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Combating price deflating surplus

USDA orders volume controls on cranberries

Last Wednesday, cranberry handlers were ordered by the USDA to withhold from 15 percent of the 2017 crop US consumers to raise prices. The reduction applies to cranberries grown by approximately 1,100 farmers in 10 states, including Washington and Oregon. Growers and handlers petitioned the USDA for volume controls to chip away at a huge surplus.

The USDA projects the order will divert as many as 110 million pounds of cranberries to charities, animal feed or foreign markets.

Consumers are unlikely to see higher prices, but the reduction likely will help farmers. The USDA didn’t forecast a specific bump in grower returns. Even with volume controls, the supply of cranberries will exceed demand. The USDA projects carryover inventory will equal 83 percent of annual sales.

An Ocean Spray spokeswoman said in an email that the farmers’ cooperative believes volume reduction will be good for the industry. Consumer demand has been flat for several years, while production has been on an upward trend, especially in Wisconsin. The industry has not self-corrected.

The Cranberry Marketing Committee, made of growers and handlers, projected last summer the surplus would reach 115 percent of annual sales without action.

Chinookobserver.com reported how the USDA’s order followed the 15 percent cut recommended last summer by the committee. The committee later changed its recommendation to 5 percent because the 2017 harvest was smaller than forecast. Ocean Spray supported the lower figure, but USDA stuck with the higher percentage.

Publication date: 4/13/2018


 


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