ST. LOUIS, November 1, 2012 - Following a recent growth trend, sales of U.S. fresh berries will continue to expand by seven percent per year over the next three years, according to a report released today by Rabobank’s Food and Agribusiness Research and Advisory (FAR) group. Despite an upward sales momentum, the report finds that berry growers and grower-shippers will be challenged to maintain profitability due to a number of factors.
The report, titled “The U.S. Fresh Berry Boom – Who Will Profit from the Growth?” cites escalating production costs, resource constraints, import competition and the sheer market power of retailers as reasons why producer margins will continue to face pressure.
“While the near-term outlook for U.S. fresh berry sales looks good, producers are likely to continue to experience rising costs and constrained resources,” said Karen Halliburton Barber, assistant vice president and senior agricultural analyst with FAR and the author of the report. “Successful players in the coming years will embrace growing demand with greater production efficiencies and innovation,
The report concludes that given the likelihood of increased pressures on profit margins, industry consolidation is likely among less efficient U.S. berry producers. Smaller independent growers can however seek to create strategic production partnerships and niche market opportunities in an attempt to stay economically viable.
The most successful producers are keeping up with growing consumer demand while controlling costs through gains in efficiency and productivity. This has been possible because of breakthroughs in new varieties, which have increased yields, extended growing seasons, and resulted in improved product flavor and shelf life. New technology solutions and crop protection alternatives are also emerging, together with opportunities for growers to manage production risks through greater geographical diversification.
A full copy of the report is available to the media by contacting Lisa Verbeck at Rabo AgriFinance or Sarah Kolell at AdFarm.
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