Ample strawberries puts pricing to promotable levels

From Fresh Plaza | 27 February 2023

Overview of strawberries from California and Mexico in the U.S. market, complemented by charts from Agronometrics. Original published on February 27, 2023. 

A good volume of strawberries is available right now. “Most of the volume we’d been expecting and waiting for came right before Valentine’s with the bulk of the product coming on now. So we’re in the midst of the peak of fruit down in Florida. The quality is good as well,” says Gus Pappas, Co-CEO and berry expert of Pete Pappas and Sons in Jessup, Maryland. Pete Pappas and Sons sells conventional and organic berries from multiple growing areas throughout the year.

He notes that typically at this time of year, Florida has an advantage in strawberry production given the freight differentials compared to pulling product out of California. The Central Mexican season is also winding down and Baja California is starting up. “It’s hard to bring Baja product across right now and California has also had four inches of rain in the last week with a few different storms so they’re up and down as well,” says Pappas. He notes Pappas & Sons will stay with Florida production until the end of March and then begin the transition to Baja product.

strawberry prices by ori 1

Source: USDA Market News via Agronometrics.
(Agronometrics users can view this chart with live updates here)

Managing volume

Meanwhile, demand is good for strawberries. “A lot of this extra volume came on unexpectedly this week and last week. We didn’t think it would come so soon but demand is good for it,” he says.

That puts pricing at promotable levels. “I expect once this explosion of fruit gets through that pricing will get back down to manageable levels. I think pricing will go up a little bit because right now they are hovering a little bit under production costs,” he says.

That’s the particularly delicate balance right now–balancing pricing between growers and retailers. “Growers would like to get prices up to where they can contend with the new costs they have in packaging, labor, etc. All costs are up exponentially and if growers have to sell below production costs, that’s not a recipe for success,” says Pappas. “The costs though also translate to a certain price point and retailers are looking for more aggressive prices to get that price per clamshell down to more promotable levels.”

The News in Charts is a collection of stories from the industry complemented by charts from Agronometrics to help better tell their story.

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