Blueberry Frozen Supplies Low: Market Outlook Strong Going Forward

Despite challenges with inflation, rising input costs and getting product to market, the blueberry industry is well poised for the future, according to a blueberry industry strategic advisor.

John Shelford of Naturipe Value Added Foods in Naples, Florida, at the Oregon Blueberry Conference in Salem, said blueberry growers are well positioned for the future, despite potential issues with inflation and transportation.

“We’ve seen the best frozen blueberry harves-ttime contracted prices in ten years,” John Shelford of Naturipe Value Added Foods in Naples, Florida, said regarding last year’s prices. “And I think we are entering a time of stability potential in pricing.

“Of course, the challenge we are all facing is inflation and increasing supply costs. The prices we are paying to move product from west to east or east to west are at (unprecedented) levels,” he said in a presentation at the Oregon Blueberry Conference, February 14 in Salem. “And, in many cases, we are having to wait often many weeks to get trucks underneath product.”

Overall, the U.S. and Canada frozen pack has grown from 366 million pounds in 2007 to 659 million pounds last year, with a high of 786 million pounds in 2016, a figure largely driven by the 400 million-pound lowbush blueberry production that year, and a figure that declined dramatically in 2017, falling to 529 million pounds.

Last year’s frozen production was 659 million pounds, with 259 million of that lowbush, a figure he expects to be typical going forward.

“(The lowbush industry) will tell you today that they don’t think their long-term production will be much different than 250 to 260 million pounds,” Shelford said. He attributed this nearly 150 million-pound decline from the peak in wild lowbush production to today’s norm to “economic reality.”

“The smaller growers couldn’t afford the field prices they were paying as pricing dropped,” he said. “There probably was some of that in the highbush, but I don’t believe that was nearly as true.”

The five-year average for frozen highbush blueberry production, which makes up about 40 percent of total highbush production, is 358 million, according to Shelford’s figures, a volume surprising primarily because of its lack of growth.

“The thing that amazed me about highbush production is if you look at the acreage that has gone in the ground between 2010 and today, I’m surprised that growth was not much greater,” he said.

Going back to the mid-twenty-teens, for example, between 2014 and 2016, when many of today’s highbush frozen production acreage was still in its infancy or not yet in production, the industry produced 343, 350 and 386 million pounds of highbush frozen, respectively.

Frozen storage, meanwhile, which topped out at 332 million pounds in 2016, had a high of 319 million for the 2020 crop year, and a low that year of 102 million. The low mark for the 2021 crops is at 70 million pounds, Shelford said, the lowest in many years and at risk of falling short of meeting demand.

“We are moving about 50 million pounds a month of consumption,” Shelford added. “At 70 million pounds, that is about a month-and-a-half supply that would be in cold storage.”

While those numbers are slightly skewed given that some cold storage is private and not reported, Shelford said the current storage levels are showing a significant shortfall, and one that could help drive up harvesttime prices this season.
“I think it bodes well for this coming year,” he said.

Shelford said he expects offshore imports to hit record highs this year, exceeding 70 million pounds, with 60 to 70 percent of that organic and most coming from Chile and Peru, with Mexico imports increasing significantly as well. Most of the blueberry production, about 80 percent, is coming from the West, Shelford added.

“You can see the industry clearly moving to the West and to the Northwest for production,” he said. “And that is driven by economics. Production per acre is so much superior here than what it is in so many of the Eastern areas.”

Outside of high transportation and input costs and difficulties getting product to market, rising costs for blueberries driven by inflation appears to be about the only major hiccup that could derail a strong season for blueberry producers.

“I think there is no reason to doubt that consumption will hold steady, except for pricing,” Shelford said. “We will definitely see prices be significantly higher for the 2021 crop than we saw for the 2020 crop. And, if the law of supply and demand works, which I think it still does, we will see some tendency for pricing to slow demand.”