Low temperatures and labor conflicts have cut the amount of fruit exports from Chile, an important producer of crops like blueberries.
Experts say reduced Chilean exports could be a double-edged sword for U.S. blueberry producers, but the market outlook for the 2014 crop will ultimately be more affected by domestic consumption.
Chile may export less blueberries to the U.S. but have more available for overseas markets, experts say.
According to USDA’s Foreign Agricultural Service, port strikes and frosts reduced fruit shipments during Chile’s spring season, which was winter in North America.
“There were several hiccups in the Chilean market,” said Rod Cook, president of Ag-View Consulting.
As a result, imports of frozen blueberries from Chile into the U.S. may drop to 45 million pounds to 50 million pounds, compared to more than 60 million pounds last year, said John Shelford, president of the Shelford Associates market consulting firm.
Shelford said he expects U.S. cold storage inventories of blueberries to bottom out at roughly 90 million pounds in 2014, a notable improvement over the 100 million pound low point last year.
Generally, a cold storage low point of more than 75 million pounds suggests weaker prices for newly processed blueberries, he said.
Even so, the smaller overhang will improve the price outlook compared to 2013, Shelford said. “I think prices will average higher this year.”
While reduced supplies from Chile will help reduce cold storage inventory, the main benefactor of U.S. producers is the healthy domestic demand for the crop, he said.
Sales of individually quick frozen blueberries at the retail level have been particularly strong, while ingredient sales and exports have been adequate, Shelford said.
“We’ve moved huge amounts of fruit out of cold storage,” said Cook. “It’s good to see that inventory being consumed.”
The popularity of fruit smoothies among young people appears to be at least partly responsible for the strong demand for frozen blueberries, said Cook.
Lower prices have also contributed to demand as buyers responded to better availability, he said. “Food companies are more willing to take risks and try new products when their costs are not as high.”
Chilean blueberries that weren’t sold on the fresh market may have been processed, raising available frozen supplies for export to South Korea and China, he said.
Chile has an advantage over the U.S. in those markets because it has negotiated lower tariffs, Cook said.
The U.S. industry should try to press for similar trade agreements, said Shelford.
It will probably be more difficult than in past years for per capita consumption of the crop to keep up with rising supplies, he said.
“We really need to work on the export business,” Shelford said. “We need to be much more aggressive.”