Pear export prospects
A large crop could mean more fruit in the smaller sizes that export markets prefer.
A family samples USA pears in a supermarket in the city of Dubai. The United Arab Emirates is a significant market for USA Pears.
Jeff Correa, Pear Bureau Northwest
The Pear Bureau is looking forward to marketing one of the industry's largest pear crops for the 2009-2010 season. With warm summer weather and ideal growing conditions, the Pacific Northwest pear crop is expected to be larger than the original estimate of 19.1 million boxes compiled in late May. With the larger crop, the Pear Bureau is also expecting a greater percentage of smaller pears (sizes 110 to 135), which is the preferred size range for many export markets. According to Global Trade Atlas data this past season through May, Northwest pear growers shipped 6.27 million 44-pound standard box equivalents worth approximately $131 million.
This upcoming season will have some unique challenges and opportunities. The biggest challenge facing Northwest pear exports next season is the 20 percent tariff Mexico placed on pears in retaliation for the United States ending the Pilot Trucking Program for Mexican trucks. While exports have only been slightly down from mid-March to July, due in part to a sharp reduction of Argentine pear exports to Mexico, as long as the 20 percent tariff remains in effect it will continue to dampen the export volume to the industry's largest export market.
The worldwide economy is expected to contract by 2.3 percent in 2009 due to the economic recession, which may have a dampening effect on consumer purchase decisions. The relative strength or weakness of the U.S. dollar is another important factor that will impact Northwest pear exports. The U.S. dollar has strengthened by 10 to 35 percent against the currencies of the major pear export markets in the past year. However, on the positive side, the dollar has weakened since early March and has been relatively stable for the past couple of months, which is good news for importers and exporters. A stable exchange rate means the markets have adjusted to the new relative price and importers have more confidence to plan their season's orders.
Despite the worldwide economic recession, people still have to eat, and a silver lining is that the recession has caused more households to eat more at home, which has helped increase supermarket sales. To help drive pear sales, the Pear Bureau will be promoting more of a value-for-money message, promoting pears as a healthy, nutritious, and great-tasting snack. The downturn in the economy has forced many companies to reduce their marketing budgets and cut back on their promotions with retailers. However, with full Market Access Program (MAP) funding of nearly $3 million dollars, the Pear Bureau is planning to be very aggressive in its promotional program with a lot of up-front promotions to get the season off to a good start. With a large crop, a strong September to January period is crucial to having another successful and profitable year for the pear growers.
The key export markets for the Northwest pear growers this season will be Mexico, India, Russia, and Brazil. Despite the 20 percent tariff in Mexico, export volumes to that country should surpass 2.6 million boxes. India is one of the industry's best growth markets, and this season, the export volumes should see a sharp increase. India, which hasn't been as negatively impacted by the economic recession as other markets, is poised for a big jump in volume. The Pear Bureau is expecting the volumes to surpass 135,000 boxes, which would be about a 50 percent increase over the previous high. Russia and Brazil may see smaller levels of growth as there are still new areas of growth in each market. In Brazil, the southern and northeastern states are still new areas for Northwest pears. In Russia, there are still growth opportunities in the western and interior regions.
The Pear Bureau is also expecting to see more positive benefits from the recently signed Free Trade Agreements with the Central American countries and with Peru. The Central American Free Trade Agreement has been in effect for three seasons for most of the countries, and there has been an increase in the volume and an extension of the market window for Northwest pears as a direct result. The Peruvian Free Trade Agreement should also have a similar effect with the pear exports to that market. While it is a small export market for the industry, it is still a good outlet for Fancy grade and third grade pears.
The Pear Bureau will be conducting promotional programs in 38 markets this upcoming season. A team of 18 international marketing representatives will be responsible for implementing the promotional programs, maintaining contact with the trade, and reporting back to the industry on market updates. For most export markets, the promotional program will consist of in-store sampling promotions, point-of-sale material support, trade merchandising, and trade education. In the larger markets, like Mexico, Russia, and Brazil, the Pear Bureau will be conducting a well-rounded program that includes consumer advertising, public relations programs, foodservice activities, and importer incentive contests. The main consumer targets of the promotional activities are women aged 24 to 48 with children. A secondary target is school-age children, who are major influencers on household purchase decisions.
The Pear Bureau is also the lead on two joint activities that are funded under the MAP's Global Based Initiatives program. The Pear Bureau received $500,000 to conduct the U.S. Fresh Fruit Road Show in Mexico and to conduct the U.S. Fresh Fruit Showcase in Asia. The Road Show, which is entering its fourth and final year with GBI support, is a joint activity with the Washington Apple Commission, Northwest Cherry Growers, and six other fresh fruit commodity groups. The U.S. Fresh Fruit Showcase is a new activity that will include mall events and in-store video for U.S. fresh fruit in Indonesia and India for the upcoming season. Most of the same participants in the Road Show are also participating in the Fresh Fruit Showcase.