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688-122 National Cranberry Cooperative, 1996

2

Table A Data on U.S. Cranberry Harvest

Production/Utilization (in barrels)a Average Price

Crop Year Acreage

Harvested Barrels

per Acre Production Fresh Sales Process

(all uses, $ per barrel)b

Five-Year Average 1960-1964 26,022 23.7 615,000 466,844 148,256 22.12 1965-1969 25,434 24.9 643,300 380,965 253,335 31.00 1970-1974 26,205 31.3 822,580 381,320 436,060 34.30 1975-1979 24,842 39.8 983,660 439,170 532,070 23.42 1980-1984 21,448 51.2 1,096,160 427,520 543,860 21.54 1985-1989 20,778 62.6 1,300,120 468,340 755,750 24.00 1990-1994 20,988 73.7 1,546,120 327,980 1,169,360 38.24

Annual 1990 20,640 69.6 1,436,800 389,600 1,033,200 31.00 1991 20,760 77.0 1,598,600 328,000 1,249,600 34.32 1992 21,220 66.2 1,404,300 278,300 1,034,900 37.20 1993 21,135 69.4 1,467,800 301,900 1,111,200 41.24 1994 21,185 86.1 1,823,100 342,100 1,417,900 42.20 1995c 21,445 95.1 2,038,600 367,000 1,418,600 36.10

Source: Annual reports of Crop Reporting Board, Statistical Service, USDA.

Note: Data gathered on five states—Massachusetts, New Jersey, Oregon, Washington, and Wisconsin.

a Differences between production and utilization (fresh sales and process) represent economic abandonment.

b Beginning in 1964 the series represents equivalent returns at first receiving station, fresh and processing combined. Years prior to 1964 represent season average prices received by growers for all methods of sale, fresh and processing combined.

c Preliminary figures for 1995.

Some significant trends are observable in Table A. Probably the most important trend was the increasing surplus of cranberries produced over those utilized. This surplus was serious enough by 1993 for the growers to resort to the Agriculture Marketing Agreement Act of 1937. Under this act, growers can regulate and control the size of an agricultural crop if the federal government and more than two-thirds of the growers agree to a plan for crop restriction. In 1993, 87% of the growers agreed (making it binding on the others also) that no new acreage was to be developed over the next six years and that each grower would have a maximum allotment at the end of six years equal to the average of the grower’s best two years from 1993 through 1998.

In 1995 the growers resorted to the Agriculture Marketing Agreement Act once again. Under the Cranberry Marketing Order of 1995, the growers and the government agreed that 10% of the 1995 crop should be set aside. The set aside berries (berries that are either destroyed or used in a way that will not influence the market price) amounted to more than 200,000 barrels (bbls). (A barrel of cranberries weighs 100 lbs.) Handlers physically set aside 10% of the berries before harvesting, under the supervision of a committee of growers and representatives from the Department of Agriculture.

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Nation

A harve tradit were collec up to shorte storag receiv

Rece

R Septe (prep opera took t opera

Figur

nal Cranberry Co

Another impo esting, in part tional dry har

flooded, the cted easily sin o 20% greate ened the time ge. Water ha ved 25,000 bbl

eiving Pla

RP1 received b mber and wa aring cranber

ation (that pre the fruit from

ation.

re A Daily D

ooperative, 1996

ortant trend w ticular, was d rvesting, berr berries were

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rocess” fruit d early Decemb esh fruit) was e, canning, fre aging. This c

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during a seas ber (see Figur s completely eezing, and ot case is concer

ries to RP1

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me areas. Rec 1994, and 350,

son that usua re A). The fre separate from ther process f ned only wit

6

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688-122

3

Water er the

e bogs were yields and it g-term No. 1 1995.

arly in ration s fruit s) and s fruit

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688-122 National Cranberry Cooperative, 1996

4

The handling of process fruit at RP1 was highly mechanized. The process could be classified into several operations: receiving and testing, dumping, temporary holding, destoning,2 dechaffing,3 drying, separation, and bulking and bagging. The objective of the total process was to gather bulk berries and prepare them for storage and processing into frozen fresh berries, sauce, and juice.

Process Fruit Receiving

Bulk trucks carrying process berries arrived at RP1 randomly throughout the day as shown in Exhibit 1. The average truck delivery was 75 bbls. When the trucks arrived at RP1 they were weighed, and the gross weight and the tare (empty) weight were recorded. Prior to unloading, a sample of about 30 lbs. of fruit (0.3 bbl.) was taken from the truck. Later, this sample would be run through a small version of the cleaning and drying process used in the plant. By comparing the before and after weight of this sample, it was possible to estimate the percentage of the truck’s net weight made up of clean, dry berries. At the same time, another sample was taken to determine the percentage of unusable berries (poor, smaller, and frosted berries) in the truck. The grower was credited for the estimated weight of the clean, dry, usable berries. (See Exhibit 2 for total 1995 deliveries of process berries.)

