Blueberry boom: Worldwide growth creates challenges for NW producers

From Capital Press | 31 July 2020

Overview of the northwest blueberry season by Doug Krahmer of Berries Northwest, Cort Brazelton of Fall Creek Farm and Nursery, Kasey Cronquist of the U.S. Highbush Blueberry Council and Mark Hurst of Hurst’s Berry Farm, complemented by charts from Agronometrics. Original published on July 30, 2020.

ALBANY, Ore. — On a seasonably warm July afternoon in the fertile Willamette Valley, Doug Krahmer stood between rows of organic blueberries and watched as a large mechanical harvester rolled slowly through the field, rattling bushes heavy with ripe fruit.

Measuring a little more than 15 feet tall, 11 feet wide and weighing 7 tons, the harvester seemingly floated in the distance over neat rows while fiberglass rods, or “fingers,” shook the berries onto a conveyor belt that swooped them to the upper deck and into plastic crates.

From there, the crates were loaded into refrigerated trucks and driven from the farm north of Albany, Ore., to a packing shed east of Portland.

Krahmer popped a berry in his mouth, reflecting on what he said has been a fairly decent growing season.

“Weather-wise, it’s been OK,” said Krahmer, president of Berries Northwest. “It’s getting hot now, but we’re past that critical point.”

Twenty years ago, blueberries were a niche crop in Oregon and along the West Coast. Most U.S. production came from states such as Michigan and New Jersey. Now the Northwest is the world’s dominant blueberry-growing region, posing new opportunities and challenges for the region’s growers.

Krahmer, 64, began farming 35 acres of blueberries with his father-in-law in 1980. Then, he said, total production nationwide was between 125 million and 150 million pounds.

This year, Oregon alone is expected to break the 160 million-pound mark and Washington state is projecting a crop of 165 million pounds. The two states have gone back and forth in recent years as the country’s top blueberry producers by volume. Blueberries are Oregon’s ninth-most valuable agricultural commodity, at more than $180 million in 2018.

Berries Northwest now grows 420 acres of conventional and organic blueberries from the Willamette Valley to the Columbia River, including fresh fruit sold to Driscoll’s, a major brand based in Watsonville, Calif. With the mid-season harvest well underway, Krahmer said it is full speed ahead bringing the crop to market.

“We go from zero to 100 mph in about three days,” he said. “You better have your seat belt fastened.”

As the industry continues to expand, experts say blueberries are gaining popularity. However, factors such as higher labor costs and more foreign competition are simultaneously squeezing prices, forcing businesses to innovate to stay competitive.

‘Rocket ship ride’

Bryan Ostlund, executive director of the Oregon Blueberry Commission, said the rise of Northwest blueberries has been “just this rocket ship ride up.”

In 2009, Oregon farmers harvested 47.2 million pounds of blueberries, split between the fresh and processed markets. Since then, production has more than tripled, hitting a record 153.1 million pounds in 2019.

The reason, Ostlund said, begins with marketing. As consumers became more aware of the health benefits of blueberries in the 1990s, demand accelerated. Blueberries are packed with antioxidants, potassium and vitamin C, earning the coveted moniker of “superfood,” or what growers refer to as the “health halo.”

With its ideal climate and soils, the Northwest is a prime location for growing blueberries, Ostlund said.

“We can pretty much out-yield anybody anywhere in the world,” he said.

That momentum does not appear to be slowing anytime soon.

Kasey Cronquist, president of the U.S. Highbush Blueberry Council — a member-funded group that supports blueberry promotions and research — said household penetration is still only about 38%, compared to 70% or higher for strawberries.

“There is a lot of runway left for our industry to grab at household penetration rate,” Cronquist said, referring to the percentage of U.S. households that buy blueberries.

July is National Blueberry Month, and Cronquist said the U.S. Highbush Blueberry Council is focused on further driving demand by highlighting the fruit as healthful, delicious and easy to eat.

“Really, our theme is around the simple action of buy ‘em, eat ‘em and love ‘em,” Cronquist said.

Price check

The biggest issue facing growers, in a word, is price, Krahmer said. “You can put that in big letters.”

Not only are U.S. and Northwest growers increasing production, but they face greater competition in the marketplace from countries such as Mexico, Chile and Peru, which are flooding markets with fruit and all but eliminating the most profitable years that have sustained blueberry farms for decades.

Top 5 origins of fresh blueberries in the US market

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

“A lot of us lived on those ‘ups’ for a lot of years,” Krahmer said. “There’s not the ups anymore.”

Whereas before the price of freezer berries might fluctuate from 40 cents to $1.25 per pound, Krahmer said the range now is between 45 and 65 cents. Fresh market prices, meanwhile, constantly change throughout the season. Fresh market berries have the added expense of hand-picking.

Price (in USD) of fresh blueberries in the US market

Price2B2528in2BUSD25292Bof2Bf resh2Bblueberries2Bin2Bthe2BUS2Bmarket
Source: USDA Market News via Agronometrics
(Agronometrics users can view this chart with live updates here)

Krahmer said commercial farmers need a profit margin of around 55-60 cents a pound to make blueberries worth their investment. He said it is becoming tougher to meet those margins, especially for small farms

“Right now, the small producer is struggling,” Krahmer said. “Not that us bigger producers don’t have struggles, but we have some efficiencies of size that help us weather the storm at this point in time.”

