Michigan tart cherry farmers consider ways to survive after tariffs revoked

Jan 30, 2020

Michigan’s tart cherry industry is dying out to the tune of $5 million dollars of lost impact to the state since 2010, according to a Michigan State University study.

After another trade loss in January, cherry farmers are considering desperate measures.

A meeting of the Cherry Industry Administrative Board was tense, with several tart cherry farmers voicing frustration about the future of the industry.
Credit Max Johnston / Interlochen Public Radio

Industry meeting turns into a 'funeral'

In January, the Cherry Industry Administrative Board (CIAB) held a meeting at the Grand Traverse Resort in Traverse City. The gathering is usually an opportunity for cherry industry insiders to network and rub shoulders with other growers.

But this meeting was different.

“Everybody came expecting a birthday party and ended up at a funeral,” Cherry Grower Nels Veliquette said.

Veliquette and other tart cherry farmers are struggling to stay afloat. Many thought tariffs announced last year from the federal government would help U.S. growers compete with cheap foreign competition.

Those tariffs on cherry producers in Turkey cut some imports by 80 percent, according to a report from the CIAB.

But the federal government announced they were revoking them on Jan. 14. In a report on the reversal, the U.S. Commerce Department disputed several claims made by the Dried Tart Cherry Trade Committee.

"The United States International Trade Commission determines ... that an industry in the United States is not materially injured or threatened with material injury by reason of imports of dried tart cherries from Turkey," the report reads.

 

Attorney Elizabeth Drake goes through trade data on foreign imports of tart cherry products at a meeting of the CIAB.
Credit Max Johnston / Interlochen Public Radio

The Commerce Department relied on data submitted by importers and claimed dried tart cherry imports didn't effect domestic cherry prices nearly as much as U.S. growers claimed in their petition.

Veliquette says that’s not true, but the industry likely doesn’t have the time or resources to appeal it. In the meantime, he expects Turkey to once again flood the market with their tart cherries.

"Everybody knows what Turkey has been doing to the tart cherry industry and that hasn’t changed, isn’t changing and won’t change," Veliquette says.

At the industry meeting several farmers said they felt helpless to fight what could be the slow death of the industry in Michigan.

Third generation cherry farmer Dave Meister runs Apple Valley Orchards in Manistee. He expects to get 8 to 15 cents per pound for his tart cherries this year, which is about 10 cents less than last year and well below his cost of production.

"My kids, neither one of them want anything to do with (the farm)," Meister said. "There’s no way to make a decent living, you can work all day and all night and still not make minimum wage.”

The Federal Marketing Order

Meister said the industry has to take drastic steps to save itself, like grappling with a type of supply control called the Federal Marketing Order (FMO).

The FMO is meant to provide stability to the tart cherry industry's volatile supply. Some years cherry crops produce so many cherries that the price could plummet. To prevent this, every year the CIAB withholds a certain amount of cherries from the market.

By setting those aside, some are frozen and preserved for later, the CIAB prevents tart cherry prices from getting too low. In 2019, the industry voted to withhold 35 percent of that years yield. 

Meister said he’s part of a growing group of farmers that think the FMO is a bad idea. He says sell the cherries you have, the argument being that would increase competition.

"If you don’t have a market for your fruit, you probably shouldn’t put it up in the freezer, probably shouldn’t go borrow money and probably shouldn’t sit on inventory you don’t have a sale for," Meister said.

With domestic cherry growers losing more and more of the U.S. market to imports, many have been storing more and more cherries because of the FMO.

Preserving cherries costs money. There is a recent push to get insurance coverage on those withheld cherries to cover some of the costs, but farmers can only hold on to them for so long before they spoil.

Meister grows apples, peaches and tart cherries at his farm in Manistee.
Credit Max Johnston / Interlochen Public Radio

Meister said selling all your cherries might increase demand, but admits that means farm closures are inevitable.

Other farmers say the industry could benefit from a crop failure. If supply were low then theoretically the price would shoot back up.

To be clear, the FMO is still very popular in the industry. On top of maintaining a healthy price, the plan includes a communal budget for marketing cherries as a healthy and tasty product.

Nels Veliquette says the FMO has been a lifesaver.

"There’s a lot more to the Federal Marketing Order than just supply management. When we talk about collective data and collective marketing those are things that really do help us as an industry,” he said.

Veliquette added that the root of the industry's problems are related to trade. That needs to be changed, not the marketing order, he said.

The FMO is up for a renewal vote in March.

Michigan's third largest crop

A report from Michigan State University found the tart cherry industry brought $91 million dollars to the state in 2016, but that figure has been declining at sharp rate.

Agriculture Economist Bill Knudson said Michigan's tart industry may be gone in 10 years. He added that would mean a significant economic and cultural change to northern Michigan.

"Some people may grow different crops … some people may get into the winery business," Knudson said. "Will you see some farmland get converted into housing? (There's) all kinds of questions.”

As a last-ditch push to save itself, the tart cherry industry is ramping up lobbying efforts. Many farmers want the US Department of Agriculture to buy more cherries for food banks and meals in prisons. Several plan to ask the state to put cherries on lunch menus in public schools.

On Jan. 21, the Cherry Marketing Institute filed a complaint with U.S. Customs to investigate more foreign imports from Brazil, who they say are breaking U.S. trade law.

Some farmers say if all that doesn’t happen soon, Michigan’s cherry industry could be dead.