At the time the truck was weighed, the truckload of berries was graded according to color. Using color pictures as a guide, the chief berry receiver classified the berries as Nos. 1, 2A, 2B, or 3, from poorest color (No. 1) to best (No. 3). There was a premium of $1.50 per bbl. paid for No. 3 berries, since color was considered to be a very important attribute of both juice products and whole sauce. Whenever there was any question about whether or not a truckload was No. 2B or No. 3 berries, the chief berry receiver usually chose No. 3. In 1995 the $1.50 premium was paid on about 450,000 bbls. of berries. When these berries were used, however, it was found that only about half of them were No. 3’s.

To improve this yield, Schaeffer was considering the installation of a light meter system for color grading. This system was projected to cost $40,000 and would require a full-time skilled operator at the same pay grade as the chief berry receiver.

Temporary Holding

After a truckload of process berries had been weighed, sampled, and color graded, the truck moved to one of the five Kiwanee dumpers. The truck was backed onto the dumper platform which then tilted until the contents of the truck dumped onto one of five rapidly moving belt conveyors. Each of the five conveyors took the berries to the second level of the plant and deposited them on other conveyors capable of running the berries into any one of 27 temporary holding bins. Bins numbered 1-24 held 250 bbls. of berries each. Bins 25, 26, and 27 held 400 bbls. each. All of the conveyors were controlled from a central control panel.

It usually took from 7 to 8 minutes to back a truck onto a Kiwanee dumper, empty its contents, and leave the platform. At times some trucks had to wait several hours, however, before they could

2Destoning was the separation of foreign materials, such as small stones, that might be mixed in with the berries.

3Dechaffing was the removal of stems, leaves, and so forth that might still be attached to the berries.

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National Cranberry Cooperative, 1996 688-122

5

empty their contents. These waits occurred when the holding bins became full and there was no place in the receiving plant to temporarily store berries before further operations.

The holding bins emptied onto conveyors on the first level of the plant. Once the bins were opened, the berries flowed onto the conveyors and started their way through the destoning (dry berries only), dechaffing, drying (water-harvested berries only), quality grading, and either bulk loading or bagging operations.

Destoning, Dechaffing, and Drying

Holding bins 25-27 were for wet (water-harvested) berries only. Holding bins 17-24 could be used for either wet or dry berries. Wet berries from these bins were taken directly to one of the three dechaffing units (destoning was unnecessary with water-harvested berries) which could process up to 1,500 bbls. per hour each. After dechaffing, these wet berries were taken to one of the three drying units where they were dried at rates up to 200 bbls. per hour per dryer.

Holding bins 1-16 were for dry berries only. Berries from these bins were routed through one of three destoning units, each of which could process up to 1,500 bbls. of berries per hour, before going through a dechaffing unit. Frequently, both wet and dry berries were processed at the same time though the system. The wet berries would be processed through the part of the system that included the dryers, while the dry berries were processed through the area containing the destoning units. National Cranberry’s current plant layout had two dechaffing units dedicated to wet berries, and one to dry berries.

Superintendent Walliston had told O’Brien that, with an increasing percentage of wet berries coming to the plant, it might make sense to convert some of holding bins 1-16 so they could be used for wet berries also. This would cost $10,000 per bin. Or, perhaps, he had mentioned, a few new dryers might be needed. These would cost $60,000 each. He wondered what the benefits might be of adding more dryers and whether those benefits would warrant the cost.

Quality Grading

After destoning, dechaffing, and drying, berries were transported to large take-away conveyors that moved berries from the first level of the receiving building to the third level of the adjoining separator building. Here these take away conveyors became “feed conveyors” as they were now feeding berries into the jumbo separators (see Figure B). The jumbo separators identified three classes of berries—first quality berries, potential second-quality berries, and unacceptable berries.

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688-122

6

Figure B

The s bounce hi

RP1 Separa

separation pro igher than po

ator Building

ocess was a s or cranberrie

simple one th s (see Figure

hat was based C for a drawi

Nati

d on the fact ing of the sep

ional Cranberry

t that good cr paration proce

Cooperative, 19

ranberries wi ess).

96

ill

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Nation

Fi

T and w water secon separ Bailey secon

E declin was p

Bulk

C onto a the sh

nal Cranberry Co

igure C Sep

he first-qualit were transpor r-filled waste nd-quality ber

ated the strea y mills operat

nd-quality ber

ach of the thr ned as the per probably close

king and B

Conveyors car any one of the hipping area

ooperative, 1996

parator Opera

ty berries we rted to the sh flumes on th rries fell into am of incomi ted on the sam rries had cons

ree separator rcentage of ba e to 400 bbls.

