2009 market could open more doors for cherries in 2010

05/10/2010 01:16:13 PM
Tom Karst

No pain, no gain. If that is true, marketers said painfully low f.o.b. cherry prices in 2009 created promotion opportunities that caused more households to buy cherries.

In that sense, the big crop of cherries in the Northwest in 2009 — 20 million boxes marketed and millions more left unpicked in orchards — helped pave the road for future market success.

With the entire crop of cherries setting fruit at the same time, the 2009 season was  a “perfect storm,” said Loren Queen, marketing and communications manager for Domex Superfresh Growers, Yakima, Wash.

Both growers and retailers suffered deflation compared to the previous year.

While growers found f.o.b. levels of $20 for 10 row size fruit — only half of 2008  levels — retailers promoted cherries at prices well below 2008.

For example, retailers promoted cherries at an average price of $2.18 per pound on July 24 2009, compared with $4.06 per pound the same week in 2008.

Weathering that storm a year ago should benefit the market this year, marketers believe.

Mac Riggan, vice president of marketing for Chelan Fresh Marketing, Chelan, Wash., said cherries are typically purchased by 30% to 35% of U.S. households.

With production trending higher, marketers need to get more households buying cherries, and last year was helpful in that respect, Riggan said.

“We need to get to 50% penetration, and we saw some of that last year,” he said.

Riggan said more consumers buying cherries will translate to better demand and a stronger floor under the market.

While the overlap between California and Northwest cherries may raise some uncertainty about early season pricing, marketers believe the elongated marketing window, slightly reduced volume and better fruit size in 2010 should make the 2009 marketing year fade quickly in the rear view mirror.

Big volume and a compressed marketing window spelled trouble for Northwest cherries last year.

The Washington State Agricultural Statistics Service reported volume of fresh-market cherries in Washington totaled 182,000 tons in 2009, up from 85,000 tons in 2008 and 129,000 tons in 2007.

The price per ton for fresh market cherries sunk to $1,120 per ton in 2009, down from $3,350 per ton in 2008 and $2,140 per ton in 2007.

The USDA reported f.o.b. prices for 10 row bin cherries ranged from $28-30 per carton on July 5 in 2009, down from $55-60 per carton the same time the previous season.

Eventually, the trading range for 10 row size fruit settled in at $20-22 per carton by early August, compared with the $40-45 range the same time in 2008. Smaller cherries sank below $10 per carton at some wholesale marketers last year.

This year, Chuck Sinks, president of sales and marketing for Sage Fruit Co. LLC, Yakima, Wash., said he believes cherry marketers will do what it takes to get the crop moved.

“I’m a firm believer to get out there and get the crop moved,” he said.

Sinks said he anticipates fair prices for growers and retailers this year.



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