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January 12, 2024
Editor’s note: This is the first in a two-part series looking into the tart cherry industry. The second piece will focus on additional concerns with labor, housing, processing, and how vertical integration and diversification has helped operations survive the downturn.
On Memorial Day weekend in 2023, Doug White brought an excavator to his property. By Monday, the tart cherries trees on his farm were torn from the ground — some of them 6-year-old trees just coming into fruit.
White, a 64-year-old third-generation grower in northwest Lower Michigan, had had enough. It was a difficult decision, one not made lightly or without great reflection. “I feel bad about it, how can you not?” the Elk Township farmer says while clasping the armrests on a wicker chair on his back porch.
From here, he can see the empty fields where cherry trees were once precisely positioned, like soldiers. He scrunches his face and pauses for a moment before reflecting on his decision.
For several years, being in the tart cherry industry has been a battle for White and many other growers. Just a few miles to the west of White, along highly traveled U.S. Route 31, passersby can see ripped-out cherry trees on the 110-acre John Pulcipher family farm in Acme Township.
“It’s sad, but when you are losing money, you’ve got to take the emotion out of it and go with the hard facts,” says White, who with his brothers, helped raise cows, cherries and apples growing up in the region.
Eventually, the brothers broke off, with White taking over and expanding cherry production northeast of Traverse City, widely known as the “Cherry Capital of the World.”
It's this area, as well as southwest Michigan, where 70% to 75% of the U.S. tart cherry production is grown.
With its sandy soils, rolling acres and the lake effect created by Lake Michigan, the region is prime for tart cherry production and has been host to the National Cherry Festival since 1925, drawing a half-million visitors every July.
In 2022, Michigan produced 180 million pounds of tart cherries with a value of $36.5 million. This year’s crop is a little less, estimated at 120.5 million pounds. Harvest, particularly in recent years, has been highly variable.
As farmers sell off property or convert it to other crops, the cherry business is contracting and concentrating, as is processing. What it comes down to is the price growers receive versus the cost of production, and there’s an onslaught of factors playing into that equation.
Some growers are faring better than others, influenced by size, dynamics, location, and access to processing and labor.
Twenty years ago, Michigan growers received an average of 35.4 cents per pound, according to USDA. It’s baffling given inflation, but this year the average is about 20 cents, and it was only a few cents more a year earlier.
It’s been like this for some time, as 18 to 32 cents a pound was the price from 2017 to 2021.
According to a Michigan State University study, cost of production for tart cherries is estimated between 40 and 44 cents per pound, when factoring in operational and harvest costs, as well as land and orchard establishment outlays.
White helped supplement the farm’s income by serving as the Acme Township supervisor, and his wife, Michelle, worked for the school system. “But at some point, you have got to cut your losses,” he says.
By September, a good chunk of White’s 80 acres was divided into 5-acre lots, with three already under contract to a relatively new and expanding enterprise in the area — the 13-week, Traverse City Horse Show (TCHS) at Flintfields Horse Park in Acme. Horse enthusiasts need places to stay, as well as places to house, ride and feed their horses.
Created in 2015, TCHS has grown into one of the top equestrian events and venues in North America and one of the few Olympic qualifying events, drawing interest from places such as Florida and Texas where it’s too hot in the summer.
“It’s brought a lot of wealth, bringing in more capital to the area than all the festivals in the area combined,” says Dorance Amos, Elk Township cherry and fruit grower, who rents nine units of housing to horse show ag labor. “This is a little income that helps offset some of our cherry losses.”
Interest is growing. In its ninth season this summer, TCHS awarded more than $7 million in prize money, a significant increase from $1.5 million in 2019.
An economic report released in 2021 says TCHS has a $128.4 million direct impact in Grand Traverse and the surrounding counties, which includes event hosting and capital improvements. TCHS operations resulted in $112 million in shopping, recreation, dining and lodging.
Across the street from the Flintfields Horse Park is a 100-acre parcel being converted into 5-, 10- and 20-acre parcels called Grand Prix North.
White plans to keep 10 acres, including some of his sweet cherry acreage, which is a different market. Sweet cherries produce a more shelf-stable product, sold mostly into the fresh market, unlike delicate tarts that need to be processed — pitted and usually frozen, dried or turned into juice or pie filling — within 48 hours.
The cherry industry is peculiar in many ways, requiring a level of endurance. Without diversification into other commodities (such as apples, peaches, row crops, etc.), new farm marketing strategies or vertical integration to control the commodity from field to final destination, many growers have been forced to swallow losses more often than turning a profit.
Inflation and cheap imports are at the core, but the industry is also challenged with labor costs, invasive pests, crippling weather patterns, a declining number of processors and an outdated marketing order.
A federal marketing order — created in 1997 and supported by growers in Michigan, New York, Pennsylvania, Oregon, Utah, Washington and Wisconsin — was designed to stabilize tart cherry prices by estimating crop production and aligning it with demand by restricting what growers could sell.
