Up-and-coming agricultural powerhouse Peru has enjoyed several years of growth in U.S. markets, steadily expanding market share in fresh produce commodities such as blueberries, grapes, avocados, onions and asparagus.
But will a recent spate of bad weather, combined with El Niño, slow down across-the-board optimism for this South American exporter?
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The 2023 Peruvian avocado season was caught in a series of ill-timed weather events, upending early-season crop forecasts and resulting in low volumes at harvest. Chilly temperatures in the summer months delayed the start of the season, followed by a winter heat wave that stunted fruit growth and dried up volumes, according to Mission Produce’s CEO Stephen Barnard, on a recent earnings call.
What’s more, other commodities such as asparagus and onions have also experienced weather-related supply dips.
“Both Peru and Mexico have reduced imports in 2022, due to many contributing factors with mostly due to weather conditions. This decline in volume has continued into 2023 and has challenged industry and retailers,” Priscilla Lleras, executive director of the Peruvian Asparagus Importers Association, said in a news release.
A recent USDA statistics update echoed this year-over-year decline for asparagus, reporting that of the total imports for 2022, the U.S. imported 13% less in volume of Peruvian asparagus than the previous year.
With an El Niño weather pattern likely to disrupt typical weather patterns in Peru in the coming months, layered with the unpredictable effects of climate change, how do suppliers ride out weather-related hiccups?
Quick pivots possible with a diverse sourcing strategy
A leading supplier of avocados, Mission Produce was recently caught in the crosshairs of unfortunate weather events. The company reported lower-than-expected profits in the third quarter after “abrupt change in growing conditions” upended Peru’s harvest, CEO Stephen Barnard said on a recent third-quarter earnings call with investors.
The late season heat “negatively impacted anticipated volumes and fruit size across the Peruvian growing region,” Barnard said on the call. Mission Produce had set lower prices for customers earlier in the year anticipating a strong harvest. To pivot, the fresh produce broker leaned on its abundant supply out of Mexico and California to help offset lost volume from Peru.
“Our sourcing strategy diversifies our avocado procurement across multiple growing regions year-round. If supply is tight in one region due to natural or other causes, we source from other regions to promote a reliable supply of avocados,” Keith Barnard, Mission Produce’s senior vice president of sourcing, told The Packer in a statement. “During the Peru season, our other major origins for the U.S. market include California and Mexico.”
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Fluctuating growing conditions are an inevitable part of agriculture, so we have strategies in place to reduce the impact of those fluctuations. Despite varying growing conditions year over year, Mission Produce has remained resilient, Barnard said in the statement.
