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Fresh produce prices are up, and the majority of consumers are concerned about the rising cost of their food and beverage bill, including fruits and vegetables.
That’s according to the March 2022 fresh produce report titled “Inflation Remained the Big Story for Fresh Produce in February 2022,” from IRI and 210 Analytics.
The report, covering the four weeks ending Feb. 27, shows that, while dollar sales are “looking good,” the “volume pressure is real,” 210 Analytics President Anne-Marie Roerink told The Packer in an email. “Combined fruit/vegetable inflation is now trending in the double digits with no signs of slowing down any time soon.”
Measuring multi-outlet stores in the U.S., including supermarkets, club, mass, supercenter, drug, military and other retail food stores in February, market research company IRI found continued grocery price inflation over and above the elevated 2020 and 2021 levels. In February 2022, the average price per unit across all foods and beverages was up 10.3% versus the same weeks in 2021, and up 16.8% versus February 2020.
“In our February IRI shopper survey, we found that 90% of shoppers have noticed the price increases across the various grocery departments and a whopping 96% of those consumers are concerned about it,” Jonna Parker, team lead for IRI, said in the report. “In response, 75% of consumers have already made one or more changes to their grocery shopping, up considerably from 64% in January 2022.”
Fresh produce prices are elevated over last year and at a slightly higher rate than total food and beverages, reported Roerink, noting that in February 2022, the price per pound for total fresh produce increased by 10.9% over February 2021. “The latest 52-week look was lower, at 7.6%, given the much milder inflation in the second quarter of 2021,” she reported.
While fruit inflation reached its highest level yet (up 16.1%) in February, fresh vegetable inflation was far below average (up 6.2%), according to IRI data.
“Fresh produce inflation reached double digits and consumers’ concern over these kinds of price increases is shared by the industry,” said Joe Watson, vice president of retail, foodservice and wholesale for the International Fresh Produce Association. “Consumers are focused on finding good prices and promotions and minimizing waste at home, which puts great emphasis on freshness and shelf life in the store. At the same time, consumers balance their spending across canned, frozen and fresh purchases, and many simply buy less to stick to their budgets. Many of the measures pressure volume sales.”
Fresh produce sales reached $5.6 billion in February 2022, and while this figure surpasses the record set in 2021, dollar gains were inflation-boosted and units and volume sales declined year on year, reported Roerink.
“We certainly have to acknowledge that big price increases tend to pressure volume sales,” said Watson. “But it is also important to note that it is hard to measure the effect of supply chain disruption: we cannot sell what we do not have. Out-of-stocks have been a severe problem for departments across the store since the start of the pandemic and fresh produce has also been affected by the labor, transportation and other supply chain issues. Actively communicating and providing recommendations for alternatives are important best practices in case of out-of-stocks.”
A deeper dive into dollar versus volume sales shows that fresh produce pound sales trailed behind year-ago levels all throughout 2021, according to the report. “In January 2022, pound growth dropped to its lowest level since the second quarter of 2021, and the performance worsened in February,” noted Roerink. “While dollars increased by 4.6%, volume dropped by 5.7%, creating a 10.3 percentage point gap between volume and dollars due to inflation, as well as lower levels of promoting.”
A look at the top 10 fresh produce items in terms of dollar gains further reveals rising inflationary pressure.
“The top 10 in absolute dollar gains showed that smaller sellers, limes and mixed fruit, can still be big contributors to department growth,” said Parker. “But more than anything, it shows the impact of inflation. With the exception of mixed fruit and salad kits, all top 10 growth areas had double-digit inflation, led by much higher prices year over year for limes and avocados.
“Meanwhile, salad kits continue to be strong sellers, and I think at-home lunch is an important part of that,” Parker continued. “We still have a lot more people working from home today than we did pre-pandemic and our February survey showed that salads are among the top five things people make for lunch when at home.”
