Bittersweet harvest

Local growers hurt by glut of cranberries

By Mary Jo Curtis, Standard-Times staff writer

Ray Mello's thinking about getting a part-time job.

After 18 years of growing cranberries on 65 acres of bogs in Rochester, Halifax and Cape Cod, he's worried his income won't cover his expenses this year.

Indeed, there's a bitter harvest for cranberry growers this season.

The crimson berries brought a record high return of $80 a barrel just two short years ago, but prices came crashing down last season to $35 to $40 a barrel -- the lowest return since the early 1980s. And prices are expected to continue falling this year -- perhaps as low as $25, some growers predict -- as the industry enters the harvest season with 3 million barrels of frozen berries already stored in surplus from last fall.

Jeff LaFleur, executive director of the Cape Cod Growers Association, said the drop has affected growers across the industry -- from the giant Ocean Spray growers' cooperative to the independent companies and small family growers. Many have the resources to stay afloat for now, "But it becomes a question of how long they can hold on," he said.

"It's very tough," said Mr. Mello, who's harvesting this year with six, rather than his usual eight, workers. "We're cutting corners wherever we can, fixing only what we have to, trying to consolidate a little and renegotiate leases. We're getting by month-by-month."

Third-generation grower Paul Rinta and wife Linda manage about 100 acres of bogs and sell their produce to both Ocean Spray and independent handlers. The Wareham couple didn't expect the drop in prices last season; because cooperative members must wait to be paid their share of the collective profits, it was February before the full effect of last year's surplus became clear.

"By then we were already into our expenses for 1999, and now everyone's scrambling to manage their cash flow," Mrs. Rinta said. "I don't know how long we can continue to live on our equity; how long can you run a loss in any business? It really takes the joy out of the harvest."

John Decas, owner of Decas Cranberry Co., the state's largest independent grower, described the situation as "a meltdown."

"The industry is in a serious surplus situation," Mr. Decas said.

With last year's surplus and this year's anticipated 6.2 million-barrel yield, the industry will end the season with a 9.2 million-barrel inventory, said David Farrimond, executive director of the Cranberry Marketing Committee in Wareham. With an expected demand for a little more than 5 million barrels, the surplus is likely to grow to more than 4 million, he added.

"We could see a pickup in sales, but growers will be well off if they make as much as they did last year," Mr. Farrimond said.

However, Mr. Decas expects to pay the 160 growers under contract to his company less than the $37 a barrel they earned last year. For many growers, that will mean they're making less than it costs them to produce each barrel of berries. Those with the highest overhead will suffer the most, he predicted.

Doanne and John Andresen invested in 26 acres of bogs in Plympton and Duxbury in 1992, when prices were high; they break even at $50 a barrel. They're now supplementing their income by logging pine trees from their land and by "working around the clock."

"We're wondering how many years we should do this before giving up," Mr. Andresen said. "We could lose everything."

Bob Rosbe, vice president of A.D. Makepeace -- with more than 1,700 acres of bogs -- said his company's been hit, as well.

"We're struggling just like everybody else," he said. "We had a fairly full complement last year, but we're harvesting with less seasonal help this fall. Our hope is that it'll get better -- and everyone will make it through to next year."

It's not just the growers who are feeling an economic pinch. David St. Jacques, a third-generation co-owner of Hayden Manufacturing in Wareham, said his company does most of its business in supplying irrigation and harvesting machinery and equipment to SouthCoast growers. His business is also off this year -- he sold 20 water pickers last year, but only one this season -- and he and his brother are now looking for ways to diversify.

"People are being more frugal, and they'll rent equipment rather than buy it," Mr. St. Jacques said. "Last year was good for us, so that helps for now. We'll weather this."

Growers named a variety of reasons for the plummeting market: Poor management, misguided marketing, too many berries -- and too much competition. Companies like the Wisconsin-based Northland Cranberries have kicked the competition up several notches, eating into the market traditionally dominated by Ocean Spray.

The local cooperative still controls 53 percent of the cranberry juice market, but that's down 10 points in the past three years, said Ocean Spray spokesman Christopher Phillips.

"We don't take that lightly, but we're absolutely confident we'll regain that and go beyond, although it won't happen overnight," he said. "We know our growers are concerned; their livelihoods are at stake. It's a very emotional time."

Some growers laid the blame for the market crash squarely on Ocean Spray.

"Ocean Spray went to Canada 10 years ago to show farmers there how to grow cranberries," contributing to today's glut, Mr. Andresen charged.

Mr. Decas, Mrs. Rinta and the Andresens said Canadian growers enjoy several advantages over local counterparts: Land and labor prices are lower, the water supply is abundant, and the government provides subsidies -- with far less bureaucratic regulation.

While Canadian growers produced nearly 600,000 barrels of berries last year, the country doesn't balance that added supply with an equal demand, the growers said. Most of its produce ends up in the U.S. market, where it's sold for an American dollar worth 40 percent more than the Canadian dollar.

"I don't mind competing, but this isn't a level playing field," Mr. Decas said. "There's an element of unfairness, particularly for Massachusetts growers."

The situation is "complicated in that most of the berries grown there are from Ocean Spray growers," he said. "But I think its inevitable that growers will look to the government for (regulatory) help."

"If the government doesn't equalize the playing field, we're all going to lose. This is hurting the whole economy," said Hal Brown, who runs the Cranberry Stressline Internet Web site, an information hot line and support network.

"If we talk about Canada, then we have to talk about Wisconsin," said Mr. LaFleur, of the Cape Cod Growers Association. "Wisconsin is by far the largest contributor to the situation here. It's grown tremendously."

Ocean Spray has been a victim of its own success, according to its spokesman, Mr. Phillips. Its growth and profits inspired its competitors, who wanted to "ride the wave" with the local firm -- but then played a critical role in lowering the market prices, he said.

Recent rumors of sales and mergers at Ocean Spray "have raced past all semblance of reality," said Mr. Phillips, although he concedes they're among the company's options. Still, he and other industry experts are confident the market will turn around -- albeit not overnight. The future lies in aggressive marketing and the continued development of new and diverse products, they said.

"We have something no one else will ever have, and that's the name Cape Cod cranberries," Mr. LaFleur said. "The name is synonymous with quality."

"This is a solvable situation. It won't last forever," Mr. Phillips said. "But that doesn't make it any easier now for the small grower. They've put their hearts and souls into this."

Staff photos by Jack Iddon
Top: Thomas Gutierez, left, and another member of the picking crew prepare to collect and ship the berries. Middle: Mr. Gutierez, a member of the picking crew, pulls a barrier to corral cranberries prior to collecting and shipping. The Rochester bogs are owned by Linda and Paul Rinta. Bottom: Mist rises from the water in the background as a worker adjusts tubing in preparation for collecting and shipping berries from one of Linda and Paul Rinta's bogs in Rochester.