Argentina blueberry suppliers count on strong showing

09/15/2009 02:25:52 PM
Abraham Mahshie

Thanks to good weather and maturing blueberry bushes, Argentina suppliers are counting on a strong showing this year despite reports that last year’s troubled season caused many growers to go out of business.

“What Argentina and Chile are doing are providing our customers with a continuous supply of blueberries that fills a year-round product,” said Mike Hollister, vice president of sales and marketing at Driscoll Strawberry Associates Inc., Watsonville, Calif. “Argentina typically starts a new crop that complements the winding down of the North American supply.”

Hollister said the Argentine deal, which is concentrated in October and November and winds down in December, has the important role of bringing “new fresh blueberries” to the marketplace.

Hollister expects Driscoll to have twice as much supply as previous years thanks to new growers participating and maturing fields in Tucuman, Entre Rios (site of Concordia) and Buenos Aires provinces.

Dave Bowe, owner of Dave’s Specialty Imports Inc., Coral Springs, Fla., said he expects double volumes if weather remains good, though he warns of too much volume.

“Anything that’s going to grow is going to double what it did last year,” he said. “Now you’re going to get to the point where somebody is going to go out of business because you’re going to have too much.”

Keith Mixon, president and chief executive officer of SunnyRidge Farm Inc., Winter Haven, Fla., said he expects export volume this year from Argentina to be about 25 million pounds, which is similar to last year.

“Weather has been similar to last year and the crop is on track with quality and volumes. We are looking forward to a great year,” he said, while adding that the risk of spring frost still exists.

Janice Honigberg, president of Sun Belle Inc., Washington, D.C., said her Sun Belle Argentina manager similarly reported projections of 26.4 million pounds of fresh exports if pricing remains viable for producers.

“Last year, there was export of 11,035,145 kg (24.3 million pounds.) Of this, 7,434,022 (16.4 million pounds) were exported to the U.S. This 11 million kg (24.2 million pounds) quantity would certainly have been larger but volumes were curtailed as prices dipped,” she said. Clarifying that overall volume from Argentina will not be double, Honigberg said, “Though larger, this is hardly double the volume from last season.”

Honigberg said the growing area has shrunk this year, down by 500 hectares from the 3,800 hectares in production for last year’s deal.

“Last season was very poor for growers,” she said. “Prices dipped below cost of production There were quite a few growers that couldn’t continue.”

Honigberg said despite some growers leaving the marketplace or declining to harvest this year, volumes should be similar to last year.

“The overall tonnage should be about the same,” she said. “If there is a freeze, that can be reduced. If the growers understand that the pricing will become untenable for them, they will stop shipping, go frozen or stop fresh.”

The mix of reports from Argentine suppliers is largely a result of a shakeup of producers after last year’s freeze losses and unsustainable pricing for growers.

“I don’t think there are new crops coming in, but crops are becoming mature,” said Marcelo Estrada, a freelance produce marketer based in Miami. “Based on that situation, it is expected that the farms will produce more fruit, but not all the growers are harvesting.”

Estrada pointed out that this year the main difference is improved weather.

Bruce Turner, head of operations for Giumarra VBM International Berry LLC, Wanatchee, Wash., agreed chilly July weather and a slight frost in September pushed back the crop a bit, but he is still counting on good quality and high volume.

Joe Barsi, director of business development at California Giant Inc., Watsonville, cautions that weather in Argentine is unpredictable and frosts have already caused some losses this year.

“The Buenos Aires and Tucuman regions have suffered several frosts this season and this has impacted the volumes on the early varieties and the higher valued fruit,” he said.

Barsi said his suppliers utilize overhead frost protection in order to avoid any major crop loss.

The Argentine deal that links the Michigan/British Columbia deals with the Chilean deal is gaining prominence as a stable go-to for year-round berry retailers.

Additionally, Argentine suppliers say the country is firmly committed to the commodity, while advances are being made to ensure quality and consistency despite logistical challenges to transportation.

“They had a very good year this last year as far as volumes. It’s been positive to have those bigger volumes, and it draws more attention in the fresh market,” said Mark Villata, executive director of the U.S. Highbush Blueberry Council, Folsom, Calif. of last year’s deals in Argentina and Chile. “It makes blueberries a year-round product in the consumer’s eyes.”

Villata said the progress is transitioning blueberries from a summertime-only fruit to a year-round commodity.

“Now people are considering it all year round in the winter months,” he said. “It creates more consumer interest. As consumer interest grows, it’s a win on both sides.”

Asked about pricing of the winter blueberries, Villata said volumes are growing and imports are increasing each year as blueberries gain notoriety for their healthfulness.

Citing per-capita consumption numbers, he said from 2003 to 2008 consumption rose from 20 ounces per person to 26.6 ounces per person. Of that consumption, five years ago only 8.7 ounces were fresh compared to 12.3 ounces consumed fresh in 2008.

“The real bump has been in the fresh consumption,” he said.

Barsi said blueberry production in neighboring Uruguay also is helping to boost the deal.

“Last year, Argentina and Uruguay combined exported approximately 11.2 million kg (24.6 million pounds),” he said. “This year, total production is forecasted for approximately 16.5 million kg (36.3 million pounds), of which approximately 12.5 million kg (27.5 million pounds) are exportable. This is an increase of about 12% over last season.”

Per region, Barsi reported 3.4 million kilos (7.5 million pounds) from Tucuman; 6.5 million kilos (14.3 million pounds) from Concordia; 1 million kilos (2.2 million pounds) from Buenos Aires; and Northern and Southern Uruguay accounted for 1.32 million kilos (2.9 million pounds) and 330,000 kilos (726,000 pounds), respectively.

The overlap between the Argentine and Chilean seasons also is drawing attention to the logistical concerns of each country.

“The early season out of Chile overlaps with the late season of Argentina. It’s a natural overlap. In North America, it’s relative to New Jersey, Michigan and other regional areas transitioning supply,” said Driscoll’s Mike Hollister. “They complement one another, but there are times when they overlap.”

Hollister said the overlapping happens in November and the first half of December when the overall supply from Chile is still very light.

Honigberg described the two programs as dovetailing perfectly as final air shipments from Argentine combine with the first Chilean production arriving by boat.

Supplers said concerns arise because of the eagerness for suppliers to change deals and avoid fumigation and air freight costs associated with the Argentina deal.

Many growers believe that a drop in fuel prices should make air transportation costs lower this year, thus reducing costs that may help meet grower needs more easily.

“Retailers are looking to price sharp and aggressively so that they can sell the product in large volumes,” said Honigberg. “The differences from last year are that there are fewer exporters, an earlier start date and growers did stop last year when the pricing started going too low.”

Nonetheless, Honigberg said she believes the Argentine deal should dovetail well with the Northwest and Michigan seasons. She said that should result in a smoother production curve that will allow earlier entry for larger packs including 6-ounce, pints, and earlier participation in club stores.

“I don’t think there will be an issue on marketing,” she said. “I think the fruit will move really well, and the market will be ready for it.”



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