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Market Forces Not Kind to Pacific Northwest Growers in 2014

By the time the Pacific Northwest entered the fresh blueberry market last year, the odds were heavily stacked against grower prospects for high prices, according to Rod Cook of Ag-View Consulting of Olympia, Washington.

Forces at play included a large crop from the Southeast U.S. that was still lingering in the marketplace when fresh crop from New Jersey, Michigan and the Northwest came on simultaneously.

“We had every major player in North America in the fresh business at exactly the same time,” Cook said. “By the time we got to the middle of the season, prices dropped through the floor.”

Speaking at the 2015 Oregon Blueberry Conference January 27 in Portland, Cook said last year’s fresh volume “wasn’t radically out of sync” with previous years, but because of the combination of factors, low prices lingered into late season. “It played out to where we just couldn’t seem to get pricing back up,” he said.

Cook, in fact, traced last year’s mid- to late-season price slump to last February when a shortage of Chilean fresh crop, triggered in part by a freeze, created a gap in the supply chain. Consequently, when the Southeast U.S. came on with a big crop, prices soared, he said.

“(The Southeast) has threatened to do this for a number of years,” Cook said, “but they have always had problems. They’ve had hurricanes that have washed the crop off, or they’ve had freezes that shorted it.”

The ensuing influx of fresh crop from New Jersey, Michigan and the Northwest created what Cook described as “confusion in the marketplace,” sending prices into a tailspin that lasted for several weeks.

Not until the end of the season did prices rebound, Cook said. “And, even at that, the end pricing wasn’t as good as the previous year,” he said.

Cook’s recounting of the forces at play in last year’s fresh market, was part of a wide-reaching report that included a look at, among other topics, cold storage numbers.

The numbers were at historical highs for much of last year, Cook said, but good consumption in February, March and April and October, November and December offset concerns.

“Cold storage numbers are really about trends,” he said. “If you’ve got very large numbers but there is great consumption, it’s not really that concerting. As a matter of fact, that is great, because it shows you are reaching a bigger market.”

The forecast at the first of February showed an even bigger carry-in this season, Cook said. But, again, he said he doesn’t see reason for concern.

“If anything, right now, the pricing trend has tended to be up a little bit,” he said.

Cook also touched on technological advancements in end-product packaging, advancements spurred in part by funding from the U.S. Highbush Blueberry Council, which provided seed money for federal grants.

“There has been a dramatic change over to IQF (individually quick frozen), especially in the Northwest, but throughout the blueberry industry, as well,” he said. “Five or ten years ago, there were very few IQF processing plants out there. We froze everything in the thirty-pound box; and it was a block. When you got a box of fruit delivered to a user, they had to smash those things up if they were going to put them into a polybag for grocery use.

“What we have now with IQF is a whole range of things that that fruit is now available to be used for. Not only can we now take the fruit and individualize that product and improve what goes into a polybag, we can size that and we can take soft fruit and freeze it so it is usable, as opposed to in a thirty-pound box, where soft fruit down in the bottom of the box wasn’t just squished, it was ugly and it wasn’t very usable. It was waste product.

“Now we can freeze that in advance of putting it in a box,” Cook said. “It has a lot more utilization.”

Cook also talked about the need for continual promotions in foreign and domestic markets to ensure movement of an ever-growing crop base.

“It is only through promotions and only through developing greater consumption that we are going to be able to keep on moving here,” he said.

“The (nonbearing) acreage didn’t show up (in statistics),” he said. “But, believe me, there are more acres in the ground that aren’t bearing and those are going to bring yet more production.”

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