Turning cranberries into wine keeps the farm afloat

Tuesday, January 6, 2015

For this second-generation Muskoka farm, the key to survival is diversification – from growing, processing and packing their own fruit, to winemaking and agritourism

by MIKE BEAUDIN

Murray Johnston and his wife Wendy Hogarth started making wine from their Muskoka-grown cranberries as an experiment in agricultural diversification 14 years ago. Today, it's keeping their second-generation family farm afloat.

While independent cranberry growers across North America are struggling to weather a supply shock wave that has sent the price of cranberries plummeting to historic lows, the farming couple has discovered that tourism and winemaking offer a homegrown market for their crop.

They keep an eye on world prices, but they're more focused on operating a thriving agri-tourism business and selling their wine on LCBO shelves across Ontario.

Johnston's Cranberry Marsh and Muskoka Lakes Winery are about five kilometres from downtown Bala in the heart of cottage country. Johnston's father, Orville, and his wife, June, started the farm in 1950.

The Johnston farm is one of three cranberry producers in Ontario. Iroquois Cranberry Growers is situated just down the road from the Johnston farm, while the other is near Ottawa. The bulk of Canada's cranberry crop is grown in B.C., Quebec and Atlantic Canada.

Cranberry growers enjoyed fairly stable prices until the bottom fell out of the market in the late 1990s due to oversupply. Although prices have stabilized somewhat since then, they have never fully rebounded and in 2014 independent growers have faced another bleak season with historically low prices. Independent growers have received $22-$28 per 100 pounds. Some analysts predict those prices could fall to $15-$18 per 100 pounds if market conditions don't improve. Average production costs for most growers are about $25 per 100 pounds.

The Johnston farm has invested in tourism and winemaking in an effort to shield themselves from depressed prices. They started the winery in 2000 and sold out their first release in just 14 days.

"We wouldn't still be farming without diversification, without wine and without tourism," says Hogarth. "We're always looking for ways to add value to what we do. When dealing with the economic principles that apply to farming, you need to be able to diversify. If you don't have huge economies of scale and produce a lot of fruit really cheaply, you have to add value in other ways.

"The winery was a way to do that. That's why we're an integrated property here. Most growers don't have a packing house, don't deal with customers directly and don't deal with the end product directly."

Murray and Wendy are farmers first and foremost. Although Wendy is a certified sommelier, she recently graduated from the University of Guelph with an MBA in agribusiness.

The Johnston farm has 300 acres, including 27 cultivated acres in three growing bogs surrounded by ditches, dikes and other structures used to regulate water flow into or away from the beds. The bogs are flooded and frozen in winter to protect the cranberries from winterkill.

But that means clearing the three bogs of snow which insulates the ice cover from the cold and can lead to a premature melt. That's no easy task when lake-effect snow off Georgian Bay routinely dumps more than 200 centimetres in an average winter.

Farming cranberries, a perennial fruit native to North America, requires precise management to ensure the viability of the crop and to keep costs down. Gone are the days of calendar management. The farm uses integrated pest management techniques and in 2013 didn't have to spray any pesticides.

Cranberries thrive in a very specific type of peat soil with a pH of less than five that does not support many other varieties of plant life. The crop is also dependent on multiple bee visits for pollination. So far, the natural pollinators around the Johnston farm have done the job for them and have escaped the problems that have wiped out bee colonies elsewhere.

"I like to think that this shows we're doing something right," says Hogarth. "We don't use neonicotinoids and we try to be low-impact in our growing practices."

Although the process for making cranberry wine is the same as making grape wine, the production costs are higher for cranberries because the berries require more crop management to control weeds, pests and frost. In addition, cranberries are much firmer than grapes and are harder to process.

As independent growers, the Johnston farm is a fully integrated operation. They grow, process and pack all their own fruit. The harvest is split equally between berries sold locally at their store, the winery and wholesalers.

On average, the winery produces 5,000 cases a year with half sold through the LCBO and half through their own store at prices Hogarth doesn't want published for competitive reasons. It takes three pounds of berries to make one litre of wine.

Hogarth is confident their unique products, like white cranberry wine, give them a competitive edge. She says there is only one other cranberry grower in the country, in British Columbia, making cranberry wine.

The costs of starting and operating a cranberry winery deter new startups because of the expense of establishing a growing bog. Costs include clearing vegetation, building dikes, installing irrigation pipes, as well as buying specific wine-making equipment like presses and stainless steel tanks. It takes about five years for a cranberry bog to break even.

In addition, the Muskoka farm runs a year-round tourism operation complete with wine tasting, a year-round store, seasonal outdoor adventures like snow shoe rentals and a wine and cheese patio in the summer – all woven into the daily routine of the farm.

"We are a working farm," says Hogarth. "It's more authentic and more exciting to visit but more challenging to manage." BF