SOURCE: Rabobank, N.A.

Rabobank, N.A.

July 21, 2015 13:51 ET

Berry Demand Is Strong but Growers Not on Easy Street

Grower Profits Under Pressure as Increasing Demand Fails to Keep Pace With Higher Costs and Production Constraints, Says Rabobank Report

FRESNO, CA--(Marketwired - July 21, 2015) - Demand for fresh berries continues to be strong, representing approximately 19 percent of annual fresh fruit spending in US retail stores. Despite this fact, rising production costs and resource constraints are compressing domestic producer profits, and complicating the role/impact of berry imports. These topics are examined in a report titled "US Berries - Increasing Consumption is Not a Silver Bullet" that was released this week by Rabobank's Food & Agribusiness Research (FAR) and Advisory Group.

Increasing costs of labor, land, and water -- especially in California -- are major challenges to profitability, according to the report's author, Roland Fumasi, vice president and senior analyst with FAR. "One of the biggest contributors to the ongoing growth of fresh berry consumption is its year-round availability," says Fumasi. "That said, the premier growing regions in California are also high-value land areas where weather is good and urban encroachment is always occurring." This in addition to increases in regulatory constraints, water challenges, and rising labor costs, have limited producer profitability.

Also examined in the report are how domestic production challenges and increasing demand are impacting the role of imports, and how imports continue to influence domestic production. Imports have been instrumental in allowing for year-round berry availability, which has positively impacted demand. However, increasing availability of imports also brings challenges for some US growing regions; particularly Florida, and Southern California. Increasing US demand for strawberries, raspberries, and blackberries will likely be satisfied by increased imports, not expansion of domestic production. However, the versatility of blueberries continues to allow for production expansion within the US.

The report examines other specific factors impacting strawberries, blueberries, raspberries, and blackberries. It also highlights the ongoing opportunities and challenges in the organic berry space.

The full report is available exclusively to clients of Rabobank and to media upon request.

About Rabobank, N.A.
Rabobank, N.A. is a California community bank and a leading provider of agricultural financing and full-service banking products to California consumers, businesses and the agriculture industry. With more than 100 retail branches, we serve the needs of communities from Redding to the Imperial Valley through a regional structure that promotes local decision-making and active community involvement by our employees.

Rabobank, N.A. is a division of the Rabobank Group, the premier lender to the global food and agricultural industry and a financial services leader providing commercial, retail and agricultural finance solutions in 48 countries around the world. From its century-old roots in the Netherlands, Rabobank has grown into one of the world's largest and safest banks. Rabobank, N.A. is a Member FDIC and Equal Housing Lender. www.rabobankamerica.com

About Rabo AgriFinance
As a leading financial services provider for agricultural producers and agribusinesses in the United States, Rabo AgriFinance adds value using industry expertise, client-focused solutions, and by creating long-term business relationships. Rabo AgriFinance offers a comprehensive portfolio of services that give producers the right products to prepare for, and take advantage of, market opportunities. Rabo AgriFinance representatives offer a wide array of financial services and knowledge to help customers realize their ambitions. This comprehensive suite of services includes loans, insurance, middle market agribusiness, input finance and sophisticated risk management products. Rabo AgriFinance is a division of Rabobank, the premier bank to the global agriculture industry and one of the world's largest and safest banks.

About Rabobank Food & Agribusiness Research and Advisory (FAR)
The Rabobank Food & Agribusiness Research and Advisory (FAR) group is a global team of more than 80 analysts who monitor and evaluate global market events that affect agriculture worldwide. This international team works to collect key insights into commodity markets; conduct in-depth analysis of the factors that drive sector success (or failure); and examine the megatrends that ultimately influence clients' business strategy. These analysts are internationally respected experts in sectors from protein to produce, inputs to oilseeds, and their knowledge is shared with Rabobank customers.

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