FCC Outlook: Profits limited due to berry oversupply
Supply-side factors will drive the profitability stories for cranberries, blueberries and maple syrup, the three Canadian horticulture sectors Farm Credit Canada (FCC) focus on in 2019. FCC expects Canadian cranberry profitability to be near break-even in 2019. Policy changes in the U.S. are expected to help support producer prices and improve the sector’s outlook from 2018.
However, large inventories, unresolved trade tensions, and changes to payment arrangements will limit those price gains for Canadian producers. Canadian blueberry profitability is also expected to improve in 2019 as declining inventories lead to improved farm-gate prices. Canadian maple syrup profitability is forecasted to remain strong this year as domestic and foreign demand remain robust.
Cranberries – Cranberry prices have struggled for several years with oversupply, which will continue to define the cranberry market in 2019. U.S. production increased three per cent in 2018 while preliminary reports suggest Canadian production grew by more than 50 per cent – and perhaps as much as 70 per cent.
Blueberries – High storage levels, low prices and tight profit margins have most recently characterized the blueberry sector. But Canadian profitability should improve this year. Declining inventories are expected to lead to improved farm-gate prices as global demand continues to grow. Excellent growing conditions throughout the Pacific Northwest are estimated to have produced a record-setting crop in 2018. British Columbia’s production is estimated to have increased 15 per cent. That won’t be enough to offset declining North American blueberry inventories. Weather and production issues challenged the North American 2018 growing season.
For the full economic outlook on the Canadian horticulture industry from FCC, CLICK HERE.