One of the big supply chain questions related to the coronavirus COVID-19 outbreak is the effect of the crisis on demand for particular commodities.
It stands to reason that the overall effect on produce will be uneven to this outbreak. Some say that value-added items have declined in demand, while whole commodities have increased in the wake of retail “panic buying.”
Apples are one of those “hardware” commodities that have seen brisk demand from consumers as they stock up on food for extended periods of working from home.
But what happens to all of produce demand when the millions of consumers are laid off from their jobs? What type of assistance will the government provide to offset that damage to the economy?
There is so much that is unknown, but here are a couple of near-term apple market observations from industry observers this week:
From Pro*Act’s March 18 market report, TJ Ware writes:
“The COVID-19 pandemic has undoubtedly impacted apple markets; retail is surging while foodservice has slowed to a snail’s pace. Advisories have many—across the nation— staying indoors, while restaurants, bars, hotels, schools, etc. close their doors to deter possible transmission of the virus.
Retail stores can’t keep enough fruit on their shelves. Many have begun to reduce the amount of SKU’s (no pears or organics) due to a lack of labor (employees staying home). Shippers continue to ship apples at a rapid pace; taking smaller, foodservice sizes (113-138ct) and packing them into 12/3# bags for retail orders and/or to export.
Surprisingly, except for retail bagged products, markets remain stable. With the expectation that this unfortunate situation will come to pass, shippers do not anticipate supply issues once things get back to a level of normalcy.”
From Markon’s March 22 market report:
“The large-size market (56- through 72-count packs) is climbing; storage volume is falling. Smaller fruit (100- to 138-count) is more plentiful.”
Check out these charts that tell the picture of apple pricing and promotion in the past year...
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