This was regulated at the processing plants, and if necessary, growers could be forced to “divert” a portion of their crop by either dumping them on the ground or selling for a hugely discounted rate for a processor to process and store. The reserve could be taken out in bad years or for new uses. It was designed when virtually no foreign product was coming into the U.S.
Most growers supported the marketing order until Michigan had a crop failure in 2002 caused by deadly, late-spring frosts. Turkey, the world leader in cherry production, was more than willing to step in and fill the void when processors were looking to source cherries. “They haven’t left, and they’ve been dumping Turkish-government subsidized cherry products here ever since,” Amos says.
Most of it was initially coming in as concentrated juice, but Turkish dried cherries and other products have followed in mass.
“We’re used to being lean when producing cherries, but there’s not any fat to be trimmed,” says Amos, who has about 300 acres of tart and 100 acres of sweet cherries, as well as plums, pears, apples, soybeans, wheat and horse hay that make up about 1,400 acres total. That diversity helps minimize the losses.
He recently took out 50 acres of tart cherries in favor of soybeans. “It really comes down to grower prices. … We either have to cut out the cheap, foreign-subsidized cherries or increase the tariffs to offset the difference,” Amos says.
Through the marketing order, the U.S. cherry industry has heavily invested in research, development and promotion of tart cherries as a superfood, only to have Turkey undercut pricing and reap the benefits of that investment, White says.
“If they can ship them in for what we can grow … there’s something wrong,” White says. “I see no future in the cherry industry. I don’t see how we can sustain it.”
A few years ago, Michigan growers and processors tried to fight back and petitioned the Department of Commerce and the International Trade Commission to investigate Turkey for dumping practices.
In fall 2019, DOC ruled that Turkey was undercutting fair market value on dried cherries by nearly 650% and implemented a preliminary tariff. But ITC overruled DOC in early 2020, saying the U.S. cherry industry had not been “materially injured” by Turkish dumping, and lifted the preliminary tariff on dried cherries.
U.S. Sens. Debbie Stabenow and Gary Peters, both from Michigan, have supported Michigan’s cherry growers and the tariff, and have vowed to continue to try to level the playing field.
Today, there are some small tariffs on cherry juice, but it falls short of what domestic growers need.
“Consumers do not know where cherry products are coming from,” says White, who would like to see better labeling. But, even so, consumers are price hunters. He says, “It’s not going to change unless they start to put value on American-produced products and the food security that it brings. We have a lot of regulations on us here, including food safety, labor and water use. Do other countries have the same regulations?”
In a can of cherry pie filling, everything in there, including the can, costs more than the cherries, White notes.
Once deemed a hundred-year event, weather-related crop failures are becoming much more prevalent. In the past 20 years, Michigan’s tart cherry growers have endured crop failures in 2002, 2012, 2020 and 2021, with the first two being the harshest.
Mild winters and early-spring warmups, followed by killing frosts, threaten not only cherries, but also all fresh fruit. It’s a major concern for Michigan growers, but even broader as the direct economic impact of fruit production in Michigan is more than $485 million annually — with total economic activity, including industries related to fruit production, at $753 million — according to a 2018 Michigan State University study.
Crop insurance, which was established for tart cherries in 2014, provides some relief but is based on recent years of production and with so many losses, the basis takes a hit.
Nikki Rothwell, a Michigan State University Extension specialist and coordinator of the Northwest Michigan Horticultural Research Center, says, “Michigan cherries have been the poster child for climate change because we’ve lost so many crops with weird weather.”
On the flip side, the hot and dry weather the past two seasons has helped keep the invasive and prolific spotted wing drosophila populations relatively low, Rothwell points out. The vinegar fly came on the scene in 2010 in Michigan, and it decimates thin-skinned fruit by depositing larvae inside and making it rotten and unmarketable.
It was the right time for White to sell, he says, as there are no family members interested in the business, “and my wife wants me to retire.”
His close proximity to the horse show, just a half-mile, makes his land highly desirable. “I’ve lived on this piece of property for 40 years, with great views of scenery. Now others can share in that,” he says.
The extent of his retirement is still under debate, as he’s keeping 10 acres. “I’m going to raise something. My wife used to work at the school, so I thought I might raise 5 acres of pumpkins and have the kids come out and pick a pumpkin as a free thing to do. It doesn’t make me money, but neither do cherries.”
Editor, Michigan Farmer
While Jennifer is not a farmer and did not grow up on a farm, "I think you'd be hard pressed to find someone with more appreciation for the people who grow our food and fiber, live the lifestyles and practice the morals that bind many farm families," she says.
Before taking over as editor of Michigan Farmer in 2003, she served three years as the manager of communications and development for the American Farmland Trust Central Great Lakes Regional Office in Michigan and as director of communications with Michigan Agri-Business Association. Previously, she was the communications manager at Michigan Farm Bureau's state headquarters. She also lists 10 years of experience at six different daily and weekly Michigan newspapers on her impressive resume.
Jennifer lives in St. Johns with her two daughters, Elizabeth, 19, and Emily 16.
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