Cranberry Prices – Major Changes at the End of the Century

The graphs of acreage, yield and production depict the side of the story that led to the market crisis in the late 1990s. (For more discussion, read: Seeing Red: Cranberry Cooperatives and Falling Prices PDF) The cranberry industry went through a boom in the eighties and early nineties when consumer demand for cranberry products surged past available supply, driving up the price of cranberries. Growers responded to high prices by increasing acreage and renovating bogs by planting higher yielding varieties in order to increase production and profits.  

Growers were making long-term investment decisions based on short-term prices.   Cranberries are a perennial crop that requires three to five years between bog preparations and the first harvest.   Cranberry vines do not reach full production until several years after planting, but once established, they have a very long bearing life, with some active bogs in the U.S. over 100 years old.¹ The industry-wide expansion was coupled with the unfortunate stalling of demand growth. Consumer excitement over the cranberry's health benefits lessened and there was increasing competition from other juice blends. The short-term industry shortage in the early nineties had become a mountainous surplus by the end of the decade. The mid to late nineties saw the accumulated effects of lagged supply response of growers coupled with a stagnant demand causing cranberry prices to plummet (Figure C.5).

Massachusetts is not alone in suffering from depressed prices (Figure C.6). The average annual cranberry prices received in Wisconsin are virtually the same. But, Wisconsin bogs and production technologies allow producers to grow at lower costs per acre. For Massachusetts's growers, prices dropped so low at the end of the century, that many growers could not cover their production costs. Prices have continued to rise modestly during the early part of this century, but many higher cost producers have found it difficult to cover their production costs.

 

 ¹Jesse, Ed. "Status of the Wisconsin Cranberry Industry." Department of Agricultural and Applied Economics, University of Wisconsin Madison.