Sep 13, 2005

Market Growth Factor is 17 Million Pounds

The Cherry Industry Administrative Board (CIAB), the national marketing order for red tart cherries, convened in Ludington, Mich., Sept. 9 to calculate and recommend the final free and restricted percentages for the current crop year, 2005-2006.

The final percentages – 52 percent free and 48 percent restricted – were determined at the fall meeting. Preliminary percentages were set in June.

The percentages are calculated using the industry’s actual production for the year rather than the estimate of production that is used in determining the preliminary percentages. Free tonnage is that portion of the crop that can be marketed without reservation. The CIAB recommended to the Secretary of Agriculture that the final free percentage be set at 52 percent. Restricted production is that portion of the crop that must be either retained in inventory or marketed only in designated markets. The CIAB recommended that the final restricted percentage be set at 48 percent.

Also made available to processors of tart cherries is a portion of the harvest that would otherwise be considered restricted, to be used to expand market opportunities for the industry. This is known as the Market Growth Factor. These products may be marketed without reservation just like the free tonnage. For the current year, the Market Growth Factor is 17 million pounds of tart cherry products.

The CIAB also adjusted the amount of restriction by 16 million pounds to more accurately reflect the needs of the industry. Thus, net of the Market Growth Factor, the effective free percentage is 64 percent and the effective restricted percentage is 36 percent.

CIAB considered numerous factors concerning the supply of and demand for red tart cherry products. The industry produced 267 million pounds of cherries during this crop year. Of this total, 264 million pounds was from restricted producing areas and 3 million pounds was from unrestricted producing areas. The CIAB also considered such factors as the average annual volume of sales of tart cherry products, the carry-in of product into the current year and the desirable carry-out of product for the following season.