Bagging

rried berries f e three main f could be mo

ation

nt directly on hipping area. he first level the Bailey m

ing berries in me principle a sistently been

lines could p ad fruit increa per hour for e

from the sepa flexible conve oved to feed

nto one of thr The unaccep and were flo ills on the sec

nto second-qu as the jumbo close to 12%.

process up to 4 ased. It was each line.

arator buildin eyors in the sh berries into b

ree take-away ptable berries

oated off to th cond level of

uality berries separators. O .

450 bbls. per estimated tha

ng into the shi hipping area. bagging stati

y conveyors o s fell through he disposal a f the building and unaccep Over the year

hour, but the at the average

ipping buildi . Each of the ions, bulk bin

6

on the second h waste chute rea. The pot

g. The Bailey ptable berries s the percenta

e rate of proce e effective cap

ng, feeding b three convey n stations, or

688-122

7

d level es into tential

y mills . The age of

essing pacity

berries yors in r bulk

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688-122 National Cranberry Cooperative, 1996

8

truck stations. The berries left RP1 in bulk trucks for shipment directly to the finish processing plant or in bins for storage at freezers with bulk storage capability.

Scheduling the Work Force

During the harvest season—September 1 to December 15—the process fruit side of RP1 was operated seven days a week with either a 27-member work force or a 53-member work force, depending on the relative volume of berry receipts. Will Walliston explained to Mel O’Brien,

Last year, trucks arrived at 7:00, and we only staffed the dumpers and the bins, and then started the rest of the operation at 11:00. This year, with an increase in the percentage of wet berries that we expect, we’re going to have to fire up the operation, on peak days, with two shifts – one from 7:00 to 3:00, and one from 3:00 to 11:00. I’m hoping that’ll cut into last year’s huge overtime expenditures and will limit the extra capital that we’ll need to spend. But, that’s what your report will help me decide.

There were 27 employees at RP1 who were employed for the entire year; all others were hired for the season only. The 27 non-seasonal employees were all members of the Teamsters Union, as were 15 seasonal workers. Seasonal workers could work only between the dates of August 15 and December 25 by agreement with the union. Most seasonal workers were employed via a state employment agency that set up operations each fall. The employment agency helped in placing seasonal workers in the receiving plant and in harvesting jobs with the local growers. The pay rate for seasonal workers in the process fruit section was $8.00 per hour. They were paid the overtime rate of 1-1/2 times their straight-time rate for anything over 40 hours per week. The straight-time pay rate for the full-year employees averaged $13.00 per hour.

When it was necessary to work beyond 11 p.m., a crew of only eight or nine workers was required to run the holding bins empty and do bulk loading. Although dry fruit could be held in the bins overnight, it was considered undesirable to hold wet fruit any longer than necessary, so wet fruit was always run out before shutting down. The plant never ran more than 22 hours a day, since at least 2 hours were required for cleaning and maintenance work. (Downtime due to unscheduled maintenance was very small; said Walliston: “We ran 350,000 bbls. through the wet system in 1995 and we were down a total of less than 8 hours.”)

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Nation

Exhib

nal Cranberry Co

bit 1 Log of

ooperative, 1996

Total Deliver

ries on Septemmber 23, 19955

6688-122

9

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688-122 National Cranberry Cooperative, 1996

10

Exhibit 2 Deliveries of Process Berries 1995

Day

Total Deliveries (scale weight

in bbls.) Delivered

Wet Color No. 1 Color No. 2 Color No. 3 9/1–9/19 44,176 54% 6% 72% 22% 9/20 16,014 31 0 44 56 9/21 17,024 39 0 35 65 9/22 16,550 39 0 22 78 9/23 18,340 42 2 22 76 9/24 18,879 41 0 21 79 9/25 18,257 36 0 14 86 9/26 17,905 45 0 10 90 9/27 16,281 42 0 18 82 9/28 13,343 38 0 15 85 9/29 18,717 43 1 11 88 9/30 18,063 59 1 9 90 10/1 18,018 69 1 11 88 10/2 15,195 60 2 18 80 10/3 15,816 60 3 12 85 10/4 16,536 57 5 21 74 10/5 17,304 55 2 26 72 10/6 14,793 46 7 32 61 10/7 13,862 61 3 39 58 10/8 11,786 56 0 36 64 10/9 14,913 54 0 33 67 10/10–12/10 238,413 75 0 22 78

Total barrels 610,185 58 1 25 74

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