains a concern. So far, deliveries have been good in quantity but some quality issues have popped up. This may be more of a case of growers bringing in their problematic beds before they get worse and not necessarily a trend for the season.
One of the issues that have people talking is the volume regulation announced by USDA. Under the federal marketing order, which US cranberries, along with many other commodities belong, the Cranberry Marketing Committee is authorized to request a volume regulation, pending approval by USDA. In August of 2017, the committee recommended a 75% producer allotment in order to help stabilize the price paid to growers, by reducing the supply. This means that for each grower in the US, they would need to reduce their 2018 harvest by 25%, although there are some exemptions. With inventories of cranberries, mainly juice concentrate rather than actual whole berries, remaining high and more fruit on its way, the committee voted to take a measure of last resort and restrict some of the supply. This would allow demand to tighten and cause prices paid to growers to stabilize or even increase, helping to keep more growers in business. It took USDA until this past August to approve the recommendation and there are various exemptions and rules associated with the ruling that are too nuanced to review here. The cranberry industry also committed to increasing its marketing efforts, particularly growing export opportunities, to further build demand and bring supplies into better long-term alignment with demand. The goal is that by taking this measure, which no one wants to do, it will help all growers and enable more to stay economically viable. It wasn’t done to allow for higher prices for the sake of simply getting more money. It was done because the ability to get supply and demand into alignment had not been working through sales alone and pricing was so bad for many growers that it should help stop this perilous downward trend and keep more farmers farming.
What this volume regulation will not do is cause 25% of the 2018 crop to be necessarily composted or otherwise destroyed. Due to the late decision by USDA, growers were forced to grow their entire crop, not knowing if it would be approved or not. Now, growers are being told to deliver all of their crop and the handlers will be responsible for removing the 25% from the inventory. Again, the rules set by USDA will exempt some of the fruit from the regulation and by spreading the 25% across the entire country, not every grower will necessarily need to have their crop reduced. Further, the rules allow for up to half of the allotment to be from products already in the freezers from previous crops. This means that a large percentage of the reduction can come from cranberry concentrate that is in storage. As the industry has shifted from a juice first business to a dried cranberry business, manufacturers sometimes find it difficult to obtain enough whole cranberries to keep their dried cranberry manufacturing lines operating at peak efficiency. With a volume regulation that is a combination of stored concentrate and 2018 fruit deliveries, the impact on disposal is greatly diminished. This also allows handlers to remove less desirable fruit and optimize the remaining fruit for the best product mix. Further, some fruit can also be used in research and sold into non-competitive markets, which admittedly would not be a tremendous amount but would help where possible.
As the Massachusetts cranberry crop continues to roll in, growers are optimistic for a good harvest. Although the volume regulation and the current economics cast a heavy shadow on the industry, the growers are still excited to be bringing in their hard work. The Massachusetts crop received this year will still be as it always is – beautifully red, plentiful and healthy.