STRAWBERRIES IN THE U.S.

Transcription

1 STRAWBERRIES IN THE U.S. Introduction Strawberries are an important commodity in the United States. According to the United States Department of Agriculture s Economics Research Service, strawberries are the fourth most valuable fruit crop in the United States following grapes, apples, and oranges. Over the past two decades the United States strawberry industry has grown with increasing production, consumption, and larger trade volume. This paper will provide an overview of the United States strawberry industry by giving details about the commodity s history, production, consumption, commercialization, trade, and the effects of free trade agreements, tariffs, and subsidies. History The exact history and naming of the strawberry are unknown because there are few early historical references to the berry. However, it is believed that the Romans and Greeks cultivated the berry in their gardens, used it for medical purposes, and served it in banquets as a delicacy. There are several theories as to how the strawberry received its name. One traces back to A.D. 900 when the Anglo-Saxons called it a hay berry because it ripened at the same time the hay was mown. There is a theory that the name was derived from the nineteenth century practice of placing straw around the growing berry plant to protect the ripening fruit. Yet, the most common explanation for how the strawberry got its name is that children in the nineteenth century threaded the berries into straw and offered them for sale. One of the first recordings of the strawberry traces back to the thirteenth century where a Greek doctor described the berry s use in treating health ailments in his writings. In the fourteenth century cultivation of strawberries was common among royalty. They 1

2 considered the flower to be more useful as an ornament than the berries as a fruit. By the mid sixteenth century the demand for strawberries was increasing in England, as a result it became a common garden plant, ornament, and a table delicacy. Commercial strawberry production in America began in the nineteenth century. In the early part of the century strawberries were grown on the east coast near large cities. As the pioneers traveled west so did the introduction of the strawberry. According to the Oregon Strawberry Commission, strawberries were introduced to the state in 1846 by a pioneer who traveled from Iowa. This pioneer packed extra wagons of with fruit and nut trees and berry plants. By the 1950 s strawberries were produced in many states throughout the United States, although production in California began to flourish due to their advanced and improving cultivation technologies. California strawberry farmers worked closely with scientists at the University of California to research and improve production efficiency. Together they established an industry committed to finding scientific solutions to production problems. New strawberry varieties were created, annual planting systems, high elevation nurseries, wide plant beds, and drip irrigation technology introduced in the 1970 s are examples of innovations that came from this research. By the 1970 s California had a large growing strawberry industry. Production of strawberries in other states could not compete with the quantity of berries California supplied. For example, California farmers were able to produce between twenty and thirty tons per acre compared to the five tons per acre grown by Oregon farmers. Today the production and consumption of strawberries in the United States continues to grow and production is concentrated in California, with Florida and Oregon also contributing to the nation s supply. Production efficiency continuously improves resulting in a growing supply of berries to consumers and increasing awareness of strawberries contributes to the increasing demand and consumption of the berry. 2

3 Production Overview In the United States strawberry production is growing. California is the nation s leading producer producing close to eighty percent of the United States strawberry crop. Florida is the second largest strawberry producing state and supplies approximately fifteen percent of the nation s supply. The third largest commercial strawberry state is Oregon, it provides between two and five percent of the nation s strawberries. Other contributing states include: New York, Michigan, Washington, Louisiana, North Carolina, Ohio, Pennsylvania, Wisconsin, New Jersey, and Arkansas. Strawberries grow in every state in the United States and are specifically bred for the region in which they grow. Strawberries grow best in moisture retaining soil or when irrigated frequently, they have low fertilizer requirements, and the plants are kept for one to four years before being replaced. The quality, flavor, and vitamin content of the berries depend upon the climate where they are grown. The ideal growing climate for strawberries is one where the growing berries are exposed to warm, sunny days and cool nights. In this type of climate the berry s production of sugar and vitamin C are maximized. There are several risks associated with producing strawberries commercially. The weather greatly influences yields; extreme temperate, droughts, and excessive rain increase diseases, and can interfere with pollination, fruit set, and harvest. Additional risks arise from labor, marketing, and transportation. Once the berries ripen they must be picked immediately. A labor shortage or strike can lead to crop loss. Because the berries are very perishable, those intended for the fresh wholesale market must be sold before they are picked to avoid spoilage. Also, a trucking strike or delayed delivery can result in berries rotting before delivery. Proper harvesting of commercial strawberries is crucial in maintaining berry quality. Figure 1. All strawberries are picked, sorted, and packed by hand in the field. The berries do not ripen after picking and should have bright red color, natural shine, and a fresh looking green cap (figure 1). Strawberries that are 3

4 destined for the fresh market are rushed to facilities where they are cooled to about 34 degrees Fahrenheit. Within 24 hours of harvest, the berries are loaded on refrigerated trucks for delivery to local supermarkets across the country. This post-harvest system ensures that the delicate fruit reaches the consumer in good quality and under ideal conditions strawberries will have a shelf life of fourteen days. Strawberries that are produced for processing are gently washed, sorted, and quickly frozen after picking to ensure that their flavor and appearance are retained. Production/Supply Trends Table 1. World Strawberry Production Country short tons United States Spain Japan Korea, Republic of Poland Italy The United States is the world s largest producer and supplier of strawberries (table 1). Strawberries are produced for both the Others World Economic Research Service/USDA fresh market and processing in the United States. However, fresh-market production is larger than the amount of berries produced for processing (table 2). Between 1980 and 2002 the acres of harvested strawberries has increased by more than 10,000 acres, and grower price and the value of strawberries have increased (table 3). 4