By Brandon Demack, ALC McAllen
On the Saturday before Super Bowl Sunday, avocado imports from Mexico into America were put to a complete halt after threatening messages were sent to a United States plant safety inspector’s official phone.
The avocado industry is another victim of the turf battle between the cartels in the western parts of Michoacán and will put a strain on avocado imports into the United States for the foreseeable future. The U.S. health inspector was carrying out inspections in Michoacán when the threat was received, but luckily for consumers, it was the day before the Super Bowl so all shipments of avocados for Super Bowl parties and restaurants were already shipped and weren’t affected.
Avocados are considered “green gold” in Mexico, as it is a multibillion-dollar business and the industry even broke records in 2020 to become the world’s largest producer of “green gold.” Unfortunately, however, as the growth continues to rise, so does the threats from the nine identified cartels operating in the area.
In response to the issues going on with cartels, farmers have been starting to arm themselves and establish self-defense groups to combat this to the reluctance of Mexican President Andrés Manuel López Obrador. This violence and issues in Michoacán will hopefully subside sooner than later.
The U.S. responded to the threatening messages by putting more security measures in place for inspectors. On February 18, 2022, it was announced that the inspection of avocados in Michoacán would resume. The rapid response to the threat shows the importance of a working supply chain between Mexico and the U.S.
It would have been hard to fill the large gap left by the lack of avocados coming from Mexico. Mexico provides around 80% of avocados consumed in the U.S. and a longer ban would have drastically impacted the supply of avocados in the U.S. With the resumption of imports, consumers do not have to worry about a shortage or price hikes and can continue to enjoy avocados.
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Brandon Demack has been with the Allen Lund Company since July 2011. He first started in the Dallas office and in March of 2019 he transferred to the McAllen office becoming the operations manager of produce. Demack attended the University of North Texas with a Bachelor of Science in Logistics and Supply Chain Management.
Chilean fresh fruit export volume totaled 2.62 million tons, equivalent to $5.05 billion FOB, during the calendar year 2021, according to
The Chilean office of Agricultural Studies and Policies (Odepa) and reported by Portal Portuario.
Exports registered an increase in volume of 2 percent while its value dropped by 1.9 percent compared to the same period the previous year.
The main commodity exported were cherries, registering a volume of 336,000 tons equivalent to $1.589 billion FOB, reflecting an increase of 49 percent in volume and 1 percent in value compared to the same period the previous year. The main destination was China with 89 percent of the total value of cherry shipments.
Tables grapes are next in line, registering 525,000 tons equivalent to $927 million FOB, registering a decrease of 13 percent in volume and a drop of 10 percent in value compared to the same time period the previous year. The main destinations were the U.S. with 47 percent and China with 15 percent.
Apples came in third, with 643,700 tons equivalent to $617.2 million FOB registering a decrease of 2.5 percent in volume and 5 percent in value when compared to the same time period the previous year. The main buyers were Colombia with 12 percent, the U.S. 11 percent, the Netherlands 8.3 percent, and India 7.8 percent.
Blueberries came in fourth with sales of 113,000 tons equivalent to $573 million FOB. They mainly shipped to the U.S. with 48 percent, the Netherlands 19 percent, and the UKL 9 percent.
These four commodities along with kiwifruit and avocados account for 83 percent of the total value of fresh fruit exported during the analyzed period.
In the past five years, imports of Peruvian ag products have soared from seventh place in the ranking in 2017, to third place in 2021, a position that it retains for the third consecutive year.
At the same time, the demand for food in the U.S. has shown a steady rise. This was reflected in the increase in imports, going from $53.2 billion in 2017 to $63.5 billion in 2021, reflecting a growth of 19 percent.
During this period, one of the most favored countries with the highest U.S. demand was Peru. Purchases of fruits, vegetables, and grains went from $2.04 billion in 2017 to an estimated $3.23 billion in 2021, reflecting a growth of 58 percent, as reported by Agraria.
