This time of year, it is so much fun to speculate!

27 Oct

We are just finishing up harvest in Wisconsin…a few of the big growers are still going but the early results are showing a crop in WI that just didn’t get large.  Lots of theories, like not enough heat, too much ice on the edges of the beds, early rain…on and on.  Almost everyone I talked to was down. Two growers were above their estimates.  No lines at the receiving stations.  Back in February, the CMC predicted 8.8mm barrels for the US.  Then in August the CMC lowered it to 8.6.  Last year we grew a crop of just over 8mm barrels in the US, with WI producing 4.9mm barrels of that.  On the other hand, MA is growing a huge crop, which for them is 2.3mm barrels.  Other growing areas are on par with last year.  I guess at this point, I can’t see the US as producing a crop even as big as last year..the 8mm barrel number.  How low will it go?  WI is down.  Is it as low as 4.6mm barrels?  Maybe, we will know soon.

Last year Canada and specifically, Quebec, really delivered.  They had a huge crop.  I’ve heard multiple reports of their crop being down in spite of their added acres.  The reports just aren’t as detailed from that growing area, but can they do the 3.4 (Canada)/2.4mm(Quebec) barrels this year that they produced last year?

Add all of the above to the fact that CMC reports that we as an industry sold 1,000,000 barrels more in the 2014 crop year than the previous year.  Usage is up and the crop at best is level, more likely with the crop reports from WI and Quebec (they produce 70%+ of the supply), the crop will be down.  This will be the first time in a few years that we will take in less than we sell.  This means we will start to impact our inventory numbers.

This is where things get really interesting, I think.  Clearly, we have lots of inventory…but when you look more closely at the CMC numbers, the inventory is in the liquid form (well, maybe frozen liquid…concentrate).  At the end of the 2014 crop (remember that was just 8/31) we had in inventory 2.7mm bbls whole frozen fruit …barely enough to keep the dryers going until the end of the year…and even now some lines are shut down in WI due to lack of fruit.  In processed inventory (finished goods inventory) we were down to 1.8mm barrels from 1.9 the same time last year.  We will have enough dried cranberries for the fall season, but the inventory is clearly tightening and will certainly be less next year.  The 2015 crop will be up and running after the first of the year, and we will have plenty for everyone…until we run out. I really do think the dried cranberry inventory could be significantly impacted by this harvest. And, don’t forget that it is the drying process that makes so much of the concentrate…so finally THAT inventory can start coming down.  Even if we have enough fruit to run they whole year…it certainly won’t be in the right location.

It is really too bad that we can’t make that concentrate into dried cranberries….

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3 Responses to “This time of year, it is so much fun to speculate!”

  1. Kristina October 27, 2015 at 8:08 am #

    Sounds like we better put in a few thousand more acres we wouldn’t want to go into a harvest with no inventory that would be horrible we may break even or even make a penny we better plant. Since sales are up we should put in a few thousand acres just to plan for future markets like we did in 2005 and up that worked out great.

    • lindaprehn October 27, 2015 at 8:12 am #

      Well I’m pretty sure that one down year doesn’t mean we need to plant!! Growers need to realize that the anticipated price increases might get them back to break even. Let’s not start that planting thing again! We know how that turned out. We could easily be back to a 12mm barrel crop next year without planting. Yikes.

      • George Metesky October 10, 2017 at 12:09 pm #

        We’ll never get to optimal by just planting without a strategy in place. Why can’t we have added acres going to contract farming – fixed price, certainty of demand. Isn’t that was agribusiness should be?

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