US: Berry demand strong but growers not benefitting

Demand for fresh berries continues to be strong, representing approximately 19 percent of annual fresh fruit spending in US retail stores. Despite this fact, rising production costs and resource constraints are compressing domestic producer profits, and complicating the role/impact of berry imports. These topics are examined in a report titled "US Berries - Increasing Consumption is Not a Silver Bullet" that was released this week by Rabobank's Food & Agribusiness Research (FAR) and Advisory Group.

Increasing costs of labor, land, and water -- especially in California -- are major challenges to profitability, according to the report's author, Roland Fumasi, vice president and senior analyst with FAR. "One of the biggest contributors to the ongoing growth of fresh berry consumption is its year-round availability," says Fumasi. "That being said, the premier growing regions in California are also high-value land areas where weather is good and urban encroachment is always occurring." This in addition to increases in regulatory constraints, water challenges, and rising labor costs, have limited producer profitability.

Also examined in the report are how domestic production challenges and increasing demand are impacting the role of imports, and how imports continue to influence domestic production. Imports have been instrumental in allowing for year-round berry availability, which has positively impacted demand. However, increasing availability of imports also brings challenges for some US growing regions; particularly Florida, and Southern California. Increasing US demand for strawberries, raspberries, and blackberries will likely be satisfied by increased imports, not expansion of domestic production. However, the versatility of blueberries continues to allow for production expansion within the US.

The report examines other specific factors impacting strawberries, blueberries, raspberries, and blackberries. It also highlights the ongoing opportunities and challenges in the organic berry space.

For more information:
Jessup Wiley
Rabobank
Tel: +1 559-447-7946
Email: Jessup.Wiley@rabobank.com
www.rabobankamerica.com