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US Produce Price Volatility to Continue in 2022, Gro Expects

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Despite many pandemic restrictions having been lifted, food service providers and retailers will need to prepare for continued produce market volatility in 2022. 

As 2021 comes to a close, produce supply chains remain vulnerable to logistical disruptions as well as extreme weather events that could accompany the return of La Niña. In addition, worries persist that COVID could reemerge to again shutter restaurants and food processing facilities. 

Abnormal pricing pressures on avocados are continuing into the new year after emerging this summer, as Gro wrote about here. A surfeit of smaller-size avocados, known as 60-count and 70-count, drove prices lower, while a shortage of larger, 48-count fruit pushed prices up. Today,  48CT prices are still 10% above their 5-year average, while 60CT are 5% below average.  

Food service buyers able to vary their avocado purchases, such as for making guacamole, can take advantage of the price disparities and improve profit margins by moving to smaller fruit. But buyers locked into specific, larger-size avocados could see their margins squeezed. Gro expects the pricing trend to continue at least until new supply enters the market from California in early March. 

This Gro display shows the diverging paths of 48CT and 60CT prices starting in the summer, along with avocado import volumes, and allows Gro users to continue monitoring avocado supplies and prices going forward. 

While late-season price volatility in California leafy greens has subsided following the annual transition to Arizona, growing conditions need to continue to be closely monitored. Heavy October rains in California washed out much of the late lettuce and strawberry crops. Unexpected rains in the Yuma, Arizona, area could delay harvesting and degrade the crops. 

La Niña’s recent return, a second consecutive year for the global weather event, could lead to lower rain levels during the West Coast’s wet season and impact available harvests into 2022, including citrus, tree nuts, and apples in the Pacific Northwest.

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