Study: Strawberry prices steady, acreage increasing Strong year-round demand for straw- berr ies has encouraged Cal i fornia farmers to plant more acreage, with market prices likely to remain steady in 2022, according to a new report from RaboResearch, a division of Rabobank. Even though strawberry sales continue to lead in the berry category, the lender warned that it also expects some level of uncertainty, volatility and high produc- tion costs in the short run. Strawberry acres planted in the fall— which reach peak production in late spring through summer—increased to 30,300 this year, 6.4% higher than 2021, according to the California Strawberry Commission. This represents the highest fall-planted acreage since 2015. The Sal inas-Watsonvi l le growing region continues to have the largest fall-planted area, with 12,813 acres, a 5% increase compared to last year. Fall plantings in Santa Maria increased 9% to 11,408 acres, while Oxnard is up 8% to 5,947 acres, the commission reported. RaboResearch said it expects straw- berry volumes will be highest during the first week of May. By then, SantaMaria’s harvest will be in full swing, Oxnard will have significant volumes, and produc- tion in Salinas and Watsonville will be ramping up. Strawberry volumes are expected to hit their lowest point around mid-No- vember, when production in Salinas and Watsonville and SantaMariawind down, the bank reported. After increasing acreage of organic strawberries in 2020 and 2021, California farmers planted 4,584 acres this year, down about 4%. It could be because premiums for organic strawberries fell well below 20% during several weeks in 2021, the bank noted. Organic strawberry production represents about 12%of total state acreage.
The U.S. market absorbed more than 2 billion pounds of fresh strawberries re- cently—and consumption continues to grow, the bank said. This places straw- berries among the fruits with the highest proportion of households reporting pur- chase, just below bananas and apples. As such, the bank said it expects aver- age prices to remain steady and above pre-pandemic levels. But growers are seeing higher fertiliz- er costs compared to 2021. The lender noted that prices of themost widely used fertilizers are up nearly 100% in whole- sale California markets, and pricing vol- atility will likely continue in the coming months, “as we can expect markets to re- act to each and every action and reaction surrounding current global tensions,” the report said. Majormarket forces are shaping the fu- tureof high-techcontrolled-environment agriculture, or CEA, which “has recently attracted many prominent names in the NorthAmerican strawberry industry,” in- cludingDriscoll’s, theworld’s largest ber- ry breeder, grower and seller, the bank re- ported. The company is leading the way by partneringwithPlentyUnlimited Inc., one of the largest indoor vertical farms in the U.S., the report said. RaboResearch analysts noted that Walmart recently announced a $400million investment in Plenty, “a strongmarket signal in favor of this type of partnership.” Adoption of CEA historically has been driven by increasing demand for year- round supply of seasonal produce. For indoor-grown strawberries, analysts said seasonality and product differentiation will also be important factors supporting their growth. “However, in recent years, especial- ly since the pandemic, the interest in high-tech CEA, such as hydroponic greenhouse and hydroponic/LED ver- tical farms, has instead been driven by calls to amend the fresh produce supply chain, making it shorter, safer, greener, more consistent and resil- ient,” the bank reported. Being in its early stage of development, indoor-grown strawberry productionhas to differentiate itself from field produc- tion in order to grow, bank analysts said. In the medium term, growth of CEA strawberries “will indirectly but greatly depend on the extent to which open- field strawberry production deals with the major economic and environmental challenges it is currently facing, for which CEA can effectively offer feasiblemitiga- tion solutions,” the report said.
STRIKE PESTS EARLY. STOP SCALE DAMAGE BEFORE IT STARTS
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6 Ag Alert April 13, 2022
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