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AgriNotes and Notes March 9, 2000 Effort underway to amend Cherry Marketing Order Petition would place all districts under marketing restrictions in years of oversupply Contact: Ken Nye, 800-292-2680, ext. 2020 LANSING, March 9, 2000 - A petition to amend the Federal Cherry Marketing Order, which would subject all districts to restrictions in years of oversupply, has prompted a series of public hearings across the country to spur feedback from producers. The current structure of the order, created three years ago as a supply management tool, has been the subject of concern by some producers who say it puts large districts - producing more than 15 million pounds - at an unfair disadvantage. Currently, those districts are required to hold back product in years of national oversupply while lower-producing states are not subject to that restriction. The Federal Cherry Marketing Order, administered through the Cherry Industry Administrative Board (CIAB), was developed and is funded by producers. Using a complicated Optimum Supply Formula, the CIAB regulates the amount of fruit that goes to market by implementing restrictions in years when supply exceeds the demand for red tart cherries. "The purpose of the organization is to support the national red tart cherry industry and, ultimately, to improve prices paid to producers," explained Perry Hedin, executive director of CIAB. While the order has had considerable success in securing better prices for producers, some producers feel that the marketing order needs to continue to change as industry changes. Today, the regulation burden falls on Michigan and Utah. As a member of the seven-state order, Michigan has three districts, and each of the other states is a district unto itself, for a total of nine districts. All three of Michigan's districts - along the state's western fruit ridge - are subject to restriction, as are Utah and New York. "Although New York, because of low production in 1999, will not be subject to restrictions this year," Hedin said, "Washington, with a number of young trees, is expected to surpass the 15-million-pound mark in the near future." Other states in the order include Oregon, Pennsylvania and Wisconsin. "The argument here is that the current order allows for a producer in Michigan, or any of the major-producing states, to be subject to restrictions," Hedin said. "This means a Michigan producer, who may have the same size operation as a Wisconsin farmer, for example, will be required to hold back part of his crop in years of oversupply, while the Wisconsin farmer is able to market his entire crop." Farmers falling under the restriction - up to 40 percent - have a few options, according to Hedin. "They can choose to not harvest the product and leave it in the field, or processors can inventory it and hold it for another year, sell into the export market, make food bank donations or introduce new product uses." Public hearings on the petition to amend the marketing order are scheduled for late March and early April in Rochester, N.Y.; Grand Rapids, Mich.; Pasco, Wash.; and Salt Lake City, Utah. "We are definitely encouraging producers to speak up during these meetings," Hedin said. Cherry production in the United States has been consistently above consumption levels. U.S. red tart cherry growers produce about 308 million pounds annually on average, while the average usage is 285 million pounds, which includes about 35 million pounds in exports. Hedin said consumption has increased from 242 million pounds in 1997 to current levels thanks to the marketing efforts of all producers, the federal marketing order, promotional efforts of the Cherry Marketing Institute, and the efforts of CherrCo Inc., a cooperative that establishes minimum price levels for producers. In the last three years since the marketing order was implemented, the price for red tart cherries has increased at both the grower and processor level and inventories have been stabilized. The order was established to combat wholesale dumping on the marketplace and a balance between supply and demand. "With the marketing order, we don't have cherry producers pitted against one another and undercutting each other to the point that nobody is making a profit," Hedin said. |