Low Frozen Supplies Could Lead to Strong In-Season Prices

The lowest frozen storage numbers since 2010 should lead to strong in-season prices for frozen blueberries in 2019, according to a blueberry industry strategic advisor.

John Shelford speaks at the Oregon Blueberry Conference.

But, according to John Shelford, who advises for Naturipe Farms in Naples, Florida, depending on production levels, post season prices could level off.

“If we produce 650 million pounds or more, post season prices will stagnate,” Shelford said in a presentation at the 2019 Oregon Blueberry Conference, February 4 in Salem.

Market dynamics of the frozen blueberry market has largely been defined by growth over the past decade. From 2009 to 2016, for example, the frozen highbush industry sustained 12 percent annual growth, increasing from 168 million pounds in 2009 to 386 million pounds in 2016.

Then, in 2017, frozen production slipped to 258 million pounds after Georgia’s frozen production fell from just under 100 million pounds to less than 30 million because of weather. “That had a huge impact,” Shelford said.

In 2018, frozen highbush production jumped back up to 323 million, after Georgia’s crop rebounded, and the Northwest (including Oregon, Washington and British Columbia) produced 245 million pounds of frozen highbush.

Added with lowbush production during the six-year span from 2012-2017, average annual frozen production was 610 million pounds, hitting a peak of nearly 800 million pounds in 2016, according to a North American Blueberry Council report.

Annual frozen storage numbers, meanwhile, dropped from 148 million pounds in June of 2017, according to the U.S. Cold Storage Report, to 97 million pounds in May of 2018.

Shelford said frozen supplies could fall to as low as 60 million pounds by June, lower than at any point in the last eight years.

Much of the disappearance of storages in the past three years has been achieved through aggressive offshore movement by the wild industry, Shelford said.

“They have moved the product out,” he said. “But even with those offshore exports, I would suggest that we have continued to have some domestic increase in consumption.”

In general, blueberry consumption of both fresh and frozen increase has flattened out in the last two years after several years of steep increase, Shelford said.

“I think there is stabilization taking place (in consumption),” Shelford said.

He pegged the weekly consumption of fresh blueberries at about 10 million pounds a week, and noted that the U.S. Highbush Blueberry Council is hoping to increase that to 10.5 million or even 11 million pounds a week through promotions and other activities. Shelford serves on the USHBC’s Marketing and Promotion Committee.

Looking ahead, Shelford believes North American blueberry production will continue to increase, although not at the rapid rate of ascent it once did. Blueberry plantings, although still increasing, also have slowed, he said.

“I have been kind of expecting this,” he said.

Still, Shelford predicted supply growth will increase about two percent annually in the near future.

“I think that will take place for the next five years, unless pricing keeps it from doing so,” he said.

Other predictions he made at the February 4 conference include that consolidation will take place and labor costs and food-safety costs will increase.

Opportunities exist in increasing exports, particularly in fresh sales, he said, although issues with tariffs, MRLs and political turmoil present significant challenges on that front.

“Our exports of fresh are quite miniscule to our production,” he said, noting that just two percent of the North American fresh production is going to export.

Other challenges looming for the industry include improving production efficiency.

“You need to be sharp,” he said. “You need to be a low-cost producer. You need to be a high-yielding producer. If you are a high-cost per pound producer, you’ve got some challenges ahead.”

He closed by noting that producing flavorful berries is critical for the future of the industry.

“We will not grow the business if we don’t deliver taste,” he said.



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