In 2021, grape imports in the U.S. totaled 680,162 tons for $2.073 billion, 2 percent more in volume and 10 percent more in value compared to the previous year. The main suppliers were Chile with a 38 percent share (3 percent less than the previous year), Peru with 32 percent (4 percent more), and Mexico with 27 percent (3 percent less).
Blueberry imports in the U.S. in 2021 reached 310,097 tons for $1.904 billion, 14 percent more in volume and 22 percent more in value compared to the previous year. The largest suppliers were Peru with 34 percent (3 percent more than the previous year), Canada with 26 percent (2 percent less), and Mexico with 21 percent (3 percent more).
Asparagus imports to the North American market totaled 294,364 tons for $751 million, 11 percent more in volume and 4 percent more in value compared to the previous year. The main suppliers in the U.S. were Mexico with 67 percent (3 percent more than the previous year), and Peru 32 percent (3 percent less).
In 2021, avocado imports in the U.S. totaled 1.19 million tons for $3.003 billion, 7 percent more in volume and 18 percent more in value compared to the previous year. The main suppliers were Mexico with 89 percent (1 percent less than the previous year), Peru with 7 percent (similar to the previous year), and the Dominican Republic with 3 percent (similar to the previous year).
U.S. organic fresh produce imports are surging, according to USDA import statistics.
Mexico is a leading source of imported organic produce, according to the USDA, and top organic produce imports tracked by the agency include avocados, blueberries, greenhouse peppers, bananas and mangoes.
Value of U.S. imports of Mexican produce, for the December 2020 through November 2021 period, were:
- Avocados: $171.4 million, up 44% from 2020 and 2019;
- Blueberries: $138.7 million, up 40% from 2020 and up 133% from 2019;
- Greenhouse peppers: $85.2 million, up 18% from 2020 and up 31% from 2019;
- Bananas: $84.4 million, up 5% from 2020 and up 44% from 2019;
- Mangoes (September through May): $22.8 million, up 51% from 2020 and up 96% from 2019;
- Mangoes (June through August): $22.8 million, up 60% from 2020 and up 180% from 2019;
- Squash: $20.2 million, down 17% from 2020 and up 3% from 2019;
- Bell peppers (field): $18.5 million, up 64% from 2020 and up 186% from 2019;
- Raspberries: $15.9 million, no comparison available;
- Strawberries: $9.78 million, no comparison available; and
- Blackberries: $8.55 million, no comparison available.
U.S. imports of Peruvian organic produce are increasing fast, according to USDA statistics
Value of U.S. imports of Peruvian produce for the December 2020 through November 2021 period, were:
- Blueberries: $134.1 million, up 125% from 2020 and up 185% from 2019;
- Bananas: $40.8 million, up 4% from 2020 and down 4% from 2019;
- Ginger: $29.02 million, up 27% from 2020 and up 131%;
- Avocados: $15.9 million, down 4% from 2020 and down 7% from 2019; and
- Mangoes (September through May): $6.2 million, up 3% from 2020 and up 20% from 2019;
Ecuador is a leading supplier of organic bananas to the U.S. market.
Value of U.S. imports of Ecuador produce, for the December 2020 through November 2021 period, were:
- Bananas: $122.7 million, up 4% from 2020 and down 4% from 2019; and
- Mangoes: $2.5 million, down 15% from 2020 and down 30% from 2019.
Chile is a significant supplier of organic blueberries and apples to the U.S.
Value of U.S. imports of Chilean produce for the December 2020 through November 2021 period were:
- Blueberries: $84.8 million, up 26% from 2020 and up 44% from 2019; and
- Apples: $21.1 million, up 4% from 2020 and down 36% from 2019.
Imports of organic bananas to the U.S. from Colombia totaled $76.7 million in 2021, up 24% from 2020 and up 28% from 2019.
U.S. imports of organic pears from Argentina totaled $9.2 million in 2021, up 19% from 2020 and down 2% from 2019. U.S. imports of organic lemons from Argentina totaled $1 million in 2020, up 374% from 2020 and up 281% from 2019.
