Sep 15, 2009

Tart Cherry Industry Sales ‘Restriction’ Set at 68 Percent

The national red tart cherry crop came in at 355 million pounds, a whopping increase over USDA’s June estimate of 283.6 million pounds. At its meeting Sept. 10, the Cherry Industry Administrative Board increased the “restricted” percentage from the preliminary 49 percent set last June to 68 percent.

Perry Hedin, the CIAB administrator, said that reports from processors indicate that they took in 90 percent of the crop. While prices and terms of sale information are not reported by the industry, Hedin said many processors made a “down payment” of about 10 cents a pound for the cherries. Through the harvest season, growers expected that prices, in the end, would tally around 20 cents a pound.

Despite adverse media attention caused by fruit that was “diverted” in the orchard, only about 10 percent of the fruit was abandoned. Processors decided to take 317.8 million pounds of fruit and figure out how to deal with it later, Hedin said.

Last year, tart cherry sales totaled 212 million pounds, he said. There was some carryover that, combined with new production this year, provides a tart cherry supply of 407 million pounds.

“We have almost two years’ worth of cherries in inventory,” Hedin said.

The industry is counting on USDA, hoping it will purchase tart cherries for feeding programs and charitable contributions. But the cherry growers are part of a growing queue of fruit growers looking to move apples, nuts, cranberries and other fruit crops in abundant supply this year.

What will USDA do?

“I haven’t a clue,” Hedin said. “But if USDA doesn’t take them, processors will have to hold them in inventory.”

The 68 percent “restriction” number means that processors can only sell 32 percent of the crop into traditional markets, such as frozen and canned pie filling. The remainder can be sold into “new” markets – such as juice and dried products – or into export markets, or it can be held in primary and secondary inventory.

Officially, the primary inventory may hold 50 million pounds, from which sales can be made to USDA and other feeding programs; and the secondary inventory is held by processors.

Processor response to the bumper crop was variable. In Utah, Hedin said, the crop came in at 46 million pounds, twice the earlier estimate, and growers and processors there decided to leave 12 million pounds unharvested. In Michigan, which had a much larger crop than does Utah, only 18 million pounds were left in the orchards.

Early on, national media painted a picture of a government program gone amuck, resulting in massive destruction of good food.

“I’ve spoken at length with reporters, but that doesn’t seem to make it into the story line,” Hedin said. “All commodities have surpluses, and some gets abandoned. But no one oversees or forces crop destruction. I don’t tell growers to leave cherries in the orchard.”

“The federal marketing order program worked as it’s supposed to,” said Tom Facer, who represents about 100 tart cherry growers in Michigan and New York who are organized in a supply cooperative.

“Last year, growers got 40-some cents a pound for cherries, and they loved it. The crop is much, much larger this year.”

– Dick Lehnert