A new report from Rabobank found that consumption of table grapes has stabilized through the duration of the COVID-19 pandemic, despite the extra costs that go into social distancing and changes in labor practices.

The report, written by senior analysts for fresh produce David Magaña and Roland Fumasi, found that retail fresh produce sales in the U.S. since from mid-March to May have grown, when compared to the same months in previous years. May and June produce sales stabilized at “higher-than-normal levels.”

“The table grape industry expects to take advantage of strong retail fresh produce sales in the U.S. and healthy snacking trends amid pandemic consumption patterns,” Magaña said.

The report estimated that in 2020 California produced 106.5 million 19-pound boxes of grapes, which was “slightly higher” than last year’s production, but fell 8% from two years ago.

The report also stated that blended prices were expected to be up from previous years at the beginning of the season and “higher than the observed prices two years ago during the second half of the season.”

Grape consumption per capita has remained at about 8 pounds per year for the last 15 years and volume has increased with population growth rates. However, the analysts note that overall fruit quality has improved considerably, as premium cultivars have been constantly developed and introduced, boosting the nominal farmgate value of US production at a compound annual growth rate of about 8% over the last decade. They expect these trends to continue but noted that water availability and labor cost will restrain acreage growth, along with an “increasingly challenging regulatory environment.”

“The industry is adapting with innovation and product differentiation to take advantage of the unique growing conditions,” the report stated. “Adopting higher- yield, higher-quality cultivars (selectively bred plant varieties) has been an important piece in making production more input- efficient.”

However, these challenges will also be present in other growing regions like Mexico, Peru and Chile. All of these regions are facing differing levels of water availability and being impacted by COVID-19 at differing rates.

Currently, Chile stands at the top for table grape exports and is poised to maintain that status in the upcoming year. Peru and Mexico will also play a role in world markets, with Mexico being a prime candidate to send grapes to the U.S. during late spring and Peru being expected to ship to the U.S., the European Union and Asia in the late fall and early winter.

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They expect overseas competition to continue, particularly from Peruvian imports at the end of California’s season. US table grape imports from Peru have increased at a compound annual growth rate of over 20% during the recent decade. Over the last two seasons, Peru has overtaken California’s spot as the second major exporter of table grapes in the world, ranking behind Chile.

The report also found that social distancing and transportation costs have made it more expensive to grow and market table grapes, but says that these practices are important to “maintain uninterrupted operations.”

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