MARKET EXPERT EXPLAINS THE PRICE INCREASE THAT DIDN'T HAPPEN 

Rod Cook of Ag-View Consulting at the Oregon Blueberry Conference said the blueberry industry is in a fantastic position, but challenges are on the horizon.

With the health benefits of blueberries universally recognized, the blueberry industry is “in a fantastic position,” according to Rod Cook, president of Ag-View Consulting in Olympia, Washington. Look a little deeper, though, and several challenges can be seen cropping up.

In a presentation at the 2018 Oregon Blueberry Conference, Cook said increased competition from Chile, Mexico and Peru is having a negative effect on price. Last year, the increased competition for domestic and foreign markets, among other factors, offset reduced supply from all major U.S. blueberry production areas and the price increase most expected never materialized.

“We were down dramatically, not just from the previous year, but from the previous four years,” Cook said of U.S. production. “So, we would think we were looking at decent prices. But we weren’t.”

In addition to increased competition from Chile, Mexico and Peru, Canada, which typically doesn’t ship substantial quantity to the U.S., did so last year, and a fear of low prices in the processed market drove U.S. producers to push a higher percentage of fruit into the fresh market than is typical, he said. As evidence, Cook noted that despite the U.S. production being down 100 million pounds, fresh shipments during prime shipping points was up 20 million pounds.

“That is because so much of our fruit entered the fresh market that traditionally goes to the processed market,” Cook said. “Why? It had a lot to do with the anticipation of what we expected in the processed market (because of a high carryover crop the previous year).

“The anticipation of the poor pricing, I think helped drive many of us to try to ship more of our crop into the fresh market than would have otherwise gone,” Cook said.

The cold storage numbers, which in 2016 were 50 to 60 million pounds above previous cold storage reports, eventually evened out, he said, but not until June when the loss of the Southeast U.S. processed crop began to enter into the picture.

Despite the fact that processed supplies today are about where they should be, prices still have not reached points where producers believe they should be, Cook said. “It is better now than it was a year ago, but it is not above a dollar, where we think it should be,” he said.

One reason behind this, he said, is that Chile shipped a higher percentage of its production into the processed market this year than in previous years.

“Some of it is coming to the U.S., some of it to Europe and other markets,” Cook said. “So, the Northwest, which has relied on a lot of these export markets is facing increasing competition.

“Unlike fresh, frozen blueberries, wherever they are grown around the world, become an immediate competitor to what you are growing,” he told conference participants. “So, there isn’t this easy out that there used to be in the marketplace.”

Overall, despite these challenges, Cook said he believes the industry is in good shape. “I do believe that we continue to be in a fantastic position,” he said. “We continue to find virtually no bad news of the health benefits of blueberries, and the next couple of generations have found blueberries to be a fantastic crop.”

Still, as global production continues to increase, aggressive marketing will be needed to outcompete other fruit for market share, Cook said.