( Farm Journal )

If 2019 is anything like 2018, the fresh produce industry will see many familiar challenges. 

Part of the industry can be expected to respond to foodborne illness outbreaks at some point in 2019. Fruit and nut exporters will seek to maintain global sales while fighting retaliatory tariffs in China and other key markets.

Retailers will seek a profitable niche in the expansion of online grocery commerce, and growers can expect to fight chronic shortages of trucks and farm labor.

Consumer demand for fresh produce remains on trend and that won’t change in 2019.

Crisis of confidence?

Keeping consumer confidence in leafy greens may be more difficult in the face of repeated foodborne outbreaks linked to fresh produce, and particularly romaine lettuce. 

In fact, Google’s “The Year in Search” for 2018 showed that romaine was the second most-searched food in 2018, and it wasn’t on account of a spate of new recipe searches for the leafy green.

With peak interest in romaine from Nov. 18 to Nov. 24, Google Trends revealed the commodity was on everyone’s mind when the Centers for Disease Control and Prevention advised consumers to avoid romaine all together.
In fact, the top related search terms for romaine in 2018 were:

  • romaine recall;
  • romaine lettuce recall;
  • lettuce recall;
  • lettuce e. coli; and 
  • e. coli romaine lettuce.

In a move the agency never attempted in previous outbreaks, FDA officials opted to increase requirements for consumer-level identification of romaine in response to the latest outbreaks. Based on discussions with producers and distributors, the FDA announced romaine lettuce entering the market will now be voluntarily labeled with a harvest location and a harvest date or labeled as being hydroponically or greenhouse-grown. 

“Consumers should look for signs in stores where labels are not an option. If signs or labels do not have this information, you should not eat or use it,” the FDA said Dec. 17.

While some industry operators objected to what they considered an overreaction by federal authorities in its first warning against romaine, industry leaders were hoping for greater collaboration and intelligence sharing with federal food safety officials in future outbreaks.

In 2019 and beyond, the industry will continue to focus on translating food safety research to practical farm level practices in efforts to stop persistent foodborne illness outbreaks.

Sales trends

Retail sales of fresh produce were running modestly above last year through the third quarter of 2018, with dollar sales up 2.7% and volume up 1.4% compared with a year ago. Organic produce sales continued to outperform the total produce department, with sales up 9.7% compared with the third quarter 2017.

The USDA’s Economic Research Service said retail fresh fruit prices will increase 1% to 2% in 2018 and increase 2% to 3% in 2019.

Meanwhile, retail fresh vegetable prices were forecast to change from zero to 1% in 2018 and increase an additional 2.5% to 3.5% in 2019.

Farm outlook

At the farm level, fruit and vegetable growers are increasing use of the H-2A guest agricultural work program at the same time pleading for government reform of the program to make it easier and less expensive to use. 

The Department of Labor reported that total H-2A positions certified in fiscal 2018, ending Sept. 30, totaled more than 242,000, up 21% from about 200,000 in fiscal 2017. About 10.5% of workers were used to pick berries, 6.1% to pick apples and 4.5% were used to pick melons.

A November farm labor survey by the U.S. Department of Agriculture showed there are some areas of the country that experienced agricultural wage rate increases of more than 20% in 2018, and the average national increase for farm labor was 6%. That’s far higher than the Bureau of Labor estimates for all wage earners — a 2.8% wage increase for the fiscal year ending Sept. 30 of 2018.

Citing tough export markets and low profitability, farm leaders asked Congress to freeze the H-2A adverse effect wage at 2018 levels while the methods of sampling wage rates are reviewed.

Truck rates were also a worry to grower-shippers, with a shortage of drivers and Department of Transportation Electronic Logging Device mandates causing rates to rise over the last 18 months. Truck rates from California’s Imperial Valley to Atlanta in mid-December were $7,400 to $9,500, according to the USDA, up from $4,800 to $5,000 at the same time a year ago.

At the farm level, the USDA said farm-level fruit prices were expected to decrease 2% to 3% in 2018 and decline an additional 3% to 4% in 2019. USDA said farm-level vegetable prices were expected to decrease 8% to 9% in 2018 and drop an additional 2.5% to 3.5% in 2019. 

Whatever the ink and paper forecast, look for the innate optimism of fresh produce growers and resilient consumer demand for fresh produce to leverage better results in 2019.

 

 
Comments
Submitted by Guy Milette, EVP Courchesne Larose on Wed, 12/19/2018 - 06:20

Great article Tom.
Always a pleasure to read you.
Happy Holidays.