California strawberry processors are facing pressure in 2026 as lower field prices are offset by higher labour costs and increased competition from imports.
Field prices for grade 1 fruit opened at around US$0.58 per lb, below last year's levels. However, this has not translated into lower processing costs. "The technical debt in costs is offsetting the field-price relief," a market participant said, referring to higher minimum wages and tighter labour availability linked to immigration enforcement.
Labour shortages are leading processors to offer higher wages, maintaining a higher cost base for processed products. IQF strawberries FOB California were recently assessed at US$1.10 per lb, down US$0.10 month-on-month due to increased competition from Egyptian exports. Market participants indicate pricing for California-grown IQF whole mediums is closer to US$1.20 per lb.
© Mintec/Expana
Imports from Egypt are adding price pressure, with reported deals in the mid-US$0.90s per lb FOB California. However, some buyers and processors have raised concerns regarding food safety. These concerns relate to past issues, including a 2016 recall linked to Hepatitis A and reports of EU rejections due to pesticide residues.
In January, Poland rejected frozen strawberries containing Oxamyl, a pesticide restricted in the U.S. Research covering EU border inspections between 2021 and 2024 showed detection rates of pesticide residues increased to over 90 per cent in 2023–2024, compared to 63 per cent in 2022, with 11 exceedances of maximum residue levels recorded over the period.
Fosetyl-aluminium was identified as the most common pesticide, with increases also recorded in boscalid, azoxystrobin, and acetamiprid. Multiple residues were detected in single samples, including substances not approved in the EU.
"Some industry participants expect monitoring and potential testing of Egypt-origin retail products in the U.S.," noted one Expana market observer, adding that confirmed residues could lead to recalls and impact market access. The Egyptian government has disputed these reports.
The current market reflects the combined impact of labour costs and import competition, limiting the effect of lower raw material prices on processing margins.
Source: Mintec/Expana