New Zealand organic apple shipments to the U.S. totaled $22.7 million in 2021, up 14% from 2020 and down 9% compared with 2019.
Global logistics company C.H. Robinson of Eden Prairie, MN and Waymo Via of Mountain View, CA, the trucking and local delivery unit of autonomous driving technology company Waymo, have formed a long-term strategic partnership to mutually explore the practical application of autonomous driving technology in logistics and supply chains.
The partnership combines the benefits of Waymo’s innovative autonomous driving technology, the Waymo Driver, with C.H. Robinson’s Navisphere technology, which is the world’s most-connected logistics platform.
The collaboration will focus, initially, on running multiple pilots in the Dallas-Houston transportation lane, with Waymo Via autonomous trucks hauling C.H. Robinson’s customer freight. During and after the pilots, the companies will collaborate to shape the future development and expansion of autonomous driving technology as an additional transportation solution. This will provide much-needed capacity, help improve the carrier and driver experience and address the business challenges posed by long-term driver shortages.
“We are excited to partner with Waymo Via to explore how autonomous driving technology can help bring increased capacity and sustainability into our logistics strategies. Together, we are going to harness this emerging freight technology and its potential on behalf of customers and carriers,” said Chris O’Brien, Chief Commercial Officer at C.H. Robinson. “We believe there is a real opportunity to bring our scale and information advantage to bear to help develop transportation solutions for them and their ability to participate in and benefit from AV. C.H. Robinson is also best positioned to represent the role of drivers and small and mid-size carriers in a more autonomous future.”
“We look forward to this collaboration with C.H. Robinson, both for their deep roots and experience in logistics and transportation, but also as a company that shares our vision of how technology and autonomous trucking can change our industry for the better,” said Charlie Jatt, Head of Commercialization for Trucking at Waymo. “C.H. Robinson’s size, scale and platform gives us access to rich and unique transportation data along with customer relationships and pilot opportunities to help bring our Waymo Via solution to the market.”
Bobalu Berry Farms is celebrating its 60th anniversary this year and the Jones Family has announced it has transitioned to a fully integrated company.
Headquartered in Oxnard, CA, Bobalu for the first time will ship California fresh strawberries 12 months a year. In the past it has typically relied on fresh volume from Mexico during the winter months after the Santa Maria fall crop concludes, and before the spring season kicks off in Oxnard.
However, for the first time as the 60th anniversary is celebrated in 2022, the company has added a fall Oxnard crop in addition to Santa Maria’s fall program that will come on a bit later carrying fresh California fruit into 2023. Now Oxnard will be the first and the last district harvesting each year for the company within the state. The addition of the crop from Mexico will compliment domestic fruit providing a beneficial overlap during the holidays.
Bobalu points out in 2021 it introduced software integration as part of its expansion plans.
Columbian ag exports have set a new record reaching $8.496 billion in 2021, with 27 countries having opened their markets to 57 Colombian products through the government’s Health Diplomacy strategy. The announcement was made recently by Colombia’s Ministry of Agriculture.
The main destinations of Colombian exports during 2021 were the United States, with a participation of $3.147 billion, which represents 37.0 percent; Belgium, with $447 million, with a percentage of 5.3 percent; the Netherlands, with $399 million, representing 4.7 percent; and Germany, with $362 million, with a total of 4.3 percent.
Agronegocios reports this figure is 112 percent more than the goal established within the National Development Plan and 20 percent more than the $7.027 billion exported the previous year.
According to the report of the National Administrative Department of Statistics (Dane), traditional products such as coffee, bananas and flowers accounted for 62.8 percent, while non-traditional products represented 37.2 percent.
Among these non-traditional foods, the total amount was $3.162 billion. Colombia saw a considerable increase in beef and offal (the entrails and internal organs of an animal used as food), with a 120.7 percent boost from last year; milk and its derivatives, with 85 percent; Tahiti lime, with 60.3 percent; passion fruit, with 55.1 percent; and avocado, with 50 percent increase over 2020.