Peru, especially, has become a force to reckon with. The country has exploded onto the scene, increasing production by 796% up to nearly 100,000 tons between 2015 and 2018, and is positioned to surpass Chile as the largest exporter of fresh blueberries.

Cort Brazelton, of Fall Creek Farm and Nursery in Lowell, Ore., said Peru has the advantage of being able to grow and ship fresh blueberries year-round, including the late fall season into the U.S.

While Brazelton said the flavor of berries from Peru is just OK, packers and retailers value the fruit because it is consistent in pricing, availability and has a low shrink rate.

Looking at the future of blueberries, Brazelton said he does not expect any one region will own supply during any part of the season. Nor does he expect pricing to return to past highs on a per-unit basis.

Origins of fresh blueberries in the US market during the Northwest season

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

“What is realistic is companies supplying fruit in any window who deliver on consistency in availability, consistency in pricing and low shrink, together with high movement,” Brazelton said. “That is what will get that shelf space. I think the Northwest can be a leader in this, from late June all the way into September.”

New varieties

Growers emphasized the need for advanced plant genetics and technology to make their businesses thrive amid the changing blueberry landscape.

Mark Hurst, 65, of Hurst Berry Farm and HBF International, a combined grower and packer operation in Sheridan, Ore., said the industry is working to improve its late-season varieties to better compete with Peru. A few options are now available, including Elliott, Liberty and Aurora, though Hurst said their taste could be better.

“If we can just come up with a firm berry that eats good late season, then we could very well compete with Peru,” he said.

Hurst, who helped establish the U.S. Highbush Blueberry Council in 2000 and was its first chairman from 2001 to 2007, said growers depend on a full lineup of blueberry varieties to help them capture the best prices throughout the season, which begins as early as mid-June in Southern Oregon and can run as late as early October.

“We’ve been somewhat successful on early-season and mid-season varieties, but late-season … it’s probably our biggest issue in the industry right now,” Hurst said.

Oregon State University is leading some of this research, with projects funded in part by industry groups. OSU’s North Willamette Research and Extension Center, 20 miles south of Portland, is home to the world’s only certified organic blueberry research planting.

Bernadine Strik, a professor in OSU’s Department of Horticulture and extension berry crops specialist, has spent more than 30 years fine-tuning production systems at the station. Her work has led to wider spacing between rows and trellises to hold up bushes — along with practices that have boosted the state’s organic production from around 2% to more than 30% of total volume.

Strik said the development of new late season varieties has been the biggest shift for the industry.

“Our goal, rather than have a huge peak in mid-season, is to have a more steady supply,” Strik said. “As you get huge peaks in production, you also tend to see a dip in price due to the volume.”

Strik praised Northwest growers as forward-thinking managers, focused on improving the yield and quality of their product to satisfy consumers.

Meanwhile, labor costs continue to rise. By 2022, Oregon’s minimum wage will be $14.75 per hour in the Portland metro area, and $12.50 in non-urban counties. That means growers are looking for greater mechanization, including harvesters like those at Berries Northwest and optical sorters in packing houses to save on labor.

Jeff Malensky, president of Oregon Berry Packing in Hillsboro, west of Portland, said labor for fresh market berries is particularly critical, since not all varieties can reliably be harvested by machine without bruising the fruit. Quality of berries is important since retailers now have more choices in where they buy.

“Technology will help us out in the future, but it’s not happening quickly enough,” Malensky said. “We as growers and packers have just had to become better at what we do.”

On-farm sales

Ostlund, of the Oregon Blueberry Commission, said he remains confident the Northwest industry will remain sustainable but acknowledged there are growing pains on the horizon.

“We will continue to see production increase,” he said. “I think the industry is going to be challenged by how we respond and how we keep up.”

It might be next to impossible for smaller farms that once made up the backbone of the industry to keep up commercially, since they will be less likely to afford the labor, infrastructure and food safety certifications required by packing lines.

Brazelton, of Fall Creek Farm and Nursery, said modern packing lines and cooling systems are now 5 times more expensive than they were 15 years ago. To justify the expense, those companies need to process a lot of fruit that, ultimately, smaller growers might not be able to provide.

The alternative route for small farms is to get closer to local consumers through U-pick farms, farm stands and farmers markets, Brazelton said.

“This local for local thing, there’s room for it,” Brazelton said. “Consumers are hungry for a connection with where their food comes from.”

Indeed, while on-farm sales represent the minority of Oregon blueberries, the channel has grown nearly six-fold, from 2.7 million pounds in 2009 to 15.7 million pounds in 2019, according to the Oregon Blueberry Commission.

Javier Fernandez-Salvador, an assistant professor at Oregon State University’s Extension Service, works primarily with small farms in Marion and Polk counties in the Mid-Willamette Valley. Five years ago, he conducted a survey of 55 organic blueberry growers statewide, and found that the biggest issue for them was market access.

“A lot of them were going to direct marketing,” Fernandez-Salvador said.

Labor availability has similarly impacted small growers. Still, Fernandez-Salvador has not heard of many who quit growing blueberries altogether. Instead, they have switched markets and scaled back, perhaps diversifying with other crops to make ends meet.

Brazelton said he anticipates current trends for operations of all sizes will continue to play out over the next 5-10 years.

“Our industry is entering a new phase of professionalization and maturation,” he said. “It’s not going to be boring.”

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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