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Overabundance of cranberries drops prices for growers

The problem is not having too much of a good thing. It's knowing what to do with it.

Bill Haines Jr., owner of the Pine Island Cranberry Co. in Chatsworth, Burlington County, in September during harvest. He's standing in a cranberry bog on his farm. (Photo by Stephanie Haines)
Bill Haines Jr., owner of the Pine Island Cranberry Co. in Chatsworth, Burlington County, in September during harvest. He's standing in a cranberry bog on his farm. (Photo by Stephanie Haines)Read more

The problem is not having too much of a good thing.

It's knowing what to do with it.

Cranberry growers have had abundant harvests over the last few years, flooding the market with fruit now finding its way into new products and markets.

Nationally, they produced 8.5 million 100-pound barrels of cranberries this year, compared to 6.8 million in 2010, according to the U.S. Department of Agriculture.

The 700 cranberry and grapefruit growers in the big Ocean Spray agricultural cooperative in New Jersey and other states as well as Canada and Chile turned out 7 million barrels, a steep rise over the 4.9 million in 2010.

New Jersey, the third-largest producer of cranberries after Wisconsin and Massachusetts, saw its output shoot up 12 percent this year over last, bringing in more than 500,000 barrels, worth about $30 million.

But that bumper crop, coupled with other bountiful harvests, has depressed the price per barrel from a high of $60 in past years to $45 for Ocean Spray growers, officials said.

Independent farmers have had it worse. Without the same support, marketing, and international reach of the cooperative, they've seen contracts canceled and prices plummet as low as $10 to $15, officials said. Some have had to consider cutting their workforces.

The oversupply has been building for several years, said Shawn Cutts, president of the American Cranberry Growers Association, a nonprofit representing farmers in New Jersey.

"The supply side of the equation will stay the same" because the same acreage will continue producing fruit, and new varieties and farming techniques allow more fruit per acre, said Cutts, an Ocean Spray grower with cranberry operations in Bass River and Washington Townships, Burlington County. "The only way to address the situation is to address the demand side."

In the meantime, the price for cranberries will likely be affected, said Cutts' father, Bill, a member of the board of the Cranberry Institute, a nonprofit international trade organization.

"It will probably remain depressed for another two or three years - until we work our way out," he said. "It's like the stock market."

What growers in and outside of Ocean Spray are seeing is simply the result of supply and demand, said Bill Haines Jr., owner of the Pine Island Cranberry Co. in Chatsworth, Burlington County, one of the top three cranberry operations in the world. "There's definitely an oversupply.

"But the price hasn't dropped to the point where we're not profitable as growers," said Haines, the No. 1 producer in New Jersey, whose operation turned out 316,000 barrels this year alone. "Our job is to grow cranberries as efficiently and at as low a cost as possible."

Though New Jersey's production came in last year at 547,000 barrels, it was eclipsed by Wisconsin's 6 million and Massachusetts' 1.8 million.

Most New Jersey cranberry farmers - 15 of the 25 - are part of the Ocean Spray cooperative, and they produce 95 percent of the state's crop, Shawn Cutts said.

They "receive all the proceeds earned on their crops" and "the returns they are paid is a function of the success" of the cooperative's business, including the sale of its branded products, said Dan Crocker, a company vice president.

"Despite the uncertainty stemming from the changes in supply, membership in the cooperative helps insulate our grower-owners from the volatility" of the markets, Crocker said.

To increase demand, Ocean Spray has offered various juices, such as White Cranberry, Cran-Promegranate, Cran-Mango, and Cran-Grape while also introducing sweetened dried cranberries, or Craisins, in the 1990s.

"We have to do a better job of selling the existing products," Haines said. "The sale of Craisins is growing and juice sales are flat."

More than 200,000 barrels of Ocean Spray's 2014 harvest will be sold as fresh cranberries, available through the end of the year; the remaining fruit will become juices, dried cranberries, cranberry sauce, and other products, Crocker said.

"We also have to develop new products" to hike sales, Haines said.

One of those is PACt, a cranberry extract water with proanthocyanidins from the fruit, which "help cleanse and purify the body better than water," Crocker said. Cranberries help discourage urinary tract infections, can fight bacteria, and are high in antioxidants.

PACt has been offered through major retailers in California and Nevada and online, and will be available nationwide in 2015.

Another way of expanding demand is finding new markets, Haines said. About 75 percent of Ocean Spray's cranberries are consumed in North America and the rest is exported.

"There's room to grow," said Haines. "We sell a lot in Europe, particularly in the United Kingdom, Australia, and in Asian countries - Japan, Taiwan, and Korea.

"But there's a huge opportunity to increase sales internationally," he said.

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