The domestic blueberry season is rapidly coming to a close. The Pacific Northwest is in its last shipping week and Michigan has about two more weeks left to the season. “From both regions, volumes are very, very light,” says Evan Pence with Always Fresh Farms. With the domestic season ending, the industry is shifting to imports from South America. In recent years, Peru has been the main supplier of blueberries during the domestic off-season, but the country is having a challenging season due to the impact of El Niño. “Although shipments to the US are down more than 50 percent year-on-year, the situation is far more complex than that,” commented Pence. “There are different layers of the onion that will be peeled back in the next four to five weeks.”
When analyzing historical data, there is a certain volume of blueberries Americans consume in the fall. In recent years, Peru went from being a shoulder season into an over-supplier on the US market between October and December. The country has been shipping an abundance of fruit at such aggressive pricing that countries like Mexico and Argentina were no longer able to compete. Because Peru had become the dominant supplier to the US, this year’s steep production decline has a big impact. “We’ve come to the realization that the US is going to be void of real supply until week 41. After that, the supply chain will start to ease to the extent that retailers will have some volume to work with but supplies certainly won’t be good,” assured Pence.
Although supplies are significantly down, the real shortage is being driven by the pack size. Over the years, the industry has transitioned into larger pack sizes with 18 oz. clamshells being the norm while about 10 to 15 years ago, packaging of 4.4 oz. was normal. “While we are trying to get product into small clamshells, it appears to be extremely difficult for Peru to transition to smaller packaging. Since we can’t get product into small clamshells fast enough, some retailers won’t have any supply until the situation starts to ease in about five to six weeks,” Pence said. Mexico on the other hand is more flexible and more tailored to work with 6 oz. packaging. As a result, the country will be playing a key role in blueberry supplies to the US market this year.
Mexico and Argentina
Last season was challenging for Mexico. Peru’s heavy supplies were offered at such aggressive pricing that it knocked Mexican suppliers off. “In addition, Peru has the advantage of offering superior varieties. The country is more apt to go in at large scale when it comes to plantings of new varieties while in Central Mexico, it is more challenging to find large, scalable plots of land.” This year, Mexico finds itself in a better situation. Another country that will be stepping in this year is Argentina. Although the costs of shipping are extremely high due to air transit, the country sees an opportunity to ship higher volumes to the US this season.
Because supplies are so tight, prices are extremely high. A flat of pints is in the upper $40s or lower $50s while the sweet spot for solid movement is more between $20 and $24. High prices like these are turning consumers off blueberries and demand is down as a result. “While the price is expected to be high for the next five to six weeks, we need to transition to lower prices as soon as the supply situation improves. It is important to get the consumer back to buying blueberries,” Pence finished.