Prune prices are going down the pan

There is something about gigantic stuffed turkeys, Christmas puddings and endless mince pies that makes the humble prune seem suddenly very attractive.

But while the fruit's famous properties may bring relief to bloated Christmas diners, as a global commodity prunes are causing a nasty headache. The world market is currently swamped by an unprecedented glut, and producers are in despair at the falling prices.

At the centre of the problem are growers in California, whose crops represent the bulk of US production. The US Department of Agriculture (DOA) is now offering farmers $8.50 for every plum tree they cut down, in an attempt to remove 20,000 acres of trees from production by the middle of 2002.

The prune glut has been ripening for some time, and the DOA's latest measure follows an only partially successful drive last year.

The industry had realised that its market among the over-60s was diminishing, and decided to target younger shoppers. As part of a campaign aimed at women aged between 35 and 50, the prune growers won permission from the Food and Drug Administration to change the name of their product to "dried plums".

Prune consumption rose 5 per cent as a result, but that was not enough to prevent prices from diving to around $700 per ton. Farmers rely on prices of about $800 per ton to break even.

The origins of the current glut lie in the early 1990s, when prune prices were soaring to record highs. A 1993 peak of $1,100 per ton encouraged massive growing programmes, which, because of the growth rate of plum trees, are now starting to bear fruit.

The ultimate victims of all this may be schoolchildren. Governments on both sides of the Atlantic have a long tradition of buying up surplus commodities and channelling them into canteen lunches within the state school system.