How to play “Forecasting Vs Reality “ game… and not die trying!

Guest article by Diego Castagnasso, a fresh produce and blueberry industry expert. Loud, opinionated, INFORMED! Diego writes DC’s B-Side’s newsletter as he speaks and speaks as he writes. You can subscribe, under your own peril, to his newsletter here or visit his less fun (for now) website Drip Consulting.

Last week, I jumped directly into the organic blueberry forecast…

Although it’s important to many growers, it would be around 11% of the total Peruvian exports, and what I am about to “talk “about affects them too.

Disclaimer: Always bear in mind that how the information affects you depends on where you are standing, so, I’ll try to be as generic as possible, and that means I can’t go deep “here” but you always have the chance to get more within a CALL.

Now let’s play a little…

Forecast Vs Reality… the only game that you WIN when you TIE

For this game, I took the last 3 seasons of Agronometrics export data from Peru and the last 3 forecasts from Proarandanos.

Then I made one big graph out of it

Here we are…

When forecasting, there is some information, THEY (the producers) know:

1. When we pruned and how much.

2. How are the plants responding to what we fed them

3. What varieties we have and how old our plants are.

4. Other info.

…and others that THEY don’t:

1. Climate

2. Climate

3. What would happen with politics (Tariffs, strikes, etc)

4. Will we have enough people when we need them?

5. Other info.

Based on that, THEY send a production curve to Proarandanos so they can aggregate ALL the curves and make one forecast.

What we can see is that the curves look very “SMOOTH” Vs reality.

Almost like they are distributing the kilos “evenly” within a curve…

A very SAFE and valid way to forecast…

Why would you create “waves” if nobody knows what will REALLY happen?

ONE SMALL DETAIL…

When you are as BIG as Peru in the blueberry industry (33% of the total), a 20% difference in ONE WEEK’s forecast might imply more than 15% of the total volume for the WHOLE (52 weeks) season of one of your fellow exporters.

But Diego…. again… WHAT DOES THIS MEAN TO YOUR CLIENTS, MEN??? (Asked by a friend)

Short answer… depending on which one!

Look at this line (On week 41 (2024), there was 17.412.025 Kg forecast, the real Kg exported 20.446.070 Kg. That meant -17,42% off and -3.034.045 kg, which is why the graph shows that in the blue zone almost getting red.

That meant:

· For a Peruvian producer that he had more competition to find harvesters, more buses for those harvesters, etc., etc.

· A Peruvian Forwarder, to find more containers, space in flights and boats, trucks to move the fruit etc., etc.

· The exporter needs his clients to purchase more kg or find new clients to sell the extra fruit, etc.

· A South African producer finds it more difficult to sell his fruit and probably at a lower price because Peruvian exporters would probably be pushing the prices down to get more volume out.

· The European importer is getting a lot of offers and starts driving prices down, while talking to the Retailers to see how much more they are willing to take and at what price.

… and that is just on the surface, there are more complications happening that add to this “Kaos”

And now we can start again… with a new forecast “April’s Projection Kg 2025/26”

What lies ahead?

Questions….

and each one of the players in this game will have theirs depending on the side of de board they are…

Those questions will evolve into different scenarios, and the sooner you start dealing with them … the better you’ll be!

Two things I am sure….

1- That curve needs more peaks and valleys!

2- I am GOOD at working out possible scenarios.

And the best thing… I am just a CALL away!

So, finish reading, let’s work through your potential scenarios and gain a competitive edge NOW.

Have a GREAT Week!!!

And remember, if you liked what you read, send it to a friend; if not, unsubscribe…

PS: Proarandanos releases many forecasts per year, so I tried to use the one closest to the start of the season (April-May release) or any earlier to that point. To be precise, I used:

· PROYECCIONES CAMPAÑA PERÚ 2022-2023 (Actualizado en mayo-junio 2022)

· PROYECCIONES CAMPAÑA PERÚ 2023-24 (ACTUALIZACION ENERO)

· PRIMERA PROYECCIÓN PERÚ CAMPAÑA 2024-25 (19 ABR)

· Proyección T25-26 Perú 1ra proyección abril

PS1: One thing to take into consideration is that the curves might have 2 normalization processes. One is at the producer’s table, and the other is at the Proarandanos table, so that might be the reason why they look so “smooth” while the reality shows peaks and valleys.

Although this is not bad per se… well, I think that they have enough historical information to put that into the forecast.

PS2: The CALL is being upgraded to serve my clients better. Soon, you’ll be able to choose from

– The Call

– Friends & Family

– The Call VIP

Stay tuned for the new services!

Written by Diego Castagnasso