Organic Blueberries in Gap with High FOBs

A trip to a national supermarket chain in Northern California this week revealed a scant supply of organic blueberries with a high retail price of $7.99 for a 6-ounce clamshell. That was reflective of an FOB price this week hovering close to $50 for a flat holding 12 of those 6-ounce offerings.

“We are in a gap,” said David Weinstein of Los Angeles-based Heath & Lejeune. “Peru and Mexico are late, and the Pacific Northwest ended quickly in early September.”

David Weinstein, Heath & Lejeune

It will be at least three to four more weeks before there are sufficient supplies from South America and Mexico to put the supply/demand curve back in sync, Weinstein said. The shortages are a case of weather-related supply delays in conflict with increasing blueberry demand, which has caused high prices.

“We live in the land of everything, all the time, for cheap,” he said. “People want their blueberries on their Cheerios in the morning no matter what time of year it is.”

Mother nature and the realities of climate change, however, are not always playing the game. In the past, the Pacific Northwest blueberry supplies would wind down gradually in September, overlapping with increasing supplies from South America and Mexico. This year, South America has been hit with El Nino conditions, and Mexico has been inundated with several heavy rain events. And this summer, for the second year in a row, the Pacific Northwest had very high temperatures for an extended period, which helped cut its season short.

“We live in the land of everything, all the time, for cheap. People want their blueberries on their Cheerios in the morning no matter what time of year it is.” - David Weinstein

Weinstein said he answers customers who are wondering what’s happening with a simple refrain. “It’s the fricking planet you live on,” he says, making no mistake that he is referring to climate change. He added that farmers are continually talking about earlier blooms, unusual rain events, and unseasonal heat. It is impossible, Weinstein believes, not to draw the connection.

Stephen Paul, category director for Homegrown Organic Farms in Porterville, California, also noted that the current sky-high FOB prices are the result of both a late transition and increasing demand. “Peru and Chile are dealing with a very strong El Nino effect this year, and Mexico was hit with Hurricane Hilary [in August], which has delayed its crop,” he said.

Stephen Paul, Category Director, Homegrown Organic Farms

While Homegrown did have some Pacific Northwest organic blueberries through September, Paul said volume shipments did not last past the first week of September.

“We are going to get our first import supplies in week 43 [Oct. 22-28]. We are three weeks to 30 days behind schedule,” he said. “We are seeing stronger FOBs on organic blueberries than we have seen in a long time.”

The demand side of the situation is also an important factor, Paul said. “You have to credit the blueberry community for growing its customer base,” he said. “Demand exceeds supply.”

While there were FOB sales above the $50 level this week, his reading of the market put the current price in the $40–$45 range.

“We are seeing stronger FOBs on organic blueberries than we have seen in a long time.” - Stephen Paul

Chile has just started to ship its blueberries and has actually increased its early shipment of both conventional and organic blueberries to the United States as a result of the higher prices caused by Peru’s delay, but volume is still yet to come.

Andres Armstrong, executive director of the Chilean Blueberry Committee, said through October 8 (week 40), total Chilean blueberry exports were at 512 tons (about one million pounds) compared to 229 tons last season by the same week. That total included 10 tons of organic blueberries, which were all shipped to the US market.

Andres Armstrong, Executive Director, Chilean Blueberry Committee

For the season, Chile is expecting a conventional blueberry crop in the neighborhood of 138 million pounds with an organic production of more than 26 million pounds, representing almost 20 percent of the total. Most of the organic production will be marketed in the United States.

Armstrong said that in this early part of the season, the high FOB price has led to an increased use of air shipments.