5 Table 2. United States Strawberry Production Year Fresh market Processing 1,000 cwt ,821 2, ,375 2, ,896 2, ,854 3, ,482 2, ,541 2, ,348 2, ,804 3, ,555 3, ,616 2, ,636 3, ,682 3, ,997 3, ,108 4, ,477 5, ,456 4, ,126 4, ,018 4, ,338 5, ,064 5, ,346 4, ,611 3, ,922 4,780 cwt = 100 pounds Economic Research Service/USDA 5

6 Table 3: United States Strawberries - acreage, production, season-average grower price, and value Year Acres harvested Production Grower Price Value Acres 1,000 cwt Dollars/cwt 1,000 dollars ,050 7, , ,000 7, , ,250 8, , ,300 8, , ,300 9, , ,050 10, , ,350 10, , ,120 11, , ,150 11, , ,100 11, , ,080 12, , ,080 13, , ,530 13, , ,230 14, , ,830 16, , ,080 16, , ,670 16, , ,260 16, , ,230 16, ,001, ,760 18, ,133, ,650 19, ,045, ,000 16, , ,600 19, ,220,504 Economic Research Service/USDA cwt=100 pounds 6

7 The Three Largest Producing States California California is the nation s leading strawberry producer producing nearly eighty percent of the nation s strawberry output. In California strawberry plants are replaced annually with a nursery crop. Throughout the harvest season strawberry plants continuously produce new fruit, and need to be harvested every three days during the peak of the season. The south and central coast of California is one of the ideal growing environments for strawberry production. The Pacific Ocean provides the region with a moderate year round temperature of warm days and cool foggy nights. California s growing region is between San Diego and the Monterey Bay area. Harvesting of strawberries begins in San Diego and as the season progresses it moves north up to the Monterey Bay area. In San Diego strawberry harvesting begins in June and peaks around April. In the Santa Maria Area, north of Oxnard, strawberries are harvested from March to July, and deliveries to processors continue through August. In the Monterey Bay area, near Salinas and Watsonville, harvest begins in April and continues through November, peaking in May or June. In this region year round production has been achieved. Florida Florida produces about fifteen percent of the nation s strawberries and close to all of the nation s berries grown during the winter months. The value of Florida s strawberry has more than tripled in the last two decades and has an impact of about $200 million in the growing areas. Oregon Oregon produces approximately three percent of the nation s strawberries. Oregon strawberries are known worldwide for their exceptional taste, deep color, and intense sweetness due to Oregon s climate. The climate in Oregon is ideal for growing strawberries; a long mild spring, and an early summer, with a lot of rainfall, warm sunny days, and cool 7

8 nights. Unfortunately the strawberry season in Oregon lasts only three to four weeks in the beginning of summer. Because of this, the berries are difficult to ship long distances, therefore Oregon supplies to a niche market with the majority of the berries produced for processing. Oregon strawberries are costly to produce; therefore they require a greater price in the market to remain viable. However, recently growers have been unable to cover their cost of production due to low strawberry prices. The price of Oregon strawberries is influenced by the price of California strawberries. Furthermore, in Oregon the minimum wage recently increased, as a result the per pound price of picking increased. This hurts many growers and they have been reducing their strawberry acreage. Consumption Table 4. United States Per Capita Consumption Year Consumption Fresh Frozen pounds, farm-weight Economic Research Service/USDA Americans are increasing their consumption of fruits and vegetables. Over the last two decades one of the highest rates of consumption growth of all fruits and vegetable crops has been strawberries. Since 1986 per capita consumption of both fresh and frozen strawberries has grown by more than two pounds (table 4). Fresh strawberry per capita consumption in 2002 was 4.9 pounds compared to 2.9 pounds consumed in Per capita consumption of frozen strawberries increased by slightly more than half a pound between 1986 with 1.1 pounds, and 2002 with 1.7 pounds. 8

9 There are three major factors that contribute to increasing per capita consumption of strawberries: 1. New information on the health benefits of berry consumption 2. The increasing supply of strawberries in the United States 3. The year round availability of strawberries to consumers Other changes in strawberry consumption reflect higher incomes, a renewed interest in diet, health, fitness, and natural foods; an aging population that eats more fruits and vegetables; a growing immigrant and ethnic population whose diets contain more fruits and vegetables; and the success of the industry s 5 to 9-A-Day for Better Health promotional program. Commercialization In the United States strawberries are produced commercially for both fresh consumption and processing. The marketing techniques and distribution methods of strawberries are specialized so that the berries do not spoil before they reach the consumer. All berries are hand picked directly into small baskets and crated for fresh markets or put into trays for processing. Specific trends and changes within the strawberry industry and marking methods include the following: Direct and wholesale marketing Distribution methods and grower prices Strawberry companies improving standards and creating brand loyalty Vertical integration of production Improved advertising and promotions Depending on the destination of strawberries, the marketing of the berries differs. Direct marketing of strawberries is used when berries will be sold directly to consumers through roadside stands, farmers markets, or u-pick operations. Strawberry market potential is better near large populations centers because local rural markets are easily flooded. Selling strawberries in fresh or processing wholesale markets is more demanding than direct local marketing, and is normally only suitable for large producers or grower 9

