Traverse City farmer says cherry dumping gives market to imports

IMG_5515A small cherry farmer in Northern Michigan is at odds with market regulations because he says they force him to dump as much as 40-thousand pounds of tart cherries and allow for international cherry producers to slowly take over the market.

But regulators say the rules are an important part of keeping cherry prices stable – and allowing growers to earn a livable income.

I visited the farm of Mark Santucci, a cherry farmer just outside of Traverse City Michigan. He attracted attention in July when he made a facebook post about how much of his crop needed to be dumped this year.

Santucci took me out to his Tart Cherry trees, relative to other cherry farmers his is a small crop. Along the way he pointed out one of the metal drums where he dumps cherries.

Back in his office, which is just a little beige golf cart, Santucci explained the problem. Basically, he said, every year there’s an orderly marketing agreement set out by the Cherry Industry Administrative Board, or CIAB, which is made up of cherry growers and processors.

“That means they are trying to support the price of tart cherries so that farmers can make.. Let’s call it a livable wage or a little better than livable wage.”

And that isn’t a bad thing. Santucci said the cherry industry fluctuates a lot from year to year, so to keep prices stable during bumper years they want to keep some cherries off the market.

“Unfortunately when they come up with the rules when they determine whether or not a farmer has to put cherries on the ground they don’t take into effect the impact imports have on the market.”

And, Santucci said, by not accounting for imports they allow for the market to be taken over by foreign cherries.

“We have gone from a net exporter of tart cherry products to a net importer of tart cherry products. It’s gotten to the point where last year we imported 40% of our total consumption of tart cherry products.”

Especially over the long term said Santucci, by dumping product so they can keep prices up they open the market to foreign cherry growers who can afford to ship to the U.S. because they can undersell American growers.

“If you’re trying to control the market and support the price without taking that into account what you’re really doing is creating an opening for those imports to come in.”

“It’s that dialogue between grower and processor that defines whether or not fruit gets dumped in the orchard.”

This is Perry Hedin, the Executive Director for the Cherry Industry Administrative Board, or CIAB.

Hedin said that the question of whether or not cherries get dumped boils down to what a processor can handle.

“Tart cherries unlike a fresh cherry are all processed into a finished good within hours of harvest.”

What that means, said Hedin, is that the tart cherries have a good shelf life.

“We can hold those year over year for future years. It’s not like a fresh bing cherry that you buy at Meijer that only has a few days that it’ll be edible.”

So when they keep cherry product off the market in order to keep prices stable it doesn’t have to go to waste. That product can simply wait until the next year – but only if it’s able to get processed.

The other thing, said Hedin, is that while there is a limit to how much cherry product can go onto the general market it’s well within a producer’s rights to sell within the industrial market – think Cherry Coca Cola, which is primarily made up of imports.

“If they can find a customer that has been using a foreign product and is willing to switch, the handlers can do that. There is the mechanism to address the question of imports.”

I got back in touch with Mark Stantucci to see how he felt about what Hedin had to say. Stantucci said that telling processors to keep product off the market just isn’t realistic.

“they can’t sell it because they’re not allowed to sell it. The market has shown it will buy more cherries than we domestically are putting on the market.”

And said Santucci we have to stay competitive with foreign growers.

“We’re propping up the price above what the price in their home country is. They’ll continue to add to their capacity because no one is putting a restriction on them so they’ll continue to eat away at the market share that we currently have.”

Both Santucci and the CIAB care about keeping cherry farmers in business, the question then is how best to preserve tart cherry sales for the future.