The Pacific Northwest canned pear industry is in a good position now, based on inventory, pricing, demand, and import trends.
The positive outlook for the coming season follows a year that brought significant changes to the Northwest processed pear industry, said Jay Grandy, manager of the Washington-Oregon Canning Pear Association. Grandy gave a report on the state of the canned pear industry during the association’s annual meeting in mid-February in Yakima, Washington.
In the past year, processing facilities closed and changed hands. The Canning Pear Association, created in the mid-1950s, is a voluntary organization charged with negotiating prices for Northwest Bartlett pear growers with processors. At one time, the bargaining association worked with more than a dozen processors. Today, there are just three canners in the Northwest and two in California.
The processing assets of the grower cooperative Snokist Growers of Yakima, Washington, were sold through bankruptcy court last May to Del Monte Foods and Pacific Coast Producers. Del Monte already had a pear processing plant in Yakima, so the purchase eliminated a buyer of Northwest pears and a canning facility. Later in the year, Truitt Brothers, Inc., closed its canning pear operation in Salem, Oregon, further consolidating the pear processing industry.
Just a month ago, Seneca Foods Corporation, one of the world’s leading producers of canned vegetables, purchased Independent Foods, LLC, of Sunnyside, the last locally owned pear, apple, and cherry processor in Yakima Valley. Seneca acquired Signature Fruit Company of Modesto, California, in 2006, to pack peaches, pears, apricots, and fruit cocktail.
More than 128,300 tons of Bartlett pears were processed in the Northwest last year, down from nearly 139,400 tons in 2011, Grandy reported. Northwest Bartlett processed tonnage has declined in recent years. The 2012 volume was about 30,000 tons less than the 158,000 tons of pears handled by Northwest processors in 2006.
The Northwest total includes California pears processed in the Northwest. Last year, only 2,300 tons from California were processed in the Northwest, but in the last five years, as much as 17,000 tons have come north. Statistics on 2012 pear tonnage processed by California canners were unavailable.
Prices for canned pears sold to the U.S. Department of Agriculture have been slowly climbing over the last few years, Grandy said. USDA bid prices for #10 size containers were above $27 per case in 2012.
“The USDA is an important buyer of canned pears and purchases for school lunch and other programs,” said Grandy. “USDA buys around 1 million cases each year, representing about 10 to 15 percent of the total pear pack annually.” He noted that published USDA bid prices are more accurate than prices reported by processors because USDA prices don’t include discounting and other price differentials.
Another positive trend was that canned pear inventory reported by the processors for the end of 2012 was below previous years, Grandy said. Inventories reported are used internally by the association and numbers are not publicly released.
“The canned pear industry is in a good position,” he said. “Sales are happening, the pack is down, and inventory is moving. Inventory is in a much more favorable position than in past years, and it’s been staying in a good position.”
Recent import trends of canned pears are more favorable to U.S. pear producers than five years ago.
“Importation of canned pears has stabilized in recent years,” Grandy said. Canned pear imports began in 2000 and reached a peak of about 2 million case equivalents from 2006 to 2008. Since then, imports have stayed around 1.2 to 1.5 million cases.
China is the biggest canned pear exporter, responsible for shipping 1.1 to 1.2 million cases to the United States, according to Grandy. Other canned pear exporting countries include Thailand, South Africa, and Australia.
Since 2010, imports of small containers have flattened and the large-container volume has also dropped as prices for imports have gone up. “Overall, imports are not as big a threat as they once were,” he said.
Quality and grower returns were good for fresh market Bartlett pears in 2012, which resulted in about 12,000 more tons of Bartletts going to the fresh market than the previous year.
The association negotiated new prices last spring with Del Monte and Northwest Packing that will be effective through 2014. Grandy is hopeful that Seneca Foods will also agree to the negotiated prices. The price for #1 grade in 2012 was $260 per ton. It will increase to $266 per ton in 2013 and $272 in 2014.