Torrential rains last week brought an early end to Central California’s strawberry-growing season. And with a big storm also hitting Mexico’s main strawberry region, Gro expects US strawberry prices will continue rising through November before returning to normal levels in December.
Strawberries are widely used in consumer food products by large packaged food manufacturers and some beverage companies (think flavored iced teas and hard seltzers), as well as bakeries and, of course, food distributors and grocers. These buyers could face tighter strawberry supplies for much of November, and product may be of lower quality. However, since the current gains in shipping point prices, which are the cost of the product at the origin, are expected to be short-lived, it’s unlikely they will be passed along to retail consumers.
Shipping point prices for conventionally grown strawberries are currently 33% higher than at this time last year. Similar shipping point price spikes occurred in 2015 and 2016 following heavy fall rains, peaking respectively at 43% and 35% above average levels. In both years, prices returned to normal levels within a few weeks. Gro expects strawberry shipping point prices will continue to rise through November to similar numbers seen in 2015 before tapering off in December.
Around 90% of US strawberries are grown in California. Historically, the Salinas-Watsonville season tends to end in early to mid-November, but the abnormal rain storm that brought 35.8 mm of precipitation caused quality and harvesting challenges, essentially ending what crop was left to be harvested.
Farther south, Santa Maria and Oxnard were spared the worst of the rains, but the crop isn’t yet ready to harvest. The normal transition down the California coast usually occurs in early to mid-November, but the rains washing out the remaining weeks in Watsonville have resulted in earlier reliance on Santa Maria and Oxnard. Fresh berry market tightness and higher prices typically accompany transitions in production periods, as discussed in a previous Gro Insight article, but prices this year have risen more than normal.
Mexican imports have begun to arrive and additional relief will come as shipments accelerate. Michoacán, Mexico’s main strawberry-growing region, experienced its own rain storm in late October in a script reminiscent of 2015, when both California and Mexico saw heavy rains at the same time.
Assuming decent growing conditions going forward, December will see more strawberries from Florida and Mexico in addition to Santa Maria and Oxnard.