Berries set to bounce back

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Strong price growth expected for berries, according to a recent ANZ agri-commodity report

Berries set to bounce back
Flooding and supply chain issues have driven the growth in berry prices

 

While the price of berries on supermarket shelves is currently high, the long-term outlook for the industry could see supplies grow strongly, according to ANZ’s latest agri commodity report.

The Australian berry industry has gone through a period of significant growth in recent years, with production growing strongly to over a billion dollars in farmgate value in 2019–20.

"While exports have shown solid growth, domestic consumption remains the primary market with over 95 per cent of market share," ANZ director of food, beverage and agribusiness insights Madeleine Swan says.

"Growth in production has seen berries become more readily available on supermarket shelves, however it has also had the longer-term impact of pushing prices lower as supply catches up with demand," Swan says.

With new production capacity of around 12 per cent of total current production expected to bear fruit in coming years, the development of new market access opportunities remains crucial to the berry industry’s value proposition.

Growth of an average of nine per cent per year over the past 10 years has seen Australian berry production almost double in that time – and making it one of the highest value horticulture sectors in the country.

Production is spread up and down the eastern seaboard with raspberries focused down south and strawberries and blueberries up north, making it a large and diverse market. There are, however, a number of challenges and trends that are common to all berry species.

Supermarket shelves are notably full of an increased supply of Australian berries in recent years, with around 75 per cent of Australian consumers buying fresh berries – and most buying multiple.

"On average, the Australian consumer buys almost 4kg of berries each year," Swan says.

"As a result of the increased domestic demand, prices have begun to moderate slightly with both strawberry and blueberry prices showing less seasonal volatility.

"Having said that, recent flood and international supply chain delays have contributed to an increase in food prices across the board – including berries – with the recent floods in Queensland and New South Wales impacting blueberry production and forcing prices higher.

"Labour shortage issues throughout Covid lockdowns has also put upward pressure on the cost of production as growers struggle to attract and retain skilled labour.

"However, the clear macro-trend in the Australian berry industry is one of increasing supply and increasing investment in production capacity putting downward pressure on prices."

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