Prices for 2013 crop may drop, but demand remains strong, experts say

By MATEUSZ PERKOWSKI

Capital Press

Frozen blueberry supplies have piled up in cold storage warehouses across the U.S., potentially weighing on the prices for the 2013 crop, experts say.

“We’re rapidly growing this crop, more rapidly than usage,” said Rod Cook, president of Ag-View Consulting. “There’s a lot of fruit and that pile continues to grow.”

At more than 166 million pounds, blueberry inventories are up by one-third in the past year, according to the latest cold storage report from USDA.

While higher stocks typically depress prices, Cook and other experts say the situation isn’t desperate because consumption of the fruit seems to be steady.

“Blueberries are still really in demand and that demand is strong,” said Mark May, CEO of the Rainsweet processing company in Salem, Ore. “Along the way, you’re going to have imbalances one way or the other.”

The crop has entered a new era in which volumes have risen in terms of consumption and production, which can be unnerving for farmers and packers when they see inventory levels rise as well, said Cook.

“If we see real decline in usage, that’s a significant issue,” but so far the opposite has been happening, he said.

Food manufacturers are releasing more new products that feature blueberries while quick-serve restaurants are including more offerings with the fruit, Cook said.

“There’s very little preparation to do other than popping them in your mouth,” he said. “That’s very appealing to that type of user.”

To avoid a significant negative impact on the market, the blueberry industry should move about 70 million pounds of frozen blueberries before the next harvest, said John Shelford, consultant with Shelford Associates.

Heavier inventories in 2013 may dent blueberry prices by 10-15 percent compared to last year, but it’s unlikely the industry will see another precipitous drop like it did in 2009, he said.

The industry’s situation was different then, with weaker exports and domestic consumption as well as a general economy in free fall, Shelford said.

During the peak of harvest in 2009, blueberry inventories were up by roughly 50 percent over the prior year, according to USDA data.

Prices fell in response, prompting buyers to clear out the overhang which eventually allow prices to recover, said May.

The dynamics in 2013 will hinge on whether consumption is able to keep pace with the increased supply as well as the performance of other major growing regions, he said.

“Geographically, if everyone has a bumper harvest we’re going to be in a bad situation,” said Dave Dunn, general manager of Willamette Valley Fruit Co.

However, regional issues will usually prevent blueberry growers in states with earlier harvests — like Georgia and Michigan — from uniformly achieving top yields, he said.

Chile, a major player on the international scene, had some weather disruptions and a lot of its crop also went into the fresh market, Dunn said. “It didn’t turn out to add much to the pot.”