John Giles, Promar InternationalOver the past 10 years, the U.S. fresh produce industry has seen a significant change in terms of the volumes produced and the direction of international trade. This has been driven by a combination of factors, not least emerging competition in terms of supply, as well as opportunities in a range of developing markets around the world.
Struggling to keep pace
In the apple industry, whereas world production has grown by just over 20% in a 10-year period from 62.8 million to 76 million tons, U.S. production has actually gone backward, from 5 million to 4.6 million tons.
In other key countries, production has continued to surge ahead. China has seen an increase by some 60% from 22 million to 36 million tons, India by some 70%, Poland by another 28%, Chile by around 36%, Brazil by 10% and Argentina by 26%. South Africa has seen production increase over 10 years by around 26%.
In the grape sector, fresh production has increased from 11 million to 19.8 million tons. U.S. production has fallen by around 3% at a level of 7.4 million tons, whereas there have been significant increases in China, Chile, Brazil and in a number of countries of the former Soviet Union, and Peru and parts of North Africa.
Cherry production bucks the trend for the U.S. and globally has seen an increase from 1.9 million tons to just over 2.2 million tons — around 16%. The U.S. share has increased from 204,000 to almost 314,000 tons — some 53%. There have also been significant increases in other regions of the world such as Turkey, Chile, India, and, again, parts of the former Soviet Union, but with consistent drops in overall production in key European Union countries.
A change of direction
When it comes to U.S. exports, again there have been significant changes in the volume and direction of trade over the past 10 years. While the Mexican and Canadian markets are still hugely significant for apples (accounting for 38% between them), U.S. exports to other markets such as India (up by a massive 77,000 tons), China (up by 21,000 tons) Indonesia (up by 27,500 tons) and Vietnam (up by 12,000 tons), along with a plethora of other emerging markets, have all accounted for an increasing share of overall exports.
U.S. exports of grapes have also increased by around 77,000 tons per year over a 10-year period. These have been spearheaded by significant increases to the likes of Indonesia, Australia, Mexico, Thailand, South Korea and Vietnam, as well as building trade in other parts of the world such as Central America, the Middle East and Russia.
United Kingdom direct imports of U.S. grapes have fallen from 14,000 tons down to 6,600 tons.
In terms of pear exports, U.S. trade has fallen slightly from just above 198,000 tons per year to just under this level.
Again, Mexico and Canada account for an impressive 65% of overall exports, but the real growth over a 10-year period is coming from increased exports to the likes of Brazil, Russia, Colombia, China and the Middle East.
For the cherry sector, U.S. exports are booming — up from 46,000 to 86,000 tons per year over a 10-year period. Japan and Canada still account for more than 50% of U.S. exports, but the long term growth is coming from Asia.
What does it all mean?
The historical view of the U.S. fruit sector was that with a huge domestic market to serve, it was more focused here than on exports. This has all changed, and with U.S. production often struggling to keep pace with other key producing regions, the U.S. industry has had to increasingly focus on its high quality, premium position in international markets. While the Canadian and Mexican markets are still of extreme importance, the real growth is coming from the emerging markets.
Europe is probably on the back burner.
And the role of the UK market in all of this change for the U.S.?
It is still seen as a flagship market, not least in meeting technical and environmental standards. The UK has now assumed the position of a classic “maintenance market” for most U.S. horticultural products.
Is the U.S. horticultural industry trapped in a domestic bubble? Not any more. It is now fully exposed to exactly the same pressures, opportunities and challenges as any other significant international supplier to the global fresh fruit market.
John Giles is a divisional director with Cheshire, England-based Promar International, an agri-food demand chain consulting company and a subsidiary of Genus plc. He is also the chairman of the Food, Drink & Agriculture Group of the U.K. Chartered Institute of Marketing.
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