As the U.S. goes, apparently, so go the off-season berry producing regions, particularly in South America.
Growers in Argentina, especially, may have suffered lower returns in the last year than did their U.S. counterparts, said Frank Bragg, chief executive officer of Grand Junction, Mich.-based MBG Marketing.
“I’d say Argentina, for the whole season, most of the growers lost money,” Bragg said. “And of course, you look at the dynamics of the Argentinian varieties. They don’t lend themselves well to host shipping, so they must airfreight.”
In the current recession, that isn’t very cost-effective, Bragg said.
“With economics, with doubling of production in their window, it’s not going to support air shipments into the U.S., so the return back to the grower is going to be tough for these guys on a long-term basis unless they switch to hardier varieties that can go by boat,” he said.
Therein may lie the key to Argentina’s future success in the berry business, at least where the U.S. customers are concerned, Bragg noted.
“I think there are structural issues with Argentina being a much bigger player than they are, unless they plant varieties and also have the infrastructure to handle boat shipments to the U.S. successfully from a quality perspective,” he said.
Production in North America is increasing, and South America continues to provide a good off-season supply of berries, Bragg said.
“Especially when we look at fresh, (oversupply) is really not an issue because we’re using a counter-cyclical cycle that fits well for the fresh market,” he said. “There’s really no pressure on North American growers on the fresh side. And, frankly, there’s very little pressure there, as well. On the processed side, you’ve got to look at the wild North American crop, plus the cultivated processed crop that’s being frozen.”
Chile, meanwhile, is becoming a chief source of organically grown berries, Bragg said.
“Organic, especially out of Chile, has grown significantly,” he said. “Last year, we were at a point where about 50% of the crop out of Chile was organic. That has come on really strong. We’re also seeing in this kind of a market, the premium on organics starting to decline, so we have a large increase in the availability and the decline in the price premium.”
It’s still working well from a grower perspective, Bragg said.
“We continue to see a large push in California and the Pacific Northwest. I think California will struggle with the premiums that are likely to be out there. And I’m not sure with the yield loss difference between conventional and organic that that’s sustainable with the organic premium that we’re seeing today,” he said.
Why has Chile shifted to organic?
Bragg said the price premium is the attraction.
“Go back about seven years ago, I believe their total acreage was something less than 4,000 acres,” he said. “Now it’s more than 12,000 acres. It’s all new plantings, and they’ve specialized in trying to grow organic for the premiums.”
Bragg said Chile is by far the biggest source of imported berries.
Overlap between the import and U.S. domestic seasons has not been a major problem, said Art Galletta, sales manager for Atlantic Blueberry Co. Inc., Hammonton, N.J.
“Argentina and Chile export a lot of fresh fruit into our market, but they don’t overlap with us too bad,” Galletta said. “They overlap with Florida in the early spring. They start October-November on the earliest stuff coming out, and about the middle of this month, their buying starts decreasing and Florida has a chance to operate.”
Mexico is not yet a significant player, Galletta noted.
The quality of imported berries generally is indistinguishable from that of U.S. product, said Keith Mixon, president of SunnyRidge Farm Inc., Winter Haven, Fla.
“At times, berries from any of those regions are very good,” he said.