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Strawberries; Where We’ve Been, Where We’re Going

Everybody loves strawberries, right? That’s particularly true if you are in the business of selling strawberries. What with seven or eight pounds of per capita annual consumption in the U.S. and Canada, we’re dealing with close to three billion pounds per year. Now that’s what I call some pretty big business. With all that business to be had, it pays to know a thing or two about recent market history. Also, it wouldn’t hurt to fine tune your crystal ball on the future direction of those markets. With the help of the 2019 Produce Almanac, we are going to try to shed some light on the subject of future strawberry markets. We are going to dig into the last five years of strawberry data and, hopefully, what we learn about the past will help us predict the future.


Depending on where you live in North America, strawberry supplies could be coming from either the east or west coast during February and March, by April however most will be coming from the west. Although sometimes it seems like a butterfly fluttering its wings in Florida can create a tidal wave of strawberries in California rendering the two regions perpetually connected, we will look at each supply source separately, beginning with Florida.

On the surface, each year seems similar. Florida strawberries start the month of February expensive, drop throughout the month, and then level off in March. The first graph shows the average cost during weeks 6 through 12 for the last five years. Looks straightforward, doesn’t it? In reality, it is a little more chaotic than this. Each year brings with it its own level of mayhem.

The next chart details the ups and downs over weeks 6 through 13 for each of the last five years.

What is quite apparent are the seasonal ups and downs. During every new season the cost peaks and then comes back down towards the end of the season. Perhaps not so apparent is the oh-so-gentle slope upward as each year tends to bring slightly higher costs. If you look at this chart without the data, and look just at the slope, a very interesting thing appears: The slope in a chart is a straight-line representation of the general tendency of the numbers in the set. This slope displays a very telling story of a commodity increasing in cost over time.


Okay, so Florida strawberry costs go up over time. Big deal, right? Well, I for one have been taught throughout my years that the only certainty in life is death and taxes. Maybe now I can add Florida strawberry inflation to those certainties. And at a compounded annual growth rate of 15.83 percent, I kind of wish I had invested in Florida's strawberry future. No sense in crying over spilt milk, though! And besides, perhaps the next best thing is knowing what the future holds for Florida strawberries. By applying the slope equation to the historical data and correcting for variability during the season we can predict the general costing of Florida strawberries for 2019. Better put on your seatbelt, this is where things can get a little messy. Remember that thing about a butterfly fluttering its wings? Well, fluttering butterflies could happen anywhere in the world, substantially changing these predictions. Nevertheless, here goes nothing.

This prediction has costs opening at over $20 in February, then dropping to just over $14 for weeks 9 and 10, before moving back up to finish the season. This is good information to know, just remember to use at your own risk. Otherwise, happy planning!

Pretty thought-provoking, now how about West Coast strawberries? These strawberries, grown in Oxnard, California, or in Mexico, crossing into Southern California, are available past April. But, for sanity’s sake, we will look at the period from February to April to see what sort of predictions we can make.

Interestingly, the western program looks quite like Florida. The West starts a little higher and drops a little slower, but generally speaking costs are very similar. I'd say that is interesting but not surprising. After all, the growing regions do compete with one another and as mentioned earlier, they are perpetually connected.

If we take a quick look at the weekly cost chart for west region strawberries, things start to get interesting (if you’ve gotten this far in the article, then I feel comfortable suggesting that you will find this interesting).

The seasonal spikes and troughs are still there, but no gently upward sloping trend. It looks like western strawberries have not experienced the inevitability of inflation like we saw in Florida. But, just to be sure, let’s take a look at the slope without the data, just like we did with Florida strawberries.


As it turns out, there is a slight upward slope, but nothing as dramatic as what we saw in Florida. Remember how we were wishing we bought Florida strawberry futures in 2014? For this investment we would have enjoyed an average compounded growth rate of nearly 16 percent. Well for west coast strawberries the equivalent number is 3.43 percent, not quite worth the call to your investment advisor. What does all this mean for the future cost of West Coast strawberries? I would not want to bet against a streak, so probably a whole lot like what we’ve seen over the last five years.

In 2019, we can expect to see high costs of around $22 for the beginning of February. Costs will drop during the month before levelling out at the beginning of March. March and April will bring stable costing hovering between $12 and $14.

There you have it: February, March and April strawberries in a nut shell. The answers are all right there in the data. All this data and other fascinating tidbits of information can be found in the 2019 Produce Almanac. Just remember to use these predictions in conjunction with all other forms of intelligence at your disposal. You never know where a fluttering butterfly may be lurking.

 


Mike Mauti is the Managing Partner and Senior Vice President of Execulytics, a consulting firm catering to produce suppliers and independent retailers. With over two decades navigating the Canadian retail scene as a buyer, merchant, and operator, he certainly qualifies as an expert. And with much of that time spent in produce, he has the goods to deliver on his promise to bridge the gap between growers and retailers. Check out www.execulytics.ca to learn more about the company’s signature products: The Produce Almanac, The Retail 101 Seminar and Canadian Intelligence Services.