Delays in Mexico, the southern United States and Spain are causing spring supply limitations in the world’s leading blueberry markets. According to Cort Brazelton, director of business development at Fall Creek Farm & Nursery, these supply factors have meant North America and Europe are “in the process of not having years reflective of industry trends”.
Brazelton says very cold weather in north and central Mexico has “slowed down everything including blueberries”, while at the same time freezes in the southeastern United States and California have also pushed back volumes.
“Mexico doesn’t have huge volume in any of the weeks because of its very extended season as an evergreening country – they’ll pick for six months,” says Brazelton, who is known for his global blueberry reports based on extensive stakeholder interviews and co-founding the International Blueberry Organization (IBO).
But now there has been even less volume out of Mexico in the late winter, early spring period.
“What’s really different this year that’s unlikely to be consistently repeated is there was a major freeze in the southeastern U.S. and a mild one in California,” he says.
“There were a series of freezes. While California is reporting they’re not as far down as they thought they would be, they are seeing a real disruption in their early crop.
“What that’s done is it’s left light availability in the spring. What we were on track to have in the spring before that freeze in the southeast and the freeze in California was heavy volume early in the spring period because Mexico has been delayed.”
The expert explains that an understanding of Mexico’s blueberry industry needs to be broken down into three geographies: Central Mexico with production from fall to early spring; Northern mainland Mexico, mostly from Sinaloa, with production from March to early May; and Baja California with a season that runs from late winter through to June.
All three of these regions have suffered delays, but they have been most acutely felt from Central Mexico as it accounts for the majority of production at the moment.
“That whole deal was delayed but instead of Mexico colliding with the southeast and California, what they’re encountering is a pretty open market in terms of volume,” says Brazelton.
“Mexico’s quality has been pretty consistently good due to weather, hand harvesting and field packing, as well as good varieties.”
In this context, Brazelton’s advice to new growers in the southern United States is to treat the current market situation as an anomaly.
“If you’re a new grower in any of these regions, you’re not getting a season that indicates what the future is going to look like,” he says.
“A normal season is when Mexico is slowing down actually and the volumes are really hitting in the southeastern U.S. and California.”
He says the peak from these regions will still come as per usual in May into early June, to be followed by a “pretty significant” northern highbush blueberry crop.
“It’s still early days but it looks like this should be a very big summer – from Michigan to the Pacific Northwest everyone’s on track to having what would be a normal crop. Last year was short so that’s important,” he says.
“The movement of frozen inventories has been significant – we’re getting close to a five-year low in public cold storage inventories, which affects the summer deal more than the spring deal in North America,” he adds.
“It wouldn’t be good if we were going into this next summer highbush season in North America with high inventories and a very large crop.”
He mentions the delayed supply from Mexico left more room than usual for late-season blueberries from Chile, a country which had a “big year” despite increased volumes coming from neighboring Peru.
Europe: A growth market that may be set for more affordable prices in 2018
Brazelton says it was interesting to see a slight decrease in Chilean shipments to the U.K. this past season and more fruit going into continental Europe, along with more Peruvian blueberries also entering the EU.
“It is a fast-growing and reasonably functional market – their qualities are certainly higher. They want closer and fresher when they can get it, even more than the U.S. and Canada,” he says.
Data on the European blueberry market is nowhere near as clear as in North America, with a lack of “active coordination” between producing countries.
But what Brazelton has heard is reports of increased consumption by existing consumers as well as higher rates of new consumers and repeat purchases.
“The other thing about Europe is that because a lot of retailers do have gate keepers on quality and varieties – what gets in the door – it’s very common for the consumer experience to be more positive than what happens in the U.S. and Canada,” he says.
He says the upcoming supply situation does not bode so well for the prices received by European and Moroccan growers, but the silver lining is that European consumers will soon be seeing more blueberries at affordable prices.
But what has caused this scenario?
“This has like North America been quite cold. I can’t believe how delayed the Spanish and Moroccan season is,” he says.
“The Agadir production region in Morocco wasn’t nearly as delayed as others – they certainly weren’t early but things have been delayed in the south of Spain and the north of Morocco.”
These regions usually have a peak of production between late April and May, but now that whole peak is set to be moved back by 14-21 days.
“If you’re a supplier or retailer you know it’s coming, so there are reports of retail programs in place at prices that are not reflective of today’s short market,” he says.
“You can interpret it two ways – one, it’s buyers taking advantage of the situation that’s coming, or two, the other way to look at it is a demand building before peak volumes come. There is a strong argument for both.
“The fact is there is by European standards going to be a big crop in that May window.”
Brazelton describes this as a great opportunity to change the approach to blueberry retailing.
“It’s also a great time for the industry to consider changing pack sizes. As an American I’m always shocked at how small these pack sizes are in Europe,” he says.
“It’s exciting to see there are going to be some larger pack sizes in the north. I’ve seen it in the Netherlands, I’ve seen it in the U.K.
“As much as you talk about the price per kilo, people are buying clamshells, they’re not buying kilos; they’re buying a container, so put more fruit in the container.
The blueberry sector researcher and varietal specialist clarifies the European market has a long way to go in terms of volume, and while growth is positive the market is still far from North American levels.
“Spain is the largest producer in all of Europe and it is significantly smaller than any one of the top six producing states in the U.S.,” he says.
After the Spanish and Moroccan seasons, the market will then transition to highbush blueberry supplies from northern and Eastern Europe.
“What’s different is a lot of these new sources are going to have small-to-medium size commercial crops,” he says.
“So a few years ago the only real volumes in the summer came from Poland, Germanys and the Netherlands, and the Germans ate all their fruit. Northern Italy used to ship to other countries but Italian consumption is increasing so much that a lot of Italian summer fruit goes to Italy.
“Now suppliers of summer fruit in Europe will include Poland, Germany, Netherlands, Italy, but it’ll also include Lithuania, Serbia, Romania, Ukraine, north of Spain and Portugal, so pretty dispersed.”
Non-EU countries like Ukraine and Serbia have the opportunity to export to Russia, and Brazelton says it will be interesting to see how much of their supply goes east versus west.
“My observation anecdotally is that as companies in the Ukraine for example professionalize you’ll often see a larger portion of their fruit go west as they’re able to go through the hoops needed to supply the U.K. and the Netherlands.”