2018-06-07 / Front Page

Cherry diversion set aside

But lots of cherries remain from 2017 crop

A federal judge’s ruling has forced an emergency election of tart cherry industry growers and processors.

The outcome will likely come too late to allow a newly seated Cherry Industry Administrative Board (CIAB) to establish a set-aside percentage for an abundant tart cherry crop, further clouding the chances for 2018 cherry prices that benefit growers.

“The industry is in chaos,” said Don Gregory, a grower and processor from Suttons Bay Township who was forced off the CIAB by the judge’s decision. “The potential for doing any kind of a meaningful restriction is small at this time. Processors are trying to find a business plan that works for them and growers are looking over their interests.”

U.S. District Judge Gordon J. Quist ruled in favor of plaintiff Burnette Foods of Grand Traverse County, which claimed in a lawsuit that CIAB directors who have a relationship with a cherry cooperative based in Ludington have too much influence in CIAB policy.

CherrCo is a federally-recognized co-op based in Ludington whose members collaborate in securing financing and setting minimum prices for sales made to processors.

Consequently, three of the our four CIAB directors for the Northern Michigan District were ordered off the board. Gregory and Al Steimel, who represent Leelanau Fruit Co., joined Calvin Lutz of Benzie County in being unseated. Bill Sherman, who is listed as the manager of Burnette Foods, retained his seat.

Elmwood Township grower John Gallagher has already been voted in as a replacement for Lutz. But Gregory, Steimel and Tim Brian of the Smeltzer Company in Benzie County are all vying for two seats as processors on the board.

Steimel confirmed that he is not presently a director of the CIAB. “I’m running,” he said.

When asked if there will be a set-aside, he replied, “That’s a question I can’t answer, but that is an important question on everybody’s mind.”

Ballots didn’t go out until Monday, and are due tomorrow. The plan is to announce winners on Monday.

But the USDA usually takes about three weeks to process the paperwork for board members, and CIAB guidelines call for the group to meet about July 1 to establish set-aside percentages for growers. The hope now is to meet July 6.

And Gregory says if he’s elected, the results may be challenged.

Set-asides establishes industry-wide limits on how many tart cherries can enter established markets. Growers in Leelanau have been apprehensive about dealing with a large percentage because so many tart cherries went unmarketed from the 2017 crop.

“People have been very anxious about whether we’re going to hold a meeting,” acknowledged Molly Woods, executive director of the CIAB. “They have other marketplace concerns (including) foreign competition.”

County grower Jim Bardenhagen says cherry orchardists may be left to fend for themselves without a set-aside, which is designed to bolster prices by preventing the cherry market from hitting a saturation point.

“Growers will just go with whatever the market will bear. We’re not sure. It’ll depend on what the processors want to take, and of course there’s a lot of distance between here and harvest.”

Nikki Rothwell, coordinator of the Northwest Michigan Horticultural Research Center, said small growers are hoping the next set of CIAB directors will help their cause.

“There are some growers who may see it as an advantage,” she said.

Meanwhile, Gregory, considered an industry leader, said cherries are facing market problems as well as tailwinds.

On the positive side, there’s been growth in the tart cherry juice market on the basis of health benefits. Also, the U.S. Department of Agriculture announced earlier this month that it plans to purchase about 25 million pounds of tarts for programs including school lunches.

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