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Blackberries in Charts: Will Mexico turn around its diminishing returns?


This week I am covering blackberries from Mexico, the U.S. market’s largest supplier. This article follows on from an article I wrote back in week 27, which you can see here: Blackberries in Charts: Strategic growth leads to more stable pricing.

With 75% of the market in the 2017-2018 season – a number that has not budged since 2010-2011 – it’s hard to argue that Mexico isn’t the king of blackberries.

US Blackberry Movements by Origin 
(Source: USDA Market News via Agronometrics)

Reaching above-average pricing right at the beginning of the season, Mexico has been able to hold relatively steady and attractive pricing throughout its campaign. However, as a general sign that fruit production is outstripping demand, the weighted average price has dropped every single season year since 2010-2011, save one. This trend has brought the price down from a yearly average of US$13.00 per box to US$9.26 last year, the lowest observed yet.

Blackberry Historic Monthly Shipping Point Prices for Mexico
(Source: USDA Market News via Agronometrics)

Given the steady trends we see there are only two ways for Mexican producers to continue to see the same rate of growth they have been enjoying for so long. The first is pretty traditional – increasing the efficiency of production. There are a million ways of doing that, but the bottom line is the same: produce more fruit for less money in order to maintain profit margins.

The other is a much more daring and bold idea, which few other categories have really exploited to its potential. As I step up onto my tiny little pedestal, my call to action would be to create demand by investing in marketing. Fortunately, we see Driscoll’s starting to go in the right direction. However, I feel like much more could be done. My go-to example is avocados, where producers have come together investing millions of dollars in ads, creating a level of awareness that was hitherto unknown. As a result, avocados have seen a growth rate in the last eight years that I would have not thought possible.

I’ll leave you guys with a final chart of Mexico’s historic volumes, just because I think it’s pretty and gives a great picture of the country’s seasonality.

Blackberry Historic Monthly Movements from Mexico
(Source: USDA Market News via Agronometrics)
 
Written by: Colin Fain
Original published in FreshFruitPortal.com on September 25, 2018 (Link)

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