Dec. 31, 2016
Executive Summary
·
Drivers for this season were timing of marketing, variety and crop size.
1) Due to supply peaks, prices during the season were volatile, sometimes changing from
day to day.
2) Flash bloom reduced yields for early blooming varieties such as Bings.
3) Expectations for a smaller crop size did not materialize, and the third-largest crop was
harvested.
·
Profitability was positive for most of the industry. Yields and prices differed depending on
variety and harvest timing.
·
The outlook for the cherry market is favorable due to strong domestic and global demand as
well as trends toward healthier lifestyles.
Market Timing
Timing of marketing drove profitability this season. Typically, California’s cherry crop is harvested
and sold as the Northwest cherry crop is just beginning. This season, California’s crop quality was
lower, which made retailers hesitant to pay premium prices for Northwest cherries. However,
returns in the early season were propped up by strong export markets.
Fluctuations in cherry prices are driven by supply; they usually follow a pattern of high earlyseason, depressed mid-season and higher season-ending prices. Although prices generally
followed the typical pattern this season, small supply peaks drove prices lower for several days at
a time. Growers who harvested during supply peaks received lower returns, while those who
missed the supply surges received favorable returns.
Marketing desks usually set up early, negotiated retail promotions when crops are large. However,
this season’s expectations for a small crop likely meant most marketers held off for better prices.
The unpredictable price spikes made marketing difficult. Despite volatility, retail prices this season
were similar to last year’s according to the USDA. Stable prices during this large-crop year resulted
in overall good profitability for the industry.
Disclaimer: This material is for informational purposes only and cannot be relied on to replace your own judgment or that of the professionals you work with in assessing the accuracy
or relevance of the information to your own operations. Nothing in this material shall constitute a commitment by Northwest FCS to lend money or extend credit. This information is
provided independent of any lending, other financing or insurance transaction. This material is a compilation of outside sources and the various authors’ opinions. Assumptions have
been made for modeling purposes. Northwest FCS does not represent that any such assumptions will reflect future events.
© 2016 Northwest Farm Credit Services
Varietal Returns
Early-blooming varieties, such as Bings, faced several challenges this season. Flash bloom (a
large, quick bloom that results in low pollination) affected growers across the Northwest,
particularly in the Yakima Valley. However, yields were not as low as originally expected and this
season’s total cherry crop is the third largest on record.
The majority of Bings went to market
during the peak season when prices
were depressed, so many Bing growers
struggled with lower returns. This table
displays all cherry retail prices according
to USDA Market News Report.
Bings grown in the Tri-Cities and
Mattawa areas usually have earlier
maturing crops and were able to capture
higher prices. Additionally, later-blooming varieties generally avoided flash bloom, resulting in
better yields and returns.
Outlook
Although this year was challenged with volatile prices, the cherry industry managed to successfully
market the third-largest crop on record. Considering the size of crop, overall prices were strong and
the cherry industry fared well. Domestic and global demand remains favorable. Current trends
toward healthier lifestyles mean solid demand for cherries.
A long fall and easy transition into winter gave cherry trees time to go dormant. Most
meteorologists are predicting a cold and wet winter. Cold winter temperatures can cause damage
to cherry trees. However, even in single-digit and slightly negative temperatures, damage is not
likely severe enough to alter 2017 crop potential.
Additional Information
Northwest FCS Business Management Center
www.northwestfcs.com/Resources/IndustryInsights
Washington State Tree Fruit Association
www.wstfa.org
Learn More
For more information or to share your thoughts and opinions, contact the Business Management
Center by phone at 866-552-9193 or by email at [email protected].
To receive email notification for this and other market information in the form of an eNewsletter,
visit www.northwestfcs.com/Resources or contact the Business Management Center.
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