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Sweet Cherry Outlook 2009 and Beyond

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  1. Sweet Cherry Outlook2009 and Beyond Desmond O’Rourke Belrose, Inc.

  2. Topics for Today Sweet Cherry Trends: • World • United States • Pacific Northwest • Canada • Prospects for 2009 • Long-term outlook

  3. World: Sweet Cherry Area Harvested1990-2007

  4. World: Sweet Cherry Production1990-2007

  5. Why Prices Held Firm Despite Increased World Production • Average yields grew little. • Per capita supplies remained flat, unlike for apples, pears and many other fruits. • Sweet cherries lost favor with many European growers for a decade leaving an opening for other exporters. • However, sweet cherry production rose in the Middle East (e.g. Turkey and Iran).

  6. Sweet Cherry Production to Expand • World production could rise one third by 2015. • U.S. production could rise as fast. • Production will outpace population growth. • Marketing challenges ahead.

  7. U.S.: Sweet Cherry Area Harvested1990-2007

  8. U.S: Sweet Cherry Production1990-2007

  9. Canada: Sweet Cherry Area Harvested and Production, 1990-2007

  10. Mystery of Sluggish Yields

  11. U.S.: Acreage Non-bearing, by Variety, Jan 1, 2006

  12. PNW: Fresh Sweet Cherry Shipments(1,000 20# box equivalents)

  13. PNW: FOB Prices ($/box)

  14. PNW: FOB Prices ($/box)

  15. Trends that Will Continue • Rise in total volume of sweet cherries from California and Pacific Northwest. • Switch away from Bings in Washington and Oregon. • Greater volume of late season sweet cherries. • Shakeout among newer varieties as growers, marketers, consumers and retailers get more experience of each variety.

  16. Link between Canadian and U.S. Grower Prices of Sweet Cherries

  17. Canada: Fresh Sweet Cherry Exports, 2003-07 ($Cdn million)

  18. Canada: Fresh Sweet Cherry Imports, 2003-07 ($Cdn million)

  19. CANADA Exports have grown rapidly. Main markets are U.S. and Taiwan. Growing markets in Hong Kong, SE Asia. Overlap with U.S. export markets. UNITED STATES Exports growing steadily. Canada the top market. Taiwan has replaced Japan as No.1 in Asia. Rapid growth in China/Hong Kong, South Korea, Australia and Western Europe. Exports: Tale of Two Countries

  20. Volume of PNW Late Sales Key

  21. PNW Late Sales and Prices Prices, last week of July: 2006 2007 $/box $/box Bing 28.96 40.39 20 # Rainier 32.28 39.34 15#

  22. Prospects for Sweet Cherries in 2009 Supply Side: Due a larger crop in world, U.S. and PNW. Still too early to tell. Demand Side: Worldwide slump under way. Consumers worldwide are reducing spending, bypassing upscale products, becoming more sensitive to price and promotion specials. Longer bad economic news continues, the more consumer confidence will falter.

  23. U.S.: Monthly Domestic Apple Shipments, 2007 and 2008 Seasons

  24. U.S. Off-season Sweet Cherries:No. of Ads and Ad Prices, 2007 and 2008 Seasons

  25. Keys for BC Sweet Cherry Industry in 2009 • Success of earlier marketers will be critical later in the season. • Retailers will be looking for value packs, in terms of price and quality. They want to be seen as helping stressed customers. • It will be particularly important to run lean, mean production, harvesting, packing and marketing operations.

  26. Longer-term Prospects Favorable • Demand conditions for sweet cherries look favorable compared to apples or pears. • When affluence returns, consumers will again pay premiums for specialty fruits. • Sweet cherry industry has very desirable products to offer. • Needs better coordination of marketing for longer season.

  27. Niche Markets: The Art of Living Dangerously • Serving a late-season niche will always be a high-risk venture. • Extending the season through new varieties, later storage, ocean shipments or other innovations could reduce risk. • However, need careful weighing of added costs versus potential extra revenues.

  28. Thank you for your AttentionGood Luck in 2009 and Beyond