- Associated Press - Monday, December 1, 2014

SALEM, Ore. (AP) - The federal government’s decision to spend $55 million on cranberries may dent a global glut, support prices and speed up payments to growers.

The purchase, however, won’t address production continuing to outpace demand, a step the U.S. Department of Agriculture declined to take this year.

“We have a very serious problem,” Long Beach Peninsula cranberry grower Malcolm McPhail said. “You don’t want anyone to have a crop failure. But you’d like to see average crops to keep things in perspective.”

U.S. and Canadian cranberry farmers produced this year a crop expected to be nearly as big as last year’s record harvest of 12 million barrels.

Between this year’s cranberries and fruit still unsold from 2013, the global cranberry supply stands at 16 million barrels (1.6 billion pounds). Demand over the next year is expected to be about 8.2 million barrels, according to the U.S. Cranberry Marketing Committee.

To trim the nearly 100 percent surplus, the USDA announced Nov. 21 it will buy approximately 680,000 barrels of cranberries in the form of juice, sauce and dried berries to distribute to food banks and schools.

The USDA buys cranberries every year, but this purchase will be a record and in addition to the $32 million the agency already planned to spend this year.

The announcement came two days after 22 federal lawmakers in the Congressional Cranberry Caucus wrote Agriculture Secretary Tom Vilsack asking that the agency do what the marketing committee asks of consumers - please buy more cranberries.

The lawmakers - from the country’s five cranberry-producing states, including Washington and Oregon - requested the USDA buy 1 million barrels. Although the purchase will be about two-thirds that amount, it still will be more than all the cranberries grown annually in New Jersey, the third-leading cranberry producer behind Wisconsin and Massachusetts.

“If they did 50,000 barrels, it wouldn’t have much influence, but 680 (thousand) is a lot,” said McPhail, who like most Northwest cranberry growers belongs to the Ocean Spray cooperative.

Cranberry Marketing Committee Executive Director Scott Soares said the USDA has never spent so much on cranberries and that he expects the purchase will moderately influence prices farmers receive.

Still, the cranberry inventory remains far higher than a healthy 40 percent, he said.

“The USDA purchase is a big deal, but it’s not intended to be the silver bullet for all the problems of the industry,” Soares said.

Ocean Spray growers receive payments as the cranberries are sold. Growers won’t receive the final payment for 2013 crops until June 2015, several months later usual. Ocean Spray projects the payments will amount to 45 cents a pound, down from 57 cents the year before.

With the surplus reduced by the USDA, the pool of 2014 cranberries may be exhausted sooner, which means farmers will be paid sooner, McPhail said.

The cranberry surplus has been particularly difficult for independent growers outside the Ocean Spray cooperative.

Independent growers have been receiving 10 to 15 cents a pound for fruit sold for processed products, said independent grower Alan Devlin of Grayland, Wash.

“You can’t grow it for that, at least not in Washington,” he said.

If prices were 30 to 40 cents a pound, “you could be a little more relaxed about the whole thing,” he said.

Devlin said he’s survived by selling about 70 percent of his cranberries to the more lucrative fresh fruit market.

The USDA’s cranberry purchase came a few days before Thanksgiving - the holiday the cranberry industry is trying to become less reliant on.

“It (cranberry consumption) needs to be more of a year-round thing,” Devlin said. “You don’t want to depend on the government for anything.”

The USDA will buy the cranberries under the Section 32 program established during the Depression to support farm prices. The $55 million will come from customs fees the government collects on goods coming into the U.S.

The USDA this year rejected a request by the cranberry industry to control volumes, mandating growers reduce harvests by 15 percent. The USDA said it was concerned the U.S. cranberry industry was conspiring with Canadian growers to hold down supply.

The industry likely will consider again asking the USDA to control volumes to manage the surplus, Soares said.

“We hope not to. We hope the volatility in the market will go away,” he said.

McPhail said renewing the request for volume control may be unnecessary, citing the USDA’s increased buying of cranberries. Also, Wisconsin farmers may slip back to their historical harvests after huge crops the past two years, he said.

Wisconsin produces about two-thirds of the cranberries grown in the U.S.

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Information from: Capital Press, https://www.capitalpress.com/


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