East Coast North America container ports congestion worsened as more ships diverted to avoid West Coast gridlock, further delaying the flow of goods to consumers and driving up costs, according to S&P Global Platt.
There where were 31 ships anchored off the Port of Charleston, South Carolina, Feb. 22 while another 13 were waiting off the coast of Norfolk, Virginia, according to Platts cFlow trade-flow analytics software.
At the Port of Houston, 11 ships were anchored in queue to berth and near the Port of New York and New Jersey, nine ships were queued.
“We’ve had our boxes sitting and waiting to enter New York/New Jersey for more than two weeks,” an importer based on the East Coast said. “It’s impacted us for sure but with nearly all ports facing the same situation, there’s nothing we can do to avoid it for now.”
Port congestion at the Los Angeles/Long Beach port complex still overshadowed the East Coast, with 66 ships in queue to berth Feb. 22, down from a record of 109 ships on Jan. 9, according to the Marine Exchange of Southern California.
Platts cFlow data showed four ships anchored near the ports with one drifting nearby. The Safety and Air Quality Area was established in November to reduce air pollution by keeping waiting ships 150 miles off the California coastline, and many shipping lines electing to slow steam the trans-Pacific voyage to save on fuel.
Other West Coast ports have reduced congestion during the Lunar New Year slowdown in China earlier in February. There were nine ships in queue at the Port of Vancouver and six ships waiting to berth at the Port of Oakland, while Seattle-Tacoma had eliminated its queue by Feb. 22, according to cFlow.
Meanwhile, the number of container ships waiting for berths in Los Angeles/Long Beach has continued to decline, falling to 66 on Wednesday — as low as it was back in mid-September.
The longer voyage from Asia to the US East Coast through the Panama Canal loses its appeal if wait times for transit are long at arrival, however, shipping lines are looking to increase rates on the route in March with increased demand.
The Port of Savannah was one bright spot, having eliminated its queue of ships at anchor by deploying five pop-up container yards across the Southeast US to move cargoes out of port terminals. A buildup of cargoes and equipment in the ports tends to slow productivity.
Market participants will closely watch developments with the International Longshore and Warehouse Union representing West Coast port workers, whose multi-year contract with shipping lines and marine terminals expires July 1. West Coast port operations were disrupted for months when contract talks hit an impasse in 2014-2015, causing many shippers to divert to the East Coast wherever possible.
“A West Coast labor strike could be the biggest issue for shipping this year,” a US-based freight forwarder said. “That could see widespread force majeure declarations on contracts between [cargo owners] and shipping lines, and a huge swing in higher spot rates to the East Coast.”
The Chilean fruit industry and authorities have marked the first shipment from the port of Talcahuano (San Vicente Port) en route to Los Angeles, California, according to PortalPortuario. This adds another option for the country’s fruit production to reach northern markets for fruit harvested in both Central and Northern Chile. The first shipment took place the week of February 7th and included 9,210 pallets of fresh fruit, including blueberries, grapes, pears and stone fruit.
The development is part of a strategy from the port concessionaire San Vicente Terminal Internacional (SVTI) and the port operator Puertos de Talcahuano to diversify the sectors served by the facility.
“This first shipment of this year’s refrigerated fruit confirms the multipurpose work of our concessionarie SVTI, and at the same time demonstrate that the San Vicente Port is an attractive option for agricultural exporters not just in the central and southern regions of Chile, but also from the north”, said Guacolda Vargas, development and sustainability manager of Puertos de Talcahuano.
This first logistical run included the participation of around 300 refrigerated trucks that moved goods from the regions of Coquimbo, Valparaíso, O’Higgins, Maule and others. Authorities from Chile’s agricultural and livestock service SAG and fruit exporters association ASOEX were also on hand.
Chile’s fruit industry depends largely on the ports of San Antonio and Valparaiso in the center of the country, both of which have suffered in the past from logistical bottlenecks and labor issues.