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Eww! Yes, kill it! That or something like it totally took over the juniper in our front garden and we had to remove the tree. It got pretty gross. Interesting, sure, but gross -- and the robins had enjoyed that tree, too. :-(
Yes, cedar-apple rust...the first time I saw one of those it was floating in our creek...I thought it waas some freshwater anemone/urchin...then when I fished it out and examined it, I thought maybe it was a bizarre seed from some native plant I hadn't heard of. So I planted it. Needless to say, it didn't grow. Don't plant any apple trees nearby! Incidentally, I've read these growths or whatever are more common during times of wet weather.