Canned pear assessment rises
Northwest processors are canning fewer pears.
The promotional assessment on Pacific Northwest processed pears will increase from $5 to $7.11 per ton this season in an attempt to keep the Pacific Northwest Canned Pear Service functioning.
The volume of pears grown for processing has declined significantly over the past 15 years, B.J. Thurlby, manager of the Processed Pear Committee, which administers the federal marketing order for processed pears, noted during the committee's annual meeting.
Pacific Northwest canners have been processing fewer than 150,000 tons in recent years, down from 220,000 tons in 1999. Last season's volume was 136,000 tons.
The early estimate of the 2009 processed pear crop in Washington and Oregon is 134,000 tons, according to the Washington-Oregon Canning Pear Association. Northwest processors also can a small volume of California pears.
If fewer pears going to processors means that growers are making more money selling their pears on the fresh market, that's a positive trend, Thurlby said. However, the processed market is important in that it sets the floor for the fresh market.
As processed tonnage has declined, so has the revenue of the Pacific Northwest Canned Pear Service. In the early 2000s, the organization had a budget of over $1 million a year. For the coming year, without an assessment increase, its budget would have been $724,000, with staffing accounting for more than half of that and travel costing another $90,000. The organization has three staff: promotion manager Mark Miller and two regional managers.
"How do we move forward with a business that's just about breaking even every year?" Thurlby asked committee members during their annual meeting in Portland, Oregon, in late May. "There's no money in reserves."
A survey of Northwest pear canners showed that they all felt the Canned Pear Service had value and they wanted it to continue, he said.
The objectives of the Canned Pear Service are to increase demand for canned pears from the Northwest; be a source of information and promotions relating to canned pears; and be the industry contact for U.S. Department of Agriculture food program purchases, which are an important outlet for canned pears.
About 65 percent of canned pears are sold through foodservice outlets or club stores, 24 percent of canned pears are sold at retail, and 11 percent go to USDA programs, according to the Canning Pear Association.
Miller told the committee that the promotion program focuses mainly on foodservice, since it has become too expensive to promote in the retail sector. The budget includes $174,500 for foodservice promotions in the coming year.
"We decided a while back that most of our resources should go to the foodservice market where we get the biggest bang for the buck," he said.
Committee member Mike Oates of Hood River, Oregon, who proposed increasing the assessment to $7.11, said it is important to keep the pear industry alive. "It's not just for the canned pear industry but the pear industry in general," he said. "It sets a base for the industry."
Oates said he wouldn't hesitate to pay a higher assessment rate, considering the ramifications of not having an outlet for lower grade fruit. "If you want to maintain the program, you have to pay for it. We're at the point where we either need to do it or don't. Canners say they want to keep doing it."
Don Gibson with Independent Food Processors Corporation, Yakima, Washington, said the Canned Pear Service had done a good job slowing the loss in demand, but he was not sure if putting more money into the service would gain anything. "If we spend another $300,000, what's the benefit of the $300,000 we're going to spend?" he asked. "Is that going to be measured in some manner? If we're going to increase the assessment, there should be some goals and objectives and some kind of measurement of what we're gaining from it."
Committee member Laura Spencer of Truitt Brothers in Salem, Oregon, agreed. "I certainly don't want to impose more fees on growers," she said. "We need to have some results, and it has to be measurable."
The committee voted to increase the assessment rate starting with the 2009 crop. Growers will pay a total assessment on processing pears of $8.41 per ton. That's made up of $7.11 a ton for promotions that will go to the Canned Pear Service, $1.00 for research, 10 cents for committee operations, and 20 cents for management and administration of the committee.
Spencer was elected chair of the Processed Pear Committee for the coming year, with Peter Verbrugge of Yakima, Washington, elected as first vice chair. Eric Strutzel of Cashmere, Washington, was elected as second vice chair, while Robert Ball of Yakima was appointed as secretary and Oates as treasurer.