Apr 7, 2007

Industry Looks Ahead to Increasingly Better Times

Depending upon where you put your benchmark, the best of times are either ahead of us – or behind us – in the cranberry industry.

For the optimistic, prices have been steadily rising since 1999, the year of the big crop that busted prices to $10 a barrel. There have been no crop diversions since 2000 and 2001, when growers were required under federal market order regulations not to harvest 15 percent and 35 percent, respectively, of their crops in an effort to control oversupply.

For those less optimistic, they recall that prices reached $80 per barrel in 1997 and 1998, the year before the big crop.

“Those days are long gone,” said David Farrimond, the general manager of the Cranberry Marketing Committee. On the positive side, the price decline was a wakeup call to growers to improve their methods and reduce their costs.

Terry O’Connor, who gathers cranberry industry statistics for the USDA’s National Agricultural Statistics Service (NASS), has spent the last four years with cranberries and said he’s seen “a lot of growth, a lot of advances, a lot of new methods” as growers attempt to be as efficient as possible.

NASS reported in July that growers received an average of $34.40 a barrel for cranberries in 2005. In 2003, First Pioneer Farm Credit estimated the North American cost of production at $19.80 a barrel, Farrimond said.

On Aug. 15, NASS will issue its first estimate on the size of the 2006 crop, and the Cranberry Marketing Committee will meet the next week to discuss those numbers and to make its own crop size estimate. (Visit www.fruitgrowersnews.com for up-to-date crop information from NASS.)

In recent years, crop acreage, yield and price have been relatively stable. In its July Non-citrus Fruits and Nuts report, NASS pegged the 2005 cranberry crop at 6.24 million barrels with a total farmgate value of $214.8 million.

U.S. acreage was placed at 39,100 and the yield at 7.99 tons (just under 16 barrels) per acre. Growers received an average price of $55.80 for cranberries for fresh market and $33.10 for cranberries for processing – $34.40 average.

Among the top five producing states, Wisconsin continued to lead in both acreage, with 17.400, and yield, 210.3 barrels per acre. Massachusetts was second in acreage, with 14,200, but lowest in yield at 100.2 barrels per acre. New Jersey ranked third in acreage, with 3,100, and second in yield, with 171.9 barrels per acre.

Oregon was fourth in acreage, with 2,700, and third in yield, with 163 barrels per acre. Washington has 1,700 acres with yields of 110 barrels per acre.

A look at some old statistics shows how far the industry has come. In 1964, national production was 1.3 million barrels and just starting to rise. It was 1.9 million in 1970. U.S. acreage has doubled since 1960, and yield has gone up 2.5 times.

The secret of success, Farrimond said, was the conversion of the cranberry from a fresh market product eaten for holidays to processed products, especially juices, with a rising reputation for healthfulness.

Now, this distinctly American fruit is gaining a worldwide following.

“Cranberries are being sold in 26 countries now,” Farrimond said.

Under the federal marketing order, first receivers of cranberries pay 18 cents a barrel that generates just over $1 million a year for promotion, and about half of those are used for domestic promotion and the other for international. Funds from USDA last year swelled the budget to $1.4 million for international promotion, Farrimond said.

“The recovery is still on,” he said. “Prices may never get back to where they once were, but the industry is proactive and we are expanding our horizons.”

Research sponsored by the Cranberry Institute is continuing to position cranberries as a healthy food, he said. Cranberries are high in antioxidants, as are many other dark-colored fruits, and they appear to have one unique “anti-adhesion” property.

Research is showing, he said, that drinking eight to 10 ounces of cranberry juice a day causes a reduction in the ability of bacteria to adhere to some parts of the body. It coats teeth and gums, reducing plaque buildup, and coats the inside of the bladder, reducing urinary tract infections.

The research and promotion program funded by growers requires re-approval every four years, Farrimond said. A referendum will come next year.