Survey: Produce Industry Feeling the Pinch From Extreme Weather and Input Costs
October 16, 2023 Ag tech company ProducePay has released findings of an industrywide survey that explored business stability for produce stakeholders, including growers, packers, distributors, integrated suppliers, and end buyers in the U.S. and Latin America. As the International Fresh Produce Association’s (IFPA) annual Global Produce and Floral Show is set to kick off this week, these results spotlight the many challenges – cost of inputs, commodity pricing volatility, weather unpredictability, and more – that demonstrate an urgent need to improve predictability for a more efficient, resilient, and sustainable produce supply chain.
With growers, producers, and packers comprising a majority of survey respondents (55%), the data underscores how increasing volatility and unpredictability limit the fresh produce sector as a vital industry for feeding a growing global population sustainably.
The remaining survey respondents were comprised of 20% integrated suppliers, 7% end customer buyers/retailers/foodservice operators, and 18% other.
Highlights from the survey include:
● Commodity pricing volatility: Commodity pricing volatility, a top concern revealed by last year’s survey results, affects the greatest proportion of respondents (83%).
● Business stability: A majority of growers (52%), and 30% of respondents overall, rated the stability of their current business climate less positive (5 or lower, on a scale of 1-10), compared to last year.
● Business impact: More than half of respondents rated the following concerns as “extremely significant” in impacting their business negatively: cost of inputs (55%), ability to grow and deliver quality produce (53%), commodity pricing volatility (52%), weather unpredictability (52%), and reaching fair pricing terms (50%).
● Worsening challenges: These issues were rated worse this year compared to last year: weather unpredictability (54%), cost of inputs (53%), cost or access to labor (46%), commodity pricing volatility (44%), and cost or access to capital (40%).
● Concerns about the future: More respondents expect all these challenges to get even worse in the next five years, compared to those who expect things to improve.
● Produce waste: 60% of respondents estimate that greater than 10% of their produce is wasted, degraded or damaged due to supply chain inefficiencies.
“The fresh produce industry is critical to feeding a growing world with sustainable and healthy food, and an economic engine for many rural communities across the globe,” says Patrick McCullough, ProducePay CEO. “Given the importance of this industry, it’s essential that we support the entire vertical – from grower to retailer – by eliminating the volatility and unpredictability that limits economic growth and investments in sustainable practices, and that results in inefficient forms of waste throughout the supply chain. This requires developing tools and new ways of doing business that give growers and buyers greater control of their business by providing unprecedented access to each other, capital, trading, insights, and greater supply chain visibility.”
Earlier this year, ProducePay collaborated with one of the world’s largest growers and distributors of table grapes, Four Star Fruit, to launch a first-of-its kind, direct-to-retail program that enables a stable supply of high-quality produce to consumers while driving financial sustainability and fostering investments in sustainable agricultural practices. When Hurricane Hillary damaged nearly 25 million boxes of California table grapes – a recent example of the devastating impact of weather unpredictability – Four Star Fruit and ProducePay took proactive steps to secure table grape supplies from Peru and Chile to bridge the supply gap.
For more information, click here.
Subscribe Today For
