Op-Ed

Burn the Surplus

by Russ Lawton

12/28/00 -- In order to eliminate the surplus and save the growers from certain extinction, the growers need to make some tough decisions and take on the burden of getting rid of surplus. If the grower thinks the handlers are going to "market" their way out of this surplus situation, with a little help from the C.M.C. and 25% marketing orders, we will be getting $10.00 cranberries for the next five years. I don’t believe many growers can survive two more years of $10.00 cranberries; I know I can’t. I won’t watch a business that’s not profitable destroy me personally, even though I still love the business and would miss it.

I want to throw out some thoughts that I hope will be taken with an open mind, given careful consideration and responded to constructively.

#1. The quicker we get rid of the surplus, the better. I believe this can be accomplished in one year. The solution will cause a great deal of pain to the grower, but only for one year. There is less suffering in cutting the jugular than cutting one half a wrist for the next five years. It is preferable to have a number of businesses die quickly, rather than the certainty of all succumbing slowly. All excess cranberries should be deposited with the C.M.C., to be sold to any handler at grower price, plus freezer costs (forget the notion that O.S. needs 1,500,000 BBL carry over), and then figure the "Marketable Quantity" needed for 2001 and adjust the grower allotment accordingly. I’m sure that the set aside would be somewhere between 40% and 50%.

#2. This is an industry problem, as long as you realize that industry is synonymous with growers. We, the growers, are the people who can solve this surplus situation, because we control the supply. Handlers are fighting among themselves to maintain, or gain, market share; using low supply prices to wage their war. Do they think about grower returns? No! As handlers, they just hope enough growers survive so they can stay competitive next year. Some handlers are signing up new growers, because they believe some of their current growers won’t be here next year due to financial problems. These handlers, who are signing new growers, do not have a surplus problem and would rather deal with additional growers rather than be held hostage by handlers who have a surplus problem and know it.

#3. Growers may have to organize to insure that a reasonable return for fruit is obtained. Remember, we control the supply! In my estimation, if we can’t receive $35.00 per barrel, we won’t be able to survive, or make our operations profitable.

#4. The growers would stand a much better chance with lending institutions if loan officers knew that in one year prices could rebound.

#5. We, the growers, need to support medical research, generic promotion, and 27% juice content. It is unbelievable how little discussion has taken place relative to this issue. I believe it would remove 500,000-1,000,000 BBL from the surplus and reassure the customer that any cranberry drink would offer the same medical benefits. We must work with our respective handlers to stop this price- cutting and sell cranberries at a reasonable price. Supermarkets are selling cranberry products at the same price level as when growers were getting $60.00 per barrel. The handlers need to realize price-cutting is not working now and will never work.

#6. If the grower cannot make it clear to the handlers that these price-cutting measures must stop, the handlers who survive will win at the expense of 50-60% of the growers who will be forced out of business. Quite possibly this is the solution some handlers are seeking. The only way to stop this scenario is for the growing community to take charge.

In conclusion, these are random thoughts, which I hope will encourage additional action from the growing community. The finger pointing and accusations, which have caused many hard feelings, must stop. We need the growing community to become united to solve the surplus problem. As I’ve said before, neither the handlers nor the government have the ability or desire to solve our problem.

I have read some different scenarios which are good, but do not deal with the existing surplus. Any solution that does not deal with the existing surplus and does not assure $35/BBL in the year of implementation does not work.

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