2024-17902. Tart Cherries Grown in the States of Michigan, et al.; Free and Restricted Percentages for the 2023-24 Crop Year

	Millions of pounds
September Calculations:
(1) Average sales of the prior three years	194.2
(2) Desirable carry-out	85
(3) Optimum supply calculated by the Board (item 1 plus item 2)	279.2
(4) Carry-in as of July 1, 2023	137.2
(5) Adjusted optimum supply (item 3 minus item 4)	142
(6) Board reported production	202.7
(7) Surplus (item 6 minus item 5)	60.7
(8) Total economic adjustments	30
(9) Market growth factor	19.4
(10) Adjusted Surplus (item 7 minus items 8 and 9)	11.25
(11) Production in regulated districts	200.2
(12) In-Orchard Diversion	6.86
(13) Production minus in-orchard diversion	193.4
Final Percentages:	Percent
Restricted (item 10 divided by item 13 × 100)	6
Free (100 minus restricted percentage)	94

The final restriction of 6 percent is lower than the preliminary restriction percentage of 8 percent. The change is due to the increase in production of 27.5 million pounds more in total production above the June estimate, and the 30-million-pound economic adjustment the Board made in September. The desired carry-out remained the same at 85 million pounds.

After the September meeting, industry reported an additional 3.24 million pounds of production that was not accounted for at the September meeting. The Board met again on December 14, 2023, and reviewed the impact of this additional production on the free and restricted percentages recommended at the September meeting. The inclusion of the additional 3.24 million pounds would increase the surplus from approximately 60.7 to 63.9 million pounds. Given no further changes to the other numbers incorporated in the September calculation, this surplus change would increase the restricted percentage to 7.4 percent.

The Board discussed maintaining the final restriction at 6 percent as recommended in September. Members recognized that this would relieve the industry from the burden of having to meet an increased reserve requirement of 1.4 percent more (7.4%−6% = 1.4%). Since the industry makes business decisions based on the June estimates and the final recommendation from September, a late season increase to the reserve requirement could have a negative impact on some industry members. After discussing the possible impact of the increased production, the Board unanimously recommended increasing the economic adjustment by the 3.24 million pounds of additional production to offset its impact on available supply and to leave the percentages recommended in September in place with 94 percent free and 6 percent restricted for the 2023-24 season.

With these changes, the total production increased from 202.7 million pounds to 205.9 million pounds and the surplus rose to 63.9 million pounds. The economic adjustment shifted from 30 million pounds to 33.24 million pounds, balancing out the additional surplus. Using the new production number and the revised economic adjustment to recalculate the restricted percentage, and rounding up, results in a 6 percent restriction percentage as recommended at the September meeting, as outlined in the following table from the December meeting:

	Millions of pounds
Final Calculations:
(1) Average sales of the prior three years	194.2
(2) Desirable carry-out	85
(3) Optimum supply calculated by the Board (item 1 plus item 2)	279.2
(4) Carry-in as of July 1, 2023	137.2
(5) Adjusted optimum supply (item 3 minus item 4)	142
(6) Board reported production	205.9
(7) Surplus (item 6 minus item 5)	63.9
(8) Total economic adjustments	33.24
(9) Market growth factor	19.4
(10) Adjusted Surplus (item 7 minus items 8 and 9)	11.25
(11) Production in regulated districts	203.46
(12) In-Orchard Diversion	6.86
(13) Production minus in-orchard diversion	196.6
Final Percentages:	Percent
Restricted (item 10 divided by item 13 × 100)	6
Free (100 minus restricted percentage)	94