Demand keeps ahead of supply, representative says
By MITCH LIES
The U.S. Highbush Blueberry Council at a March meeting in San Francisco added $500,000 to the $4.1 million in assessment revenue it projected for the 2011 crop.
The 12 percent increase is indicative of two things, according to Doug Krahmer, the Oregon representative on the council.
"It speaks to how conservative we were when we made the first projection," Krahmer said. And it speaks to how much U.S. blueberry production is increasing.
The council collects a $12 a ton assessment on blueberries produced in the United States and imported blueberries.
Oregon saw its crop volume increase from 59 million pounds to 65 million pounds between the initial 2011 crop estimate and the final crop estimate.
As a region, the Northwest saw its estimate jump from 237 million pounds to 263 million. Estimates are provided by the North American Blueberry Council.
In 2011, Oregon is estimated to have produced nearly as many blueberries as the perennial front-runner, Michigan.
Michigan produced 71 million pounds in the final 2011 estimate, still the top state, but well below the 106 million pounds it produced in 2010, when it nearly doubled Oregon's 54 million pound crop.
Michigan yields plummeted in 2011 due to poor growing conditions in the summer.
Oregon, which was third in 2010 production, moved to second in 2011. Washington leapfrogged Georgia into third, increasing production from 39 million pounds in 2010 to 61 million pounds last year.
Overall, U.S. production increased from 489 million pounds in 2010 to 533 million in 2011. Experts predict continued production increases in 2012.
The increase, in addition to providing more assessment revenue for the U.S. Highbush Blueberry Council, is forcing the industry to keep focused on increasing demand, Krahmer said.
So far, everything is fine, Krahmer said.
High demand last year, coupled with Michigan's poor crop, helped produce record prices, Krahmer said.
Also, Krahmer said, cold storage stocks are expected to be at a good level, leading producers to believe prices could stay high again.
"I'm staying optimistic," Krahmer said. "I think prices are still going to be profitable."
Frozen prices reached a record average of around $1.40 a pound last year, Krahmer said.
"All we're trying to do is keep the demand curve slightly ahead of the supply curve," Krahmer said. "So far, we've been able to do that and keep both curves going up."
Also, according to Bryan Ostlund, administrator of the Oregon Blueberry Commission, exports are expected to continue to climb.
"Demand and supply are increasing steadily, and I don't see anything that is going to stop it any time soon," he said.
Ostlund said Korea, which recently opened its market to fresh blueberries from Oregon, represents a significant new market. And consumers in Japan continue to increase their purchases of U.S. blueberries. Also, Ostlund said, China represents a significant market if the U.S. can access it. China currently bans imports of fresh blueberries from the U.S., although some enter through the Hong Kong gray market.
Krahmer said some are worried that increased production will drive down prices in 2012, similar to what happened in 2009 when growers were drawing less than 40 cents a pound for frozen berries after hitting record high prices in 2008.
The main difference between 2012 and 2009, Krahmer said, is less cold storage on hand and more consumption. In 2008, Krahmer said, consumption dropped due to high prices, leaving a glut of berries in cold storage entering the 2009 season.
Consumption has not declined this year, Krahmer said, with 12 million to 13 million pounds of frozen blueberries moving monthly.