Moving larger crops in the future
Better communication between buyer and the field is needed.
Focus on what you can control was the message given to growers by cherry marketers who shared thoughts on how to move larger cherry crops in the future during a panel discussion at the Northwest Cherry Institute meeting in Yakima, Washington.
Last year's late start of the Northwest cherry season was nobody's fault, said West Mathison, president of Stemilt Growers, Inc., of Wenatchee, Washington. But the start date is a big key in selling a 20-million-plus box crop, he explained. The historic average start date for Washington State is June 3. He's hopeful after two years of late startsJune 13 in 2009 and June 10 in 2008weather will return to a more normal spring and early summer.
Although growers can't control the weather, they can control things in their orchard that influence qualitythings like crop load and the leaf-to-fruit ratioMathison said. He noted that Stemilt Growers will be holding workshops this winter to highlight horticultural practices like pruning and other basic concepts to help growers zero in on producing quality fruit.
Yakima Valley's Sage Fruit Marketing and Valley Fruit Company President Peter Verbrugge encouraged growers to look at their fruit portfolio. "As you look at your varieties, how do they fit with what the consumer wants and what the packer and marketer want? If you have Tietons or Chelans but they're grown in a later area coinciding when Bings peak, while it may have been a good idea at the time to keep your crews busy, those varieties at that timing are not going to be desirable."
Mark Zirkle's advice to cherry growers who want to remain viable in the future is to produce what consumers want to buy and will keep buying. Zirkle, president of Rainier Fruit and Zirkle Fruit Companies in Selah, Washington, said that in today's competitive market, it's all about quality. "One bad experience and the consumer will move on to other crops like blueberries."
All three marketers acknowledged that the quality attributes of size, firmness, and flavor become a moving target when there is an abundance of product. Firmness standards are in place at most packers, with minimum levels that must be met before fruit is accepted.
Mathison noted that at Stemilt, cherries must meet a firmness standard of 220 (based on the Firmtech system), however, the firmness number moves up as the season progresses. Cherries going into an ocean container need to be around 300 to 310.
"We have firmness levels that we won't accept," said Zirkle. "But for soluble solidsthat's tricky. What's the ideal level for Cristalina versus Lapins versus Bing? The varieties are all different."
Verbrugge agreed that while firmness is a leading indicator of fruit quality, size is also important. Packers usually start the season with minimum levels for both size and firmness, but the bar may get raised during the season if oversupply exists. "When you're in a commodity businesswhich we arewhen supply increases, the quality bar gets raised."
Zirkle shared that they stopped packing 11-row cherries last year on July 2. "But we wish we would have stopped a day or two earlier," he notes.
The difficulty in estimating crop size, coupled with the volatile cherry market, makes planning very difficult, Verbrugge said. Accurate crop forecasting is needed to give retailers a timeline for advertising and promotion, but in some years, crop size and the market change hour by hour.
"As a packer-marketer, the hardest thing is going into the crop," he said. "You have a basic plan, but when you get into cherries, the market changes hourly. It's easy to Monday-morning-quarterback the thing, but you've got to take what the cherry deal throws at you."
Verbrugge shared that even with the best of information at his fingertipsinventory of what had been packed, what was coming in, current f.o.b. prices, and a sense of where the market was headedhe still picked a block of Bing that never got packed.
Transparent information from grower to buyer is needed to help growers decide if it's economically viable to harvest an orchard. During the 2009 crop, the data sharing was too slow to provide growers with real-time knowledge, Zirkle said.
Mathison echoed the need for tighter communication during harvest, giving feedback to the field. "Nobody wants to pick fruit and then throw it away. But with the speed of which things occur, we have to have extremely disciplined communication systems to get feedback back to the field as quickly as possible. Because, ultimately, it was the last 50 tons that pushed over the whole system last year...."
Mathison said that when every sales order, regardless of price, becomes a "good" order, the market has lost integrity. "The market has integrity when a seller says 'no' based on price," he explained. When market leaders get in a position of weaknessas they did last yearthe market integrity breaks down.
"What gets us in a position of weakness is too much unpacked fruit, too much packed fruit, or when we lose customers based on quality," he said.
"These are macro terms, but everyone has to look at them from a microlevel to see how it impacts them," Mathison said, adding that Stemilt Growers is looking at what the company internally can do to minimize risk in the market time frames that can create market weakness.
The panelists estimated that at least five million boxes of cherries didn't make it into a box last year, meaning there was potential for a 26-million-box crop.
Yet, they were still optimistic for the coming season.
"I think we could have sold all of the cherries last year if we hadn't had the 'perfect storm' of a late start and heat wave," said Zirkle.
Verbrugge said that there is pent-up demand for sweet cherries and a large, untapped demographic of potential cherry customers. Only 30 percent of consumers purchase cherries, he noted.
Mathison said the industry needs to show confidence in the new year and new season. "2010 statistically has a very good chance of being a good season. There's nothing to say that it won't be a good season."