Skip to main content

Strawberries in Charts - Expected shortage during the California season, why aren't last two months of high prices a model?

As we come out of the winter months and spring starts to creep into our lives, strawberry volumes are begin to hit the market as the season ramps up. On the heels of particularly high prices over the the last couple of months, this ramp up has most been noticed by massive volumes from Florida which have brought prices rushing down over the last two weeks. In light of this dramatic scene I want to look at what the market data can explain about the high prices we just saw and what that might have to say about the upcoming California Season.

Strawberries, Non Organic, Prices and Volumes

(Source: USDA Market News via Agronometrics)
[Agronometrics users can view this chart with live updates here]

Because of deficits from Southern California and Florida, this seasons volumes have been consistently lower than last. Right up until Florida started sending good amounts of fruit which matches up very closely with the fall in price.

Strawberry, Non-Organic, Volumes

(Source: USDA Market News via Agronometrics)
[Agronometrics users can view this chart with live updates here]

We can see that prices this seasons are matching up pretty well with trend, rising above last year's prices somewhat proportionally to the difference in volumes between last season and this season. Likewise, as volumes have begun to look more and more like the 2015-16 season, the market has begun to echo the prices and movements that we saw three years ago.

Strawberry, Non-Organic, Prices per Kilo

(Source: USDA Market News via Agronometrics)
[Agronometrics users can view this chart with live updates here]

Going forward everything will depend on how California's season comes along. Where last year both the South and Central producing areas came on late, the bulk of their volume got concentrated later than usual, sending monstrous volumes from week 18 to week 25. According to a research paper published by RaboBank (Price Signals at Work in the Strawberry Market - Outlook 2019) the low prices fell below break even pricing contributing reductions in planted acreage “which is currently estimated to be at its lowest level in over a decade.” If we compare Central California's volumes last year to 2010 that would represent a 36% reduction in volume, meaning, that prices would definitely increase, by how much is a much more complicated questions though.

Theory says that for a perfect commodity, a percentage change in price is inversely proportional to the same percentage change in volume. In my experience, strawberries abide by this theory within their respective periods of commercialization which ties up pretty closely with weeks. The rule isn’t perfect when we look at this data, because of inventories and other commercialization channels that aren’t spot, but in general it is a good indicator of what’s going on. This also means that when volumes are low, a small change in volume can represents a large percentage and we see that in the prices. Likewise, when volumes are high, even big changes of millions of kilos might not represent that much of a percentage, which is then reflected in pricing. With a third of the volume out of the market, that represents a substantial increase, however, everything is relative, so if the california season comes in 36% under last years volume, keep in mind that a 36% increase on last year's price for week 24, the lowest price of the year, comes to $7.82, the difference is the massive volumes being moved.

Strawberry, Non-Organic, Volumes from Central California

(Source: USDA Market News via Agronometrics)
[Agronometrics users can view this chart with live updates here]

As a useful tool for readers to gauge how the markets are currently evolving, we offer weekly pricing by fruit size.

Strawberries, Non-Organic, Prices by Size

(Source: USDA Market News via Agronometrics)
[Agronometrics users can view this chart with live updates here]

Strawberries, Non-Organic, Prices by Size (Week 9)

Sizes Price Reported
Average $11.03
sml-med $9.60
med $11.75

Written by: Colin Fain
Original published in on March 05, 2019 (Link)


Popular posts from this blog

Apples in Charts: Honeycrisp, the queen of the U.S. market

Apples are a high-volume fruit commodity which growers need to produce very efficiently in order to be profitable, and the U.S. is no exception to this rule.

Apples from numerous origins are sold in the U.S. market, which is supplied principally by fruit from Washington State, as can be seen in the chart below.

Average historic arrival volumes of apples in the U.S. market, by origin

Source: USDA Market News via Agronometrics. (Agronometrics users can
view this chart with live updates here)
Average historic apple prices in the U.S. market have oscillated between around US$1.00 and US$1.75 per kilo over the last decade.

Historic weekly prices (USD/KG) of apples in the U.S. market

(Source: USDA Market News via Agronometrics. (Agronometrics users can
view this chart with live updates here)
But in the panorama of apples in the U.S., there is one variety that has stood out from the others – Honeycrisp. This queen of the U.S. apple market has great growth potential and excellent prospects…

Fruit in Charts: The winners and losers of 2018 (Part 3 of 3)

This article is the culmination of two previous posts that explored which commodities grew the most and the least through prices and volumes in both 2018 and over the last eight years. You can catch up on those previous articles with the following links:
The Winners and Losers of 2018 (Part 1 of 3)
The Winners and Losers of 2018 (Part 2 of 3)

In the process of writing the previous two articles, we saw that many of the commodities that had the highest prices also had the lowest volumes, and vice-versa. This begs the question, where are the best opportunities in this industry, where is growth and how do we define it? So in this article we will look at creating an index that combines the two factors and see if it can shed some light on this.

One of the most contentious commodities of 2018 was avocados, which saw the biggest drop in average yearly price compared with all other commodities we track. Avocados also saw one of the largest increases in volume of any commodity that we track. In …

Fruit in Charts: The winners and losers of 2018 (Part 2 of 3)

Here is part two of three looking at the winners and losers of 2018. The previous article was based on pricing information made available by the USDA market data, and here we will look at the volume data.

The USDA’s volume data is one of the most complete representations of a market available everywhere – not only considering imports to the U.S., but national production to a large extent as well. In 2018 we also saw a big improvement to the data set, which now offers more complete information for several commodities (mostly citrus), which used to only partially include U.S. production. Average Yearly Volumes by Commodity (Source: USDA Market News via Agronometrics)
[Agronometrics users can view this chart with live updates here
In the table below we can see the ranking of commodities by percentage of growth, which offers some good insights when considering the commercialization of the fruit the data set is trying to represent. By far the biggest increase in volume is for lemons and or…