Tart cherries. Image: Lou Stejskal
By Kaley Fech
Capital News Service
Michigan is the nation’s top producer of tart cherries but increasing imports from foreign countries worry the state’s growers.
“Michigan grows 75 to 80 percent of the U.S. supply of tart cherries every year,” said Kevin Robson, a horticulture and industry relations specialist for the Michigan Farm Bureau.
The Michigan crop is worth $54 million, according to the Farm Bureau.
Imports have rapidly increased over the past decade. Ten years ago, the U.S. imported approximately 24 million pounds of cherry juice concentrate annually, said Phil Korson, president of the Cherry Marketing Institute. In 2016, the U.S. imported 200 million pounds of cherry juice concentrate.
“We can’t even come close to competing with imports coming in, especially from Turkey,” said Mike DeRuiter, a third-generation farmer from Hart in Oceana County.
The average industry price last year was around 18 cents per pound. Depending on the chemicals used to protect the trees, that can be five to 10 cents under the cost of production, he said.
Turkey sells its tart cherry juice concentrate for roughly $14 a gallon, while U.S. growers are currently at $28 a gallon. The break-even point for a U.S. grower is about $32 a gallon, DeRuiter said.
U.S. farmers have incurred increased production costs in recent years due to the introduction of the spotted wing drosophila, an invasive species that destroys fruit trees, including tart cherry trees.
“That pest has been a huge challenge for growers because it’s driven up costs,” Korson said. “The profit margins are down because the costs have gone up.”
The tart cherry industry has made a massive effort to grow the market.
“Tart cherries were traditionally a bakery ingredient,” Korson said. “In the early years of our industry, most of the cherries that were produced were produced for pies and pastries.
“We started 20 years ago investing in health benefits research. There was always folklore for cherries being good for arthritis and gout, but we had no science to support that,” he said.
After 10 years of research, quite a bit of scientific support emerged regarding health benefits, he said. The Cherry Marketing Institute doubled the assessment growers pay and hired a Chicago-based agency and a new marketing director to take that research message to the national market.
“Our focus was on juice, dried and frozen, and our goal was to reposition tart cherries from a bakery ingredient to be one of America’s superfoods,” Korson said.
The Farm Bureau’s Robson said the industry has done a remarkable job of rebranding itself as a health food product.
The effort was largely successful in increasing demand. The problem for U.S. farmers, however, is their domestic sales stayed flat while imports skyrocketed.
And grower DeRuiter said, “The U.S. consumption of tart cherries has definitely gone up since we started the promotion program. And that’s grower-funded. Every grower in the U.S. is essentially paying into this promotion program.
“Statistically we have grown the markets in the U.S. so it’s a huge positive. We just have to stop other countries from dumping in here.”
Korson said the problem stems from unfair trade. If a farmer in Michigan grows tart cherries and exports them to Turkey, the tariff is 58 percent. On the flip side, if a Turkish farmer grows tart cherries and ships them to the United States, there’s no tariff at all.
“At the end of the day, I think the U.S. government has really let us down,” Korson said. “Farmers have been put in a position where the government has allowed foreign countries to take advantage of the funding and the work that U.S. growers have done in not only growing and protecting their crop, but also in trying to market their crop by giving some other competitor duty-free access to that market.“
Even with the industry’s problems, those closest to it sound optimistic.
“Growers will tighten up their boots and weather the storm with the hope and the belief that the industry will come back around,” Robson said.
DeRuiter continues to plant trees with the hope that the market will rebound.
“In the fruit world, it’s a long term commitment,” he said. “The trees I planted today, it’ll be seven years before I take the first crop off of them, and then they’ll last for about 35 years.”
DeRuiter said growers are working hard on the issues, and he said he thinks they’ll be able to fix them.
“It’s hard to shed positive light when we’re going through a low period. It’s tough but you have to be optimistic,” he said.
Is there anyone I can speak with directly about this article? It is very well written. Sometimes on the lines and sometimes between the lines, it almost screams of “put tariffs on tart cherries.” While I do not have a direct “dog in this hunt” it truly concerns me in respect to MI AG. If someone want to respond to this, that would be great.