Jun 9, 2020Montmorency cherry growers upbeat on future
Michigan’s tart cherry growers in the last 12 months faced bad prices, retaliatory tariffs in the international markets and a disappointing decision from the U.S. International Trade Commission (ITC) regarding cheap imports from Turkey.
And yet, the group is focused on the future, savoring bright spots that again show the value the small, red fruits represent to consumers: A big government purchase of tart cherries, an expanding new foreign market and a sustained focus on reaching domestic consumers.
Nels Veliquette represents northern Michigan and is secretary of the Cherry Industry Association Board (CIAB). Based in northwest Michigan, the Veliquette family of growers does business through Cherry Ke Inc. and Cherries R Us Inc., marketing its fruit with other growers in the area through Shoreline Fruit.
“We’re not the only tasty, high-antioxidant superfruit out there,” he said of the Montmorency tart cherry commodity. “It seems like everybody’s a superfruit, or a superfood, or a whatever these days. You’ve got to taste good, you’ve got to look good, and you’ve got to have a good program to reach consumers.”
Two-thirds of U.S. Montmorency cherries are grown in Michigan. The state cultivated 34,100 acres in 2019, according to a report from the USDA’s National Agricultural Statistics Service (NASS). Other productive states are Utah, Washington, New York and Wisconsin.
In the Great Lakes state, last year was a rough one. The 2019 marketing year average price, at $0.143 per pound, was the lowest since 1998, according to NASS’ report. Tart cherry production was down 15% from 2018. At the farm level, Michigan’s value of utilized production was $22.5 million.
The industry faced a number of challenges from outside, including retaliatory tariffs in the international markets, but government purchases helped, including two $15-million buys in 2019.
Petitions from the Dried Tart Cherry Trade Committee, which included Shoreline Fruit LLC, alleged cheap imports from Turkey were being unfairly dumped in the U.S. market. After an investigation, the U.S. Department of Commerce announced in September 2019 that Turkey “exporters sold dried tart cherries at less than fair value.” But the ITC in January 2020 declined to impose any antidumping and countervailing duty orders, writing that “imports from Turkey held only a small presence in the U.S. market,” not enough to harm the domestic industry. The petitioners decided not to pursue any additional legal action.
But time has been kind to the industry – imports were cut off due to the pandemic of the new coronavirus, COVID-19. The industry leaders didn’t miss a beat, keeping up their work to prepare for another buy. And in early May, elected officials announced a $20 million USDA purchase of U.S.-grown tart cherries for its Section 32 program to feed Americans in need.
Using Section 32 authority, USDA will buy surplus tart cherry products including dried cherries and juice to assist growers and producers as the industry continues to be impacted by the coronavirus and other challenges in the domestic and foreign market.
“This purchase announcement was made at a very critical time for the tart cherry industry,” Julie Gordon, president of the Cherry Marketing Institute (CMI), said in a press release at the time. “We have substitutional inventory that now can be provided to families in need during this COVID-19 pandemic.”
“Well, I think, first of all, this was something that we had had on our radar as an industry, even before the total effects of the COVID-19 pandemic,” Veliquette said. “It was sort of baked into our plan. We had made that request back in January, we felt like it was a worthy request to be made, and then as things developed, with the COVID-19 situation, it turns out that dried cherries are actually not only a product that’s in demand but a product that is useful to have because it’s shelf-stable.”
For Veliquette, the purchase highlighted an area where the industry excels.
“I think that’s one of the silver linings of all this,” he continued. “The two biggest areas that people are familiar with cherries now are either the dried cherries or the juice, just ready-to-drink cherry juice. Those are shortage products that are healthy and retailers want and they need. So that’s very a good benefit for us.”
A small survey the CIAB recently did in coordination with a donation of cherries to Michigan food banks helped shed some light on the value that the cherries have for Section 32 programs, Veliquette said.
“When people have the opportunity to have a good healthy product, that’s shelf-stable – these typically come in two-pound bags – those are really useful to have for families, especially families with kids because it’s a healthy easy, snack that stores well,” he said.
Scouting the market
While tariffs and trade commissions haven’t helped the tart cherry growers, a bright spot in the international markets has been South Korea.
Veliquette said South Korea had previously been “known” by CMI and trade officials for its potential, but the market has begun to further develop. Both the state of Michigan and the USDA have conducted trade missions to the country finding an urban population that likes cherries and has an affinity to the picturesque cherry trees. Veliquitte said South Korean companies, too, seem interested in hearing about the health benefits of cherries.
“Anecdotally, this is something that I knew a while ago because we had a South Korean exchange (student) live with us for a year,” he said. “My teenage exchange student was just thrilled to have all kinds of access to cherries, and that led to hearing about how much South Koreans like cherries.”
But Veliquitte had to add a caveat: The domestic market is still king.
“OK, it’s great that we have people that are interested in our products, from other countries, but this is the place where everybody wants to do business,” he said.
Imported cherry products will likely remain an issue for the industry, Veliquette said. Earlier this year, CMI filed a complaint alleging that tart cherry imports from Brazil are being misidentified and misreported in order to avoid paying duties that help Michigan cherry growers compete in the global marketplace.
But he added that there is much the growers can do now to educate American consumers.
“There seems to be a fervor right now about ‘Buy American,’” he said.
Disruptions in the food supply related to the pandemic have led to U.S. media reports about crops being plowed under, vegetables being turned into compost, or even large numbers of livestock being destroyed.
“Americans are beginning to understand a bit about their food supply and how that food system works,” Veliquette said, and “Buy American” programs are popping up as consumers try to support U.S. growers. Cherry growers are no strangers to destroying crops as a part of volume regulation conducted by the Federal Marketing Order (FMO).
Tart cherry growers and processors in March voted to continue their FMO. Fifty-three percent of eligible producers and 57% of eligible processors voted in favor of continuing the marketing order, according to results reported by the USDA. Those voting in favor of continuation represented 68% of the volume produced and 69% of the volume processed by those voting. For the marketing order to continue, more than half of the growers and processors voting in the referendum, or more than half of the tart cherry volume represented in the referendum, needed to vote in favor of the marketing order.
The marketing order allows the CIAB to conduct production and marketing research, promotional initiatives and volume control, under USDA’s oversight.
“The key with the FMO, the benefit to growers is our ability to market our fruit together, to collectively market together,” Veliquette said. “We can argue about how much supply we think should or shouldn’t have been on at any given year, but without a way for us to collectively bargain and promote our products, we wouldn’t be in the position we are today.
“There’s no doubt that the cherry marketing dollars that have been spent over the past 15 years have really made a huge difference in our industry.”
— Stephen Kloosterman, associate editor