A couple of more thoughts on the CMC vote

6 Aug

I've heard from some folks since the vote in Washington and here are a couple more thoughts.

What did the Independents get?  Why did we do something to support Ocean Spray? Why didn't we just let Spray choke on their fruit? Why didn't we make Spray stop planting?  All good, valid questions.  But the question for ME was what will the independents pricing do if we don't do anything?  The answer?  There is nothing, absolutely nothing to suggest that our prices will go up in the next 5-10 years if we do nothing.  This huge inventory is dragging the whole industry down.  We have history to guide us….a VR in 2000 and 2001 worked.  In fact, the independents prices came up fast than Ocean Spray's.  True, the industry had a hot product in that time frame which was SDCs.  This time I feel that we have the export market.  China is primed and ready to go.  India has a longer path but has huge potential.  The US consumption of cranberries is 2lbs/person/year.  China's is .01lbs/person/year.  

Do I think that Spray epically screwed up the supply?  Yes I do.  Clearly in 2005-2006 when the supply was in balance, they went on a SDC plant building spree and encouraged plantings to fill those dryers.  Did anyone at Spray lose their job over this miscalculation?  Not to my knowledge. Most Spray growers probably think that this planting was a good idea, since they've had a good run of great returns, certainly way higher than the independents. They showed us.  But now the effect of this oversupply is knocking on Spray's door.  They've made some critical errors. They are going to have to make some hard, hard choices in the near future.  Independent growers have already made these choices and on the farm we've cut to the bone, taken second jobs, sold off stuff.  We would LOVE to see $25/bbl returns.  Spray growers fear them but I'm sure they have big bank accounts from the past 6 years to soften the blow.  

John Decas was famously right when he stood up at at CMC meeting and asked "what gives Spray the right to unilaterally increase the supply by 6000 acres?" And "The industry is in balance". So John was right.  But don't forget , that independents planted as well.  Independent handlers increased their SDC capacity.  Spray isn't the only one that increased supply.  

The CMC has the overall data.  The industry reports the sales figures into the CMC so we know if we are in balance as an industry.    The CMC members have known for a while that this train wreck was coming.  The question in my mind is, does the CMC committee have the guts to manage the fruit supply in the future, or are we going to blindly listen to our handlers and ignore the facts?  Did we learn our lesson?  


4 Responses to “A couple of more thoughts on the CMC vote”

  1. Felix August 6, 2017 at 12:26 pm #

    Corporate greed listens to no one, but money.

    • jeff Bentz August 6, 2017 at 7:49 pm #

      this doesnt work for us if Spray continues to plant, it does however work for Spray because we just made room for them, What a F”in joke,

    • Felix August 7, 2017 at 7:32 pm #

      Don’t forget these Spray checks are sinking one by one still!

  2. Tah August 31, 2017 at 1:06 am #

    The lesson learned is quasi government entity runniing the show and independents trusting others to watch their back.

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