A Less-Bountiful Cranberry Harvest, but Still Worth Giving Thanks for

Cranberry Harvest Less Bountiful than Expected
Cranberry Harvest Less Bountiful than Expected

In August, the Department of Agriculture predicted that U.S. cranberry production would rise 6% to 7.35 million barrels this year, the second-largest harvest on record. It didn't work out that way.

"The 2010 crop actually came in well below what it was originally forecast, to due to inclement weather in our growing regions," says Mike Stamatakos, vice president of agricultural supply and development at Ocean Spray, in an email. "This helped level out the cranberry supply, per the larger crops we harvested in the past couple of years. This year's harvest is nearly 10% below expectations and 5% below last year. In fact, it is the second-smallest crop in the last five years."

Ocean Spray, the largest U.S. cranberry cooperative, splits its profits among its 700 members, which gives them a cushion against price fluctuations. For years, the organization has worked to market the tart fruit beyond its traditional use in Thanksgiving dinner side dishes, and those efforts have paid off. Sales at the Lakeville, Mass.-based cooperative have grown 41% since 2005, while profits have risen 94% During that same period, Ocean Spray has increased the return-per-barrel paid to its grower-owners by 65%.

However, despite the move to give cranberries year-round appeal, Thanksgiving remains a big deal in the cranberry business. Americans consume some 400 million pounds of cranberries each year, and 20% of that happens during Thanksgiving week

Ocean Spray's Brand Strength

Cranberry harvests have been fairly bountiful for the past few years, which has kept prices fairly low, and even though this year's crop is disappointing compared to expectations, it was still strong, and should not affect the prices consumer pay for cranberry products. Those strong supplies are depressing the prices that independent growers operating outside of the Ocean Spray co-op can receive, a trend experts expect to continue through next year. The cooperative's growers are seeing wholesale prices of as much as $64 a barrel. Independents are realizing considerably less, about $10 to $20 a barrel, according to Chuck Dillon, CEO of Decas Cranberry Products of Carver, Mass.

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The price discrepancy reflects the strength of Ocean Spray's brand, which includes juices and sweetened dry cranberries, as well as the plentiful supplies in the market, Dillon says. He adds that the effects of supply and demand will catch up to Ocean Spray as well if the oversupply continues.

Cranberries may wind up being a bargain compared to other parts of the Thanksgiving meal. Retail prices for a 12-ounce container of fresh berries were unchanged from last year, according to an informal survey by the American Farm Bureau Federation. By contrast, wholesale prices for frozen turkey recently hit their highest level ever, though the AFB says that retail prices are down, indicating steep discounts by supermarkets. Prices for corn, pumpkin pie ingredients and milk were all up as well. All told, the average cost of this year's feast for 10 is $43.47, an increase of about 1.3% from last year's average of $42.91.

"Overall, the change in the price of this year's Thanksgiving dinner is basically in line with the modest changes that we've seen in the overall price level this year," says AFBF economist John Anderson in a press release. At $4.35 per person, our traditional Thanksgiving feast is still a better deal than most fast-food value meals, plus it's a wholesome, home-cooked meal."