Small cherries get reprieve in Washington

Dan Wheat

Capital Press

A marketing committee decided to still allow packing and sales of small cherries even though an economic analysis shows they substantially negatively affect price in weeks of heavy volume.

WENATCHEE, Wash. — The Washington Cherry Marketing Committee has voted to keep 12-row red sweet cherries after an economic analysis showed a negative affect on prices is substantial in only a few weeks of heaviest shipments.

But the impact can be huge and stretch for more than a few weeks, said Norm Gutzwiler, a Malaga grower and alternate on the committee. A lot of growers are "very disappointed" with the committee's decision because they believe banning the 12-row would help the industry make more money, particularly with crops getting larger, Gutzwiler said.

The 12-row is the smallest cherry the committee allows for packing and shipping. Size is measured by the number of cherries that can be packed in one row in a 20-pound box, hence the larger the fruit the smaller the number.

A 2007 survey showed the industry about evenly split on banning the 12-row after 40 percent of the crop was 11-row and smaller in 2006. In 2009 and 2012, large crops led to lower prices. Small cherries were blamed for plummeting prices. The 13-row was banned years ago.

But the average size of red sweet cherries has been increasing and the percentage of 12-row has been shrinking, Desmond O'Rourke, a retired Washington State University agricultural economist, said in his report to the committee.

O'Rourke talked at the Washington State Horticultural Association annual meeting in Wenatchee, Dec. 3, a few hours after the committee, that had already seen the report, voted.

The 12-row averaged 10 percent of the Bing crop from 2002-2007 but less than 1.8 percent of all red sweet cherries from 2008 through 2013, O'Rourke said.

While the percentage of large cherries is increasing through progressive pruning, weather events can cause swings in fruit size, Gutzwiler said.

The highest average share of 12-row was 2.26 percent in 2013 which lowered the average price by only $1.22 per 20-pound box over the season, O'Rourke said.

The highest average share of 11.5-row was 10.15 percent in 2012 which lowered average prices by $3.91 per box.

But smaller cherries are more plentiful early in the season, so O'Rourke looked at just those weeks.

At the highest share of 12-row, 6.88 percent, average price would have been reduced by $15.92 per box and at the highest share of 11.5-row, 20.36 percent, the average price was reduced $6.39, he said.

"These results suggest that 12-row are a problem only in a few weeks of heavier shipments," O'Rourke wrote in his report. "Eliminating 12-row would have substantial benefit on average prices in such weeks."

He acknowledged prices can be slow to recover once they fall. Removing 11.5-row would not increase prices enough to offset the loss in volume, he said. It would particularly hurt growers of Chelan, Lambert and Van varieties that average about 20 percent 11.5-row, would impact grower returns, raise unit costs of packing and disappoint retailers that generate substantial sales and profits from 11.5-row, he said.

"Des' point was that if we banned 12-row we could increase returns by $4 per box. That has a huge impact," Gutzwiler said. "The argument is the market will take care of itself. But if the price of 12-row is so low, you may not get your packing charges back and it continues to drive prices down for everything. Des said we're nearing the saturation point where we will see prices go down."

Stemilt Growers Inc., the largest cherry packer, wanted to ban the 12-row but Chelan Fruit Cooperative and several South Central Washington companies wanted to keep 12-row, Gutzwiler said.

B.J. Thurlby, committee administrator and president of Northwest Cherry Growers, an industry trade group, said the vote was 11-5 with good logic on both sides and that debate likely is to continue. Most believe the market impact is negligible, he said. The five favoring the ban believe it's time to raise the bar on quality and that banning 12 and 11.5-row for Rainier has made that variety stronger in the market, he said.