Upward Pressure Likely on California Strawberry Prices

The California Strawberry Commission has come out with the 2014 Acreage Survey for new planting, which makes for interesting reading for those in the fruit industry.

“Some of you may not realize that most of California puts new planting in the ground every year. Most notable is the reduction of newly planted acreage in Oxnard. It is down 17.9%, or about 1,800 acres. Oxnard represents about 25% of the total planted acreage in the state of California,” reported Peter Skolnick, president of Monterey, California-headquartered Imperial Frozen Foods.

The reason for this reduction is economic, as growers did not make money in 2013, he pointed out in a newsletter issued by Imperial on March 6. “Sometimes farmers complain about not making money, and that is often shrugged off. However, this time the complaints are legitimate,” said Skolnick, whose company specializes in supplying frozen fruit for private label packs.”

Less acreage means less supply, and since demand is almost always good, the conclusion is that there will be upward price pressure on California strawberries, both fresh and frozen.

The California Strawberry Commission has also come out with a breakdown of fall planting varieties.

“Always dependable, the University of California has done a great job coming up with varieties that meet consumer demand for quality and taste,” said Skolnick. “Additionally, University varieties, as they are called, meet the grower demand for yield and the ability to ship. Notably certain varieties fade away over time and get replaced.”

For example: the Albion variety has seen a 33.5% reduction in planted acres, while the Monterey variety has seen an 82.8% increase.  The Monterey variety now represents over 15% of the state’s fall planting.

The San Andreas variety has seen a slight increase in planting and accounts for almost 20% of California’s newly planted acreage. Proprietary varieties represent nearly 40% of the new plantings.

“Proprietary varieties are the ‘secret sauce’ in the strawberry business,” according to Skolnick. “These varieties are the ‘name brands’ of the strawberry business – kind of like Coca-Cola's formula that is highly protected, and only known to a few.”

Elsewhere in the berry patch, there were 11 million more pounds of blueberries in cold storage as of January 31, 2014, than were warehoused on the same day in 2013.  That represents only a 6% increase in holdings.  Keep in mind that the total cold storage holdings of blueberries are for all qualities and sizes.

“So, if you are looking for a specific pack style (large IQF), you may not find it,” said Skolnick. “This issue may put upward pricing pressure on the market for high-quality blueberries.”

Meanwhile, Chilean raspberries were a hot topic of discussion among members of the fruit industry attending the American Frozen Food Institute Convention (AFFI-CON) held recently in San Diego, California.

Harvest time in Chile is contra-seasonal to North America, and thus producers in the South American country can control the raspberry market in winter.

“Sometimes, high pricing due to shortages can push buyers away,” said Skolnick. “Chilean raspberries are at an historic high price, but is this high price justified due to legitimate shortage?”

Elsewhere on the map, the Pacific Northwest's 2013 crop was one of the best in years with a large portion of the pack going to high-quality IQF red raspberries.  There were nine million more pounds of IQF red raspberries in cold storage as of January 31, 2014, compared to the same day in 2013.