Pacific Northwest pear processors are raising grower prices this season in hopes of sourcing more Bartlett pears for the processed market. Canned pear products, at their lowest inventory in years, are in jeopardy of losing market from increased imported product, says a canned pear promoter.
Bartlett pears are in a familiar supply-and-demand dilemma. Short supply means high prices, which is good for growers. But high prices allow cheaper, imported product to gain a foothold in the market.
“Some foodservice distributors have said
they don’t want to promote product that is
in short supply.”
Northwest Bartlett pear growers sent nearly 115,000 tons to processors in 2013, the lowest number in a decade, Jay Grandy reported at the Washington–Oregon Canned Pear Association’s annual meeting in late February in Yakima, Washington.
“That’s one of the lowest production numbers going to the processors in many years and has resulted in canned inventory that’s also one of the lowest in years,” said Grandy, manager of the association. Just seven years ago, more than 152,000 tons of Northwest Bartlett pears were processed. Canned inventories are so low that there’s been no carryover in the last few years.
The low processed volume is a result of Northwest growers sending more pears to the fresh market. In 2013, fresh–market Bartletts reached a new high for the decade of about 107,000 tons. In 2004, around 73,000 tons went to the fresh market, according to Grandy.
The switch to fresh has occurred throughout Washington in the Wenatchee and Yakima areas as well as in Oregon’s Hood River.
All three Northwest processors (Del Monte, Seneca, and Northwest Packing) are voluntarily increasing grower contract prices in 2014 to $300 per ton for No. 1 grade, up from the bargaining association’s contracted price of $272 in 2013. Grower prices haven’t been that high for a decade, Grandy said.
“Processors want more pears,” he said. “They need more Bartletts for their processing plants to keep overhead costs down.”
That’s good news for growers, he says, but it opens the door for imported Chinese pear products. “The negative side of a smaller crop and higher prices is that it gives imports a chance to fill the market gap.”
Imported pear products from China grew to 1.5 -million case equivalents in 2013, up from around 1.1 to 1.2 million cases two years earlier, Grandy reported. The biggest increase of Chinese pear products has been in the foodservice segment.
Foodservice is the biggest market for canned pears and represents about 70 percent of the market, according to Mark Miller, promotion director for the Pacific Northwest Canned Pear Service.
Miller and an associate in Illinois cover the United States foodservice market, focusing on foodservice distributors and operators in places like schools, healthcare, colleges and universities, and on-site company cafeterias. They provide distributors with usage tips and ideas, conduct distributor sales contests, promote sales, develop new recipes and markets, and educate distributors about the industry. Examples of two new recipes using canned pears that came out of a contest are pear kale smoothie and pear quinoa salad.
One of the biggest customers of canned pears is the U.S. Department of Agriculture. The agency purchases more than 10 percent of the total pack for school lunches. Last year, USDA purchased around 1.2 million cases (6/10 can size).
Miller believes that USDA purchases will increase in the coming year in response to the Healthy Hunger-Free Kids Act, legislation passed in 2010 that requires schools to double fruit and vegetable servings. As part of the new law, breakfast menus are being overhauled and will soon change the use of fruit juices by counting only whole fruit as a serving and not fruit juices.
“USDA buys what the schools ask them to buy,” Miller said, adding that the agency anticipated a 25 percent increase in pear orders last year but were overwhelmed with actual requests 40 percent higher than the previous year. “They were able to only fulfill 12 percent of the increased requests.”
He is beginning to see the impact of imported pear products. “The foodservice market is not being flooded with imports, but inexpensive imported products are gaining with low-margin operators in places like jails,” he said. Schools are not supposed to purchase imported product if there are domestic supplies, he said, but distributors don’t always follow the rules.
Quality is very inconsistent with imported canned pears, Miller noted.
“Some foodservice distributors have said they don’t want to promote product that is in short supply,” he said to the growers attending the pear association meeting. “There’s been a decrease in bearing acreage of peaches, pears, and apricots and poor domestic crops the last two years, as well as smaller worldwide supplies of canned fruits. Peaches are currently in short supply.”
In short, he says the industry needs more domestic canned pears or he fears some foodservice operators will remove pears from their menus. •