Picture: 123RF
Picture: 123RF

Chicago — Cranberries might be a staple on Thanksgiving tables, but a glut of US supplies has gotten so large that fruit could be headed to the compost pile.

Just as demand is hitting its seasonal peak, American processors are anxiously awaiting government approval that would allow them to turn excess fruit into fertiliser. The programme would be the first of its kind for cranberries.

Supplies have piled up amid bountiful US harvests and a surge in imports. Inventories were large enough to top consumption before farmers even started gathering this year’s crop in September. The overhang prompted growers and processors to vote in favour of the disposal programme at a twice yearly meeting of the Cranberry Marketing Committee in August. The US department of agriculture could rubber-stamp the proposal as early as this week.

"The order will allow the industry to get back into supply and demand balance," said Kellyanne Dignan, the director of global co-operative communications at Ocean Spray Cranberries, the largest US producer and processor, and a name that’s become almost synonymous with the fruit.

The cranberry is iconic at this time of year as it pops up in everything from traditional relishes to Christmas cookies and cocktails. About 20% of annual sales of the fresh and processed fruit occurs during the week of America’s Thanksgiving holiday, celebrated on November 23 this year. But becoming a celebrity of the fruit world hasn’t been enough to reverse the slowing pace of demand growth, leading the industry to take desperate measures to keep prices from collapsing.

Becoming a celebrity of the fruit world hasn’t been enough to reverse the slowing pace of demand growth, leading the industry to take desperate measures to keep prices from collapsing

Under the proposed initiative, fruit processors and exporters would be responsible for supply disposal. Some can be donated or used for research, but the lion’s share will likely end up as compost. The cranberry committee has also recommended that growers reduce next year’s production, leaving it 25% below average sales of the past six years, according to Michelle Hogan, executive director of the Massachusetts-based group.

The plan for next season is similar to a crop-reduction method last used in 2000 and 2001. "We are producing a lot more than we are selling" Hogan said.

The cranberry is one of many agricultural products plagued by gluts, which has kept global food inflation in check. World grain stockpiles are ballooning and American meat production is at record levels.

All the excess supply will help make this year’s US Thanksgiving dinner the cheapest since 2013.

The disposal programme would help reverse the growth of excess supply while the industry works to increase demand in domestic and international markets, said Tom Lochner, executive director of the Wisconsin State Cranberry Growers Association. About 5% of the crop is sold as fresh fruit, with the rest stored and sold frozen, dried or processed into juices and sauces.

If the department of agriculture approves the programme, any handler that uses more than 125,000 barrels would be required to dispose of 15% of their supplies gathered from this year’s crop, Hogan of the Cranberry Marketing Committee said. A barrel weighs 45kg.

A bout of bad weather could also help ease the fruit glut. American production is projected to fall 6% this year to 5.6-million barrels after some adverse growing conditions, the government estimates.

Cranberries are native to North America with about 75% of global production grown in the US Wisconsin accounts for more than half the domestic harvest. Fawn Gottschalk’s family’s 93ha of marsh beds in Wisconsin Rapids will produce about 7% less this year after a cold start to the growing season, some heat near blooming in July and too much rain in August curbed yields for the perennial crop.

The farm her grandfather started in 1940 had better yields than expected as freezing weather this fall came in a little later than normal. Still, ample inventories mean prices are likely to fall to 60c to 70c a kilogram this year from about 75c last year and 80c in 2015, Gottschalk said. "We are approaching break-even and some growers are below break-even," Gottschalk said. "We are still okay, but we need to develop new markets and increase year-round consumption."

Bloomberg

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