Would a handler withholding really have the ability to cap the crop?

15 Jan

The devil is in the details. Ocean Spray’s support for a handler withholding has sent me to the internet and a re reading of the marketing order. Never thought that would happen!

As I understand the regulations, there are two ways to implement a volume regulation; a producer allotment and a handler with hold.

We as growers are probably most familiar with a Producer allotment, since that is the method we utilized the last two times. In that case, each grower receives a sales history and additional ramp up for newer acres, as calculated by the CMC. The CMC agrees what percentage of the US crop should be restricted from delivery. So if the set aside is say 15%, growers can deliver 85% of their sales history plus their ramp up. ( Remember, a growers sales history is sort of a “super average” since it represents their 4 best out of the past 6 years) In this case, the handlers would receive then their contracted growers allotment. Handlers are able to re-spread allotment, so virtually all the allocation is delivered. Not all handlers did this in 2000, which led to some angst. A producer allotment allows the CMC to identify how much fruit supply they want to bring in and cap the crop at that level. Excess production is disposed of by the grower. It is not binned, stored, transported.

A handler set aside is a bit different and I don’t see how it can cap a crop. In this case, prior to the harvest the CMC estimates the size of the crop, same as above. The CMC identifies the amount that is to be restricted. Growers deliver the fruit and handlers receive, clean, bin store and freeze the fruit. Then the restricted amount of fruit is destroyed. The grower sales history and ramp up don’t come into play…it is a straight across the board disposal. If there was say, a 10% set aside, all growers, big or small, would have 10% of “their fruit” destroyed. Each handler would dispose of the fruit they paid to receive, clean, bin and store. That cost would get passed along to the grower who would get paid for the crop he delivered, minus the destroyed %. While it seems fair, is it? Is it fair to growers who grow average crops and in the set aside year has a poor year? He still has 10% of his crop destroyed. Is if fair to the grower who has a record crop, up 30% to have only 10% of his crop destroyed? Furthermore, a handler set aside won’t cap the crop at a certain amount. It will however dispose of a certain percentage. A producer allotment allows a grower to bring in a certain amount and avoids extra costs.

As usual, I might have this wrong since I am not a CMC member. I am thankful that Ocean Spray has put out some of their thoughts prior to the CMC meeting and I am hopeful that this is the start of a dialog, not the end.

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