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Strawberries in 2020 are a tale of supply and demand, not pandemic

The national strawberry market in 2020 appears to have been influenced much more by traditional factors, such as weather and supply-and-demand, than by the COVID-19 pandemic.

With our analysis, we can conclude that in the case of strawberries, we have a very close relationship between volume and price, and that it is a product that is very sensitive to climatic variations, especially to rising or falling temperatures.

Blue Book has teamed with Agtools Inc., BB #:355102 the data analytic service for the produce industry, to look at how a fruit or vegetable fared in 2020 and what it should expect next year.

Looking back to looking ahead, we review annual volume YTD for the last three years.

The results are predictable, showing California driving the majority of the volume, while Mexico, Florida and North Carolina follow seasonally. One thing to note, over the last three years we have seen a drop in volume between March 15th and May 15th.

When we focus on the next six months, we can see the majority of the volume is coming from Mexico or Florida, while southern California ramps up.

This time of year is heavily dependent on the weather, and any impacts from hurricanes and tropical storms in Florida and the Gulf Coast can have devastating effects on the crop and quality.

When Florida produces good volume, it keeps pricing right below or slightly above the $20 lid. However, we see prices hover above $20 for longer periods of time when the Florida volume is down.

The leader in U.S. strawberry production remains California Central through the end of October 2020. Strawberries are one of the commodities in which despite the pandemic, their behavior and growth were not severely affected.

Producing Regions
California Central is consistently the highest producer of strawberries consumed in the United States, always accounting for about two-thirds of the market. This consistency is also evident when we move down the list to other regions (California South and Florida) which year after year rank among the top suppliers of strawberries.

Outside of North America, Mexico is the most important supplier of strawberries to the U.S. market, accounting for over 10 percent of all strawberries imported so far this year.

Strawberries represent higher prices in the last 3 months than in previous years.

When analyzing the F.O.B. price of strawberries from Salinas in the last 90 days, we can see that in 2020 the price since mid-September has been higher, reaching over $20 per box when in 2019 that same period of time reached $12 and in 2018 it barely reached $9.

In the case of the terminal price in San Francisco, we see the same behavior of much higher prices this year, since mid-September, even tripling the price obtained in 2018.

This price increase is due to the fall in volume (12 percent less than the previous year and 23 percent less than in 2018) in the same period of time that occurred this year.

This drop in volume is related to the high temperatures reached since mid-August in California, exceeding the barrier of 100 degrees, while in this same period of time in previous years the temperature of 90 degrees was not reached.

Additionally, the fires affected the state of California influencing the decrease in the production of this crop.

This drop in volume has caused the transition of the season to Mexico to begin 3 weeks earlier. So far this season the volume entering the United States from Mexico is 37 percent higher than in 2019 and 88 percent more than in 2018.

 

Paola Ochoa is operational director for Agtools Inc. She has as masters of nutrition from Universidad de Los Reyes and more than a decade of experience in the food supply chain.