Iowa Public Television

 

Cranberry Glut: A Lesson in Supply and Demand

posted on November 22, 2002


New rules and new procedures seem to be the likely outcome of the Prodigene matter. Prodigene is the biotech company that is the target of government litigation for its failure to properly clean-up a field where it had raised a biopharmaceutical crop of corn.

The incident has provoked demands for closer regulation by not only environmental groups, but by food processors and grocery marketers. For their part farm state lawmakers and farm groups are trying to control the damage. It's their hope that biopharmaceuticals could develop into an important and lucrative new sector in the agricultural economy. For example, while Brazil might continue to expand soybean acres, American farmers could profit on far fewer acres by cultivating transgenic corn for the production of insulin.

Still such niche markets have a way of peaking and then imploding. A case in point is the recent history of a crop that grew, rapidly, from niche status then fell from the weight of its own production.

 

As America's grain and oilseed producers count their blessings this Thanksgiving, they needn't look further than the cranberry sauce to realize there is much to be thankful for.

The law of supply and demand is casting an ominous cloud over cranberry bogs from Wisconsin to Massachusetts. Cranberry growers are weathering a surplus that has them up to their waists in cranberries… literally and figuratively.

In the mid 1990's cranberry prices peaked at about 60-dollars per barrel, then precipitously fell to about 12-dollars per barrel. Today the fruit is priced in the 20-to-30 dollars, which is about the break-even point for most growers.

Some producers claim the Massachusetts-based Ocean Spray Cooperative is to blame for the poor prices.

Last week, Northland Cranberries of Wisconsin, filed an Anti-Trust Lawsuit against Ocean Spray saying the rival has monopolized the industry.

Northland, which at one time was Ocean Spray's largest grower-member, claims Ocean Spray's arrangement with foreign growers amounts to a "cranberry cartel," which ties up sales and production of cranberry concentrate.

Ocean Spray, which controls about 75% of the cranberry market, says the cooperative competes fairly and it will defend itself vigorously in the lawsuit.

Northland is seeking undetermined monetary damages. The company also wants an injunction stopping what it calls, "Ocean Spray's anti-competitive and exclusionary conduct."

 


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