This time of year, the U.S. mainly depends on California for its grape supply and typically, the transition to imports from Peru starts up. However, this is not a typical year. California witnessed many rain events in the past four to six weeks, which have a significant impact on the quality. "While California ships until the end of December in a normal season, some growers won't be able to get through the end of November on green seedless grapes," says Ira Greenstein with Direct Source Marketing.
Piura redirects to other markets
Due to California's early season, the U.S. will be dependent on Peru much earlier. However, Peru's early region, Piura in the north, has also been impacted by rain and volumes are down as a result. In addition, this region is redirecting some of its supply to other markets. "As a result of tariffs, Piura will send less fruit to the U.S. and focus on Europe and Asia instead." These markets welcome Piura grapes with open arms due to rain events in other parts of the world. India, a major shipper to Europe, experienced damaging rain events and is expected to lose 40 percent of its table grape crop. On top of that, grape production in the Orange River region in South Africa also suffered from rain. "This season, it seems as if rain is impacting the grape supply chain globally."
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Autumncrisp grapes in Peru that are eight weeks away from harvest.
Peru's volume is behind
With Piura's volumes being down, Peru has exported significantly less volume to the U.S. market so far this season. Through week 45, 2.5 million boxes have been shipped to the U.S., compared to 3.3 million boxes by week 45 last year. This is a 25 percent reduction compared to last season, but the difference with the 2023/2024 season is even more substantial. Back then, almost six million boxes had been shipped to the U.S. by week 45, a sheer difference of 60 percent.
Brazil's role is negligible
Could U.S. demand be met by other growing countries? In previous years, Brazil shipped about three to four million boxes of table grapes to the U.S. each season, with the majority being green seedless grapes. However, a 60 percent tariff has resulted in virtually no table grapes from Brazil coming to the U.S. this season.
Volumes won't peak until January
That means everybody is eagerly waiting for Peru's southern region, Ica, to start up. If there aren't enough challenges this season, shipments from Ica are delayed. "Everyone pruned early with the goal to start shipping in late November," shared Greenstein. However, cool weather is causing brix levels to develop slowly, delaying the season by two to three weeks. Peak arrivals into the U.S. were initially projected for the first two weeks of December, but this has been delayed to the last two weeks of December. "In fact, we won't see the real peak from Peru until the first week of January."
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High prices affect consumption
Initially, the industry wasn't worried about the absence of Brazil and the early finish of California as Piura and Ica in Peru would make up for the short supplies from these two regions. However, the extremely slow start from Peru will result in an incredibly short supply of table grapes in December. "I believe the spot market will continue to be elevated through January because it will take time to fill the pipeline," Greenstein commented. High prices are of big concern as the cost of food is already so high across the board and consumers will be forced to make choices. Table grapes are still considered a luxury impulse item and consumption is directly correlated to the price per pound. This past summer, table grape consumption in the U.S. was down and with prices only expecting to increase, the consumption outlook for the coming months is gloomy.
Greenstein is thankful for having a vertically integrated operation as it allows them to take control of the supply chain. The farming operations in Peru are heavily invested in Autumncrisp® and Ruby Rush® grapes from Sun World. "With these two winning brands, we are well positioned for the years to come." This upcoming season, the company expects to bring in 650,000 boxes of Autumncrisp® grapes from Peru and that number will increase to over one million boxes in the next two years.
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Ruby Rush grapes.
For more information:
Ira Greenstein
Direct Source Marketing
Tel: +1 (914) 241-4434
[email protected]
www.directsourcemktg.com
