By SHELLY STRAUTZ-SPRINGBORN
Michigan Correspondent

LANSING, Mich. – The cooperative that markets two-thirds of the world’s cranberries is forecasting a 6,000-acre shortage within the next two years if current trends continue, according to a new economic study.

This is good news for Michigan, said Michigan Farm Bureau (MFB) horticultural and forestry specialist Ken Nye. Currently, Michigan has a few growers that produce about 250 acres of cranberries. It’s the smallest commodity crop in the nation’s second-most agriculturally diverse state. Wisconsin is the leading cranberry-producing state followed by Massachusetts.

“Michigan has a climate suitable for cranberry production and a well-established fruit handling industry to take on the extra load,” Nye said. The study, commissioned by Michigan Farm Bureau, the Michigan Cranberry Council and the Michigan Food Processors Assoc., was conducted by the Michigan State University Product Center.

According to the report, national cranberry production is “significantly lagging” behind demand. The study explores sales and production trends of Ocean Spray, the largest handler of cranberries in the United States. Ocean Spray boasts a 60 percent share of the U.S. cranberry juice market, a 70 percent share of both the fresh cranberry market and the cranberry sauce market and an 80 percent share of the dried cranberry market.

The study revealed that Ocean Spray’s sales of sweetened dried cranberries, sometimes referred to as craisins, tripled from $34 million in 2002 to $100 million in 2006. This sprouting market may offer additional potential in Michigan because the equipment used to dry the state’s cherries also can be used to dry cranberries. In addition, while demand for most juice products is flat, demand for cranberry juice and cranberry juice blends has continued to grow.
Ocean Spray’s international sales rose 18 percent in 2006, and the company intends to increase its market share and product offerings in Canada, Europe and developing countries. To keep up with potential demand, Ocean Spray needs another 6,000 acres of cranberry production.

Two scenarios

The first analyzed increasing Michigan’s cranberry production by 500 acres. Researchers concluded that the annual economic impact would be $5.93 million, with the creation of 75 jobs. The one-time economic impact to build wetland bogs would be $30.66 million, with 216 jobs created during the construction phase.

The second scenario looked at expanding the state’s cranberry production by 2,500 acres, and it assumed that juice production would expand to process the additional cranberries. The annual economic impact was estimated at $29.67 million with an additional 383 jobs created. The one-time economic impact to build wetland bogs was estimated at $153.28 million with 1,082 jobs created during the construction phase. The net impact of juice concentrate manufacturing was estimated at $14.7 million, with an additional 103 jobs created.

“These estimates should be considered minimum estimates,” said the study’s author, Bill Knudson, an MSU marketing economist. “Actual economic activity will likely be greater due to increased marketing, retailing and other activities associated with increased cranberry production.”

However, staking an additional claim on cranberry production isn’t a done deal for Michigan growers.

Cranberry production in Wisconsin continues to grow, but some sources predict the state will soon reach its maximum acreage. The Maritime Provinces of Canada – Nova Scotia, New Brunswick, Newfoundland, Prince Edward Island and Labrador – are “perhaps the greatest potential sources of competition,” according to the study, boasting “ample land and water, cooperative regulatory environment, supportive business climate, great outdoors and quality of life.”

MFB, the Michigan Cranberry Council and the Michigan Food Processors Association said the findings are valuable as they seek legislative, regulatory and research support at the state and local levels to help grow Michigan’s cranberry industry.

“Here’s a golden opportunity for the state,” said Michigan Cranberry Council President Mike DeGrandchamp, “but we need to act. We’ve got everything in line other than we’re not producing the crop on more acres.”