Cranberry Industry Bit by Tariffs

Mariani's largest export market was China, but ‘the orders just stopped for us,' the CEO says.

Cars and steel may be grabbing all the headlines as trade tensions mount, but countries that really want to needle the U.S. are springing retaliatory tariffs on the cranberry.
 A quintessentially American export, cranberries are nearly all grown in the U.S. and Canada. It is a trade duopoly, and most of the cranberry bogs in the U.S. happen to be in House Speaker Paul Ryan's home state of Wisconsin.
 “If cranberries get too expensive, they start using raisins or prunes or something that's cheaper that's grown somewhere else,” said Linda Prehn, a Wisconsin grower and president of the Cranberry Growers Cooperative. “If we all get replaced with raisins, we're sunk.”
 The European Union, Canada, China and Mexico have launched retaliatory tariffs on the bitter berry, a species native to North America that has suffered from overproduction in recent years. That is threatening to reduce demand for cranberries, hurting farmers who grow them and leading companies abroad to substitute other juices and berries rather than raise prices for consumers.
 The average price for cranberries has fallen below $30 a barrel—$5 below the cost of production—and growers say they expect prices to slide further as sales abroad dry up.
 Cranberries are a round, red berry grown in bogs from Wisconsin to Massachusetts. They are used in making juice and dried fruit, and touted for everything from their low-calorie count to their effect on bladder health. Cranberry sauce is a staple of Thanksgiving tables.
 That makes them a target for tariffs, which cranberry growers fear will drag down sales. They are already preparing to dump as much as one-quarter of this year's harvest, hoping to cut a persistent glut and boost prices. Many also worry trade tensions will deal a permanent setback to the industry's nascent efforts to sell more cranberries to consumers abroad. About one-third of U.S.
 production is exported, and trade groups estimate tariffs would amount to $50 million each year in an industry that last year sold a total of about $270 million in cranberries.
 “This is coming at a bad time for the industry,” said Brian Wick, executive director of the Cape Cod Cranberry Growers' Association. “These were the markets we were looking at for major growth.”
 The European Union imposed a 25% retaliatory tariff on U.S. cranberry-juice concentrate imports, beginning June 22, and sweetened dried cranberries are on a second list of proposed tariffs.
 That is an additional blow for producers, who have been hit by falling prices recently due to increased crop yields that have led to oversupply.
 Some analysts cite the popularity of sweetened dried cranberries — such as Ocean Spray's Craisins brand—as another driver of the glut. The Craisins' rise in the early 2000s encouraged many growers to plant more and swap for a higher yielding hybrid version.
 At the same time, increased cranberry production from Canada has exacerbated the glut, while waning consumer interest in juice hurt demand. U.S. cranberry handlers disposed of 15% of last year's crop to shore up prices, according to a federal marketing order registered with the Agriculture Department, and have proposed disposing of 25% of the crop due for harvest this fall.
 Ms. Prehn's Cranberry Growers Cooperative of about 25 producers recently emerged from bankruptcy. “I would say most Wisconsin cranberry growers supported Trump,” she said. “They'd hate to see their businesses tank because of these tariffs.”
 Last month, China imposed a retaliatory tariff of 25% on U.S. dried cranberry imports, on top of an existing 15% tariff. Mark Mariani, chief executive of Mariani Premium Dried Fruit, which employs about 400 workers in Wisconsin, said his largest export market was China, and he is watching his warehouses fill with excess supply. “The orders just stopped for us,” he said.

Bogged Down
U.S. cranberry prices are falling as supply outweighs demand.

Sources: USDA, National Agricultural Statistics Service (prices); Census Bureau (exports)

Politics Picks On A Tiny Red Berry
Cranberry-industry veterans say it is no coincidence that countries around the world are targeting the same tiny, regional industry as tensions rise between President Trump and U.S. trading partners.
 They say that House Speaker Paul Ryan, who is from major cranberry producer Wisconsin and who has publicly pushed back against the Trump administration's use of tariffs, is in a position to influence trade policy — even though the Republican congressman will be leaving office after this year.
 “These decisions are all made for political reasons,” said Terry Humfeld, executive director of the Cranberry Institute, an industry organization. Mr. Ryan's office didn't respond to a request for comment.



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