Cranberry Industry Volume Regulation Announced

July 7, 2000

USDA has announced a final rule regulating the volume of cranberries that can be marketed during the 2000-2001 crop year. A producer allotment of 85% will be implemented for the new season beginning Sept. 1 to stabilize plummeting prices due to expanding production and mounting inventories. The allotment establishes the quantity of cranberries that handlers may purchase from, or handle for growers.

The industry's Cranberry Marketing Committee met on June 6 to discuss three options offered in the proposed rule published May 30 with a comment period ending June 14. At that meeting the committee recommended an alternative option incorporating aspects from the three proposed options. USDA is adopting the committee's June 6 recommendation with two changes. The first change would continue to allow excess fresh cranberries to be exported. The second change would recognize established growers' sales of cranberries from recently planted acreage. Details of these changes are contained in the final rule.

The final rule establishes a marketable quantity of 5.468 million barrels and an allotment percentage of 85%. Total growers' sales histories were set at 6.432 million barrels. The allotment percentage equals the marketable quantity divided by the total of all growers' sales histories. Fresh and organically-grown cranberries are exempt from the volume limitations to facilitate marketing of these products. Imports are not regulated under the marketing order.

USDA's Agricultural Marketing Service, which oversees the Cranberry Marketing Order, received 131 comments on the proposed rule. By far, the majority of those commenting were cranberry growers. Seventy-three comments opposed volume regulation in general or opposed a specific portion of the proposals. Fifty-eight comments favored one of the options under consideration.

The final rule will be published in the July 11 Federal Register and can be viewed at http://www.ams.usda.gov/fv/moab.html.

USDA and the cranberry industry have worked together in considering the best options to address the oversupply situation, said Enrique E. Figueroa, deputy under secretary for Marketing and Regulatory Programs. Kathleen A. Merrigan, administrator for USDA's Agricultural Marketing Service, said, "In view of the difficult circumstances faced by the cranberry industry and the many variables considered, USDA determined that this option is the most equitable means of establishing volume regulation at this time."

The eight-member Cranberry Marketing Committee, appointed by the Secretary of Agriculture, oversees the Cranberry Marketing Order that regulates shipments of cranberries grown in Massachusetts, Rhode Island, Connecticut, New Jersey, Wisconsin, Michigan, Minnesota, Oregon, Washington, and Long Island, NY.

Cranberry production in 1999 reached an all-time high of 6.39 million barrels (one barrel equals 100 pounds of cranberries) - 17% more than the previous year and a 377% increase since 1960. In the same 40 years, harvested acreage has expanded 76%, and growers have increased their yields 171%. Most domestically produced cranberries - about 95% - are processed, while the remainder is shipped to fresh markets.

Consumer demand for cranberries has leveled off in recent years, with total U.S. sales peaking in 1994 at 4.7 million barrels and declining to 4.5 million barrels in 1998. Prices have suffered as a result. Growers have watched prices decline from a peak in 1996 of $65.90 per barrel to $38.80 per barrel in 1998, and returns for the 1999 crop are expected to decline to less than $30.00. At the same time, inventories have mounted, and the Cranberry Marketing Committee estimates that nearly a year's worth of production is expected to be held in inventory when the current marketing year ends on Aug. 31.