The Evolving Landscape of U.S. Winter Grapes Supplies

| 12 January 2023

By COLIN FAIN to Vision Magazine | December 2022 |

The United States is one of the major importers of table grapes in the world, second only to Europe. Over the past 10 years, from the 2012- 13 to the 2021-22 season, U.S. table grape volumes increased by 25.8%, with imports from Peru growing sevenfold, USDA data shows.

Peru usually dominates exports to the U.S. during December and January due to seasonally higher prices. The U.S. and Chilean shipping seasons overlap only in December. As Peru’s season subsides, the Chilean season commences.

Although Chile is one of the leading global producers, imports to the U.S. from the country have decreased significantly during the past five years. Influence among suppliers in the southern hemisphere has substantially changed as a result of Peru’s emergence as a major supplier. Particularly, Peru has taken a sizable chunk of Chile’s former share in the U.S. import market.

Looking at the first two charts on the next page, the dramatic shift in market dynamics over the last five years is striking. Being further north in the country, the table grape harvests in the Atacama and Coquimbo regions of Chile are early in the season, generally in December and February. These grapes have been the most affected by the growing volumes arriving from Peru.

At the same time as there is increased pressure from volumes, the average spot market prices of table grapes in the United States have not increased substantially over the previous ten seasons. This means that the increases in input and transportation costs have been borne by the supply chain, squeezing margins and increasing pressure on producers.

Outlook for Peru

Table grape production in Peru occurs predominantly in two areas along the coast: Ica in the south (41%) and Piura in the north (22%). Vine maturation in the country is expedited by ideal growing conditions and a daily average of 12 hours of sunshine.

According to the USDA Foreign Agricultural Service, these conditions, combined with precision irrigation, enable Peru to mature vines 55% faster than in neighboring countries, thus facilitating the country to adapt swiftly to market needs and adopt superior cultivars. The U.S. market accounts for 41% of Peru’s grape exports.


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

In order to increase its marketing potential, Peru is constantly exploring new producing regions in both the north and south of the nation for prospective investments. Given the growing demand for grapes in the U.S., the EU, and China, we may anticipate Peru to continue gaining market share. In the 2022–23 campaign, Peru is anticipated to overtake Chile as the world’s top exporter of table grapes in terms of volume.


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


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

Outlook for Chile

While the majority of North American grapes are protected types, which are varieties higher in demand by global consumers such as the prime seedless, only a fraction of Chile’s grapes are protected. It has taken until this coming season for the Chilean industry to expect new varieties to make up more than half of the export supply.

If the country fails to adapt to this new varietal exchange, it risks losing a significant portion of its primary markets, such as the United States. Chile has also suffered from suboptimal weather, specifically severe droughts in the last decade.

The decreased profitability of table grapes has led to significant structural changes, including a reduction in planted area and replacement of grape varieties. The ratification of the long-awaited Systems Approach for Chile’s exports of table grapes, however, is a quantum leap in the right direction.

This significant agreement will benefit not just Chilean producers, but also the whole U.S. supply chain, including ports, logistics operators, importers, retailers, and, of course, consumers.


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

Written by: Colin Fain


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