Prices Threaten Cranberry Farmers
Aug. 28, 2000
MIDDLEBORO, Mass. (AP) _ After Ken Harju's two boys were born, he added the words ``and Sons'' to the doors of his cranberry delivery trucks.
Now Harju and other growers are wondering if low prices, brought on by millions of barrels of excess cranberries, will leave them anything to hand down to their children.
It cost Harju $35 a barrel to cultivate and harvest the tart, red berries last season _ but he was paid only $10 for the fruits of his labor. Just four years ago, the same berries sold for more than $60 a barrel.
For growers like Harju, who reinvested in new bogs when producers demanded more berries, the low prices are a threat not only to his bottom line, but to a way of life.
``I've invested 27 years in this business,'' said Harju, 48. ``If this doesn't turn around in a few years, most of us will be done ... Every grower is losing his shirt, and they can only do it for so long.''
The current supply of cranberries is millions of barrels greater than the number handlers and producers can sell. Some blame growers for producing too much fruit. Others say producers, such as Ocean Spray Cranberry Inc., failed to expand the market.
In July, the U.S. Department of Agriculture ordered growers in the top 10 cranberry-producing states to cut production by 15 percent, hoping a reduction in supply will drive down prices. Berries harvested as fresh fruit are exempt.
Harju, who sells his fruit to Ocean Spray and Decas Cranberries in Carver, Mass., is a third-generation berry farmer. Just before World War II, his grandfather, William Harju, a Finnish immigrant, built his own bogs by hand with wheelbarrows and dynamite.
When Ken Harju turned 21, he, too, bought his own bogs. Now his sons, Derek, 16, and Dana, 14, are hoping to inherit the family business.
Harju bought and improved 100 of his 250 acres of bogs in the past few years, when Ocean Spray and other handlers were asking for more berries.
That put Harju in debt, but he thought he was investing in his future.
Then prices collapsed.
``Everybody was asking for more berries. It's almost hard to believe it happened,'' he said.
Prices have been this low before, in the 1970s. But the cost of fuel, chemicals and labor was cheaper then, he said.
Harju has started selling excess sand and gravel to try to make extra money. He laid off two full-time workers last fall and cut back seasonal help from 18 workers to 12. He is exempt from the USDA's crop reduction order because he sells part of his crop as fresh fruit.
Other growers, however, have had to destroy crops. Still others have decided to harvest more cranberries as fresh fruit. That's no easy task: Fresh fruit harvesting is labor-intensive and quality demands are higher.
About a quarter of the nation's cranberry acreage has been added since 1994, primarily in Wisconsin, which has surpassed Massachusetts to become the commodity's leading producer.
Prices paid to growers have dropped from a peak of $65.90 per barrel in 1996 to $38.80 per barrel for the 1998 crop, and they are expected to drop below $30 when final figures for 1999's crop are compiled, USDA says.
John DeGrenier of Willow Cranberries in Carver has been farming cranberries since 1979. This summer, he started making cold calls to produce suppliers and buyers to see if they'd want fresh and fresh-frozen cranberries.
``I'm not one to sit back and wait for someone to hand me $10 a barrel,'' he said. ``I had to do something.''
Harju and other growers are banking on a new management team at Ocean Spray to increase demand. The company's president and chief operating officer, Randy Papadellis, said the cooperative of 800 cranberry farmers has cut retail prices and seen a recent increase in sales. It's too soon to predict a turnaround, he said, ``but at least we're heading in the right direction.''
The company acknowledges, however, it made some key mistakes in the 1990s. It failed to capitalize on the health benefits of cranberries and ineffectively marketed a line of 100 percent juice drinks.
``I think they can do it,'' Harju said of the new management team, ``but it's going to take a while. It's going to take time and money, which we don't have.''
On the Net:
Ocean Spray: http://www.oceanspray.com
Cape Cod Cranberry Growers' Association: http://www.cranberries.org