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Tart Cherry Industry
The red tart cherry, Prunus cerasus, is a perennial tree fruit related to the plum, peach, apricot, almond, and numerous other species of the north temperate zone. It is grown commercially for its tart and juicy fruit, which is primarily used in baking and cooking. Fully ripened tart cherries may be eaten raw, but are too acid for many palates. The raw fruit stores poorly and its shelf life is too short for the fresh-market trade.
Most tart cherries are grown in four states bordering the Great Lakes--Michigan, New York, Pennsylvania, and Wisconsin. These states produce 85-95 percent of the U.S. crop in most years. Michigan is the dominant producer, accounting for 70-80 percent of U.S. output. Except in Pennsylvania, tart cherries in these states are located in areas adjacent to one of the Great Lakes. The lakes moderate the spring-time climate, reducing the chances of killing frosts when the trees are in bloom.
In Pennsylvania, tart cherries are grown on the eastern slopes of the Blue Ridge Mountains, where good air drainage helps protect blossoms against frost damage during the critical bloom period. Utah, Oregon, and Washington growers also produce tart cherries commercially.
The year-to-year variation in tart cherry output is significant, with U.S. production ranging from 190 million pounds to 396 million pounds between 1985 and 1995. Since Michigan dominates the domestic industry, U.S. output rises and falls with variations in Michigan’s output.
A short crop in Michigan means a short U.S. crop and high prices for all U.S. areas, while a large Michigan crop leads to low prices in all areas. Killing spring freezes in Michigan (or the lack thereof) are the primary cause of variations in annual crop size.
Another factor contributing to variations in production, however, is a tendency for the trees to bear a large crop following years of low yields. As with many fruit and nut trees, cherries build up energy reserves during short-crop years, and tend to produce a bumper yield during the following year.
The demand for tart cherries is highly inelastic. This means that grower prices rise sharply during years with a small crop, and fall sharply when there is a large crop. For example, farmers received more than 46 cents a pound in 1991, when only 190 million pounds of tart cherries were produced. This is more than seven times the 6 cents a pound received in 1987 and 1995, when output totaled 359 and 396 million pounds, respectively.
Climate, particularly the temperature range in an area, is the most important factor affecting the geographic distribution of tart cherry production. Generally, tart cherry trees do not thrive in the southern and central states where summers are long and hot.
Extremely low winter temperatures also may damage tart cherry fruit buds. Further, late spring frosts are incompatible with producing tart cherries, as the blossoms and young fruit are very susceptible to injury. Temperatures below 28o F can kill a high percentage of unprotected blossoms and fledgling fruit.
Locating the orchard in areas with good air drainage helps reduce the chances of crop failure due to frost. This is because cold air settles to lower levels, and orchards occupying sites higher than the surrounding areas are less likely to be injured by frost than those at the lowest elevations. An additional advantage of locating orchards on higher elevations is that the soil on such sites is more likely to be well drained.
Large bodies of water also can reduce the chances of crop failure due to frost. Orchard sites adjacent to large bodies of water are less likely to suffer frost damage to the blossoms and fruit buds than orchards on sites without water nearby. Large bodies of water provide a cooling effect during warm spring days, which slows bud development and delays the bloom period. In addition, large bodies of water provide a local warming effect during cold spring nights, reducing the likelihood of freezing temperatures.
The greatest potential demand for tart cherry insurance likely exists in Michigan. Michigan has the largest acreage planted to tart cherries of any state in the U.S., and has a relatively high probability of yield loss due to late spring-time frosts, especially in the central and southern areas of the state.
Growers in other states would also likely have an interest in tart cherry insurance. This is particularly true of growers in areas subject to crop loss due to late spring-time frosts.
Because of the marked inverse relationship between Michigan’s production and producer prices in all states, farmers with low yields may or may not experience lower revenues. In a similar vein, tart cherry returns may be quite low during some years when yields are relatively high because of low market prices.