Blueberry farmers face price stress, expert says
SALEM — With global blueberry production climbing, farmers should focus on improving efficiencies rather than hoping for prices to rise, according to an industry expert.
“If you’re the lowest-cost producer, you will survive whatever kind of price stress we have in this industry,” said John Shelford, strategic advisor to the Naturipe Farms food company, at the Jan. 16 Oregon Blueberry Conference here.
Cold storage inventories of frozen blueberries have mounted in recent years, suppressing prices for the processed crop, he said.
In 2016, the pile of frozen blueberries leftover from the previous year’s harvest hit 145 million pounds in the U.S., up from 51 million pounds just five years earlier, according to USDA.
Frozen inventories will likely grow to 160 million pounds before this year’s blueberries enter cold storage, said Shelford. “I do not see any improvement in pricing for the 2017 harvest.”
Shelford projects that annual blueberry production in the U.S. and Canada will increase roughly one-third, from 1.2 billion pounds to 1.6 billion pounds over the next decade.
Farmers can’t depend on domestic consumption of the crop to grow proportionately and will have to ship more blueberries overseas to keep prices stable, he said.
“We can’t take our eye off the export business,” he said.
Niche markets offer an opportunity for growers but they don’t have a lot of “elasticity,” Shelford said.
For example, the market for organic blueberries — a relatively large niche — can easily be overwhelmed by excessive tonnage, causing prices to collapse, he said.
Surplus organic blueberries are actually better off being sold in the conventional market to avoid affecting organic prices, he said.
The average number of calories consumed per capita in the U.S. is effectively flat at about 2,500 calories per day, and the share represented by whole fruits actually declined in recent years across several demographics, Shelford said.
“If you eat more blueberries, you’re going to displace something else. It’s really a zero-sum game,” he said.
New blueberry plantings have slowed in North America and Chile, but farmers have still been enthusiastically committing new acreage to the crop in China, South Africa, Peru and Mexico, said Cort Brazelton, who heads business development at Fall Creek Farm & Nursery and tracks global blueberry production.
Mexico is in a strong position to supply “counterseasonal” fresh blueberries to U.S. consumers, since the country can ship its crop to the U.S. much faster than Chile, a prominent counterseasonal producer, Brazelton said.
Expansion of blueberry acreage in Peru is occurring in conjunction with overall agricultural growth in that country, which is tied to the construction of major irrigation projects, he said.
“If it grows in Peru, they’re planting it like crazy,” Brazelton said.
While North America remains an important destination for South American blueberries, producers on that continent are increasingly shipping more fruit to European and Asian markets, he said.
For North American farmers, remaining competitive will require keeping the per-unit cost of blueberries down while retaining a reputation for high quality, Brazelton said.
The stronger U.S. dollar presents a headwind for overseas sales, he said. “I wouldn’t make relying on a weak currency a tenet of successful exports.”