10 cooperatives. Grading, packaging, storage, and transportation must meet certain standards. Transportation across state or national borders often requires special permits and tariffs. Successful wholesale marketing requires expertise in post harvest refrigeration and distribution. In the United States, California, Florida, Oregon and Washington dominate wholesale export markets for strawberries. Because strawberries are very perishable their distribution process is rapid. Strawberry growers and companies use elaborate and extensive marketing channels, facilities, and equipment for maintaining and enhancing berry quality. For example, California strawberries that are sold in other states are flown to their destination to preserve quality. Even though strawberries are distributed all throughout the United States, peak production periods affect grower price (table 5). Table 5. Monthly Grower Prices Year Jan. Feb. Mar. Apr. May June July Aug. Sep. Oct. Nov. Dec. Dollars/100 pounds ~~~ ~~~ ~~~ ~~~ ~~~ ~~~ = Insufficient marketing to establish price Economic Research Service/USDA Large strawberry companies contribute largely to industry trends and the increase of strawberry consumption. Many companies have specialized infrastructure and/or are vertically integrated so that they are able to keep control over every step of the production and distribution process. Additionally, strawberry companies, like Driscoll s, have their own research and development department that develop and breed patented berry varieties. Strawberry companies strive to set the highest standards within the industry and market their berries to consumers with the intention of developing strong brand loyalty. 10

11 Strawberry advertising and promotional programs successfully increase demand, consumption, and consumer awareness of the health benefits strawberries provide. Increasing strawberry demand and consumption results from the marketing efforts of the United States Department of Agriculture in cooperation with many health institutions and strawberry commissions and grower associations. Because of their advertising and various promotional programs consumers are more knowledgeable of how strawberries can be part of a healthy lifestyle. Strawberries are an easy way to increase fruit consumption and are a healthy snack or versatile ingredient. One serving of eight medium sized strawberries has only fifty calories. Strawberries are a great source of vitamin C, folate, potassium, and fiber. Additionally, leading health association research links diets high in fruits and vegetables to reduced risk of heart disease and various types of cancer. One successful national promotional program that works to increase overall fruit and vegetable consumption is the 5 to 9-A-Day For Better Health program. This program is represented and sponsored by the United States Department of Agriculture and health institutions such as the National Cancer Institute and the American Cancer Society. Other successful strawberry promotional and advertising efforts are from strawberry commissions that represent their regional industry. These commissions, funded by growers, shippers, processors and federal funds, oversee and conduct strawberry research and work to promote strawberries through marketing programs. Through newspapers, magazines, broadcast publicity, and other forms of media they target consumers, retail trade, foodservice operations, and export markets throughout the United States and around the world. Trade The United States imports and exports fresh and processed strawberries depending upon peak growing seasons. Strawberry trade in the United States has been expanding; this reflects the increasing availability of berries due to trade. The majority of imports occur during the winter months when strawberry production is low (table 6). During the low 11

12 production season in the United States imports the majority of its strawberries from Mexico (table 7). Canada and Japan are the main destinations for United States strawberry exports. Table 6. United States Monthly Imports of Fresh-Market Strawberries Imports Jan. Feb. Mar. Apr. May June July Aug. Sep. Oct. Nov. Dec. Annual 1,000 pounds Strawberries ,547 10,441 18,069 22,212 12,011 9,831 2, ,866 2,792 89,898 Strawberries ,583 10,183 14,135 16,988 8,494 5,934 2, ,992 3,464 70,726 Strawberries ,610 10,876 14,941 18,632 10,349 7,893 1, ,361 1,675 76,239 Exports Strawberries ,540 6,323 10,710 21,169 27,609 22,438 16,950 12,854 14,479 12,147 4,350 3, ,890 Strawberries ,371 5,682 10,242 14,662 28,512 16,487 12,829 11,383 9,345 8,913 3,628 3, ,108 Strawberries ,523 6,276 12,475 18,909 25,968 17,029 13,453 14,321 11,223 6,988 2,178 2, ,599 Economic Research Service/USDA Table 7. United States Fresh Strawberry Imports Country Short tons Mexico 10,183 14,051 20,889 28,544 32,446 15,150 27,952 46,519 36,505 34,487 43,797 New Zealand Canada Australia Argentina Others 1,218 1, World 11,901 15,682 27,583 29,415 33,654 15,961 29,073 47,396 38,118 35,364 44,966 Economic Research Service/USDA Effect of the North American Free Trade Agreement The majority of United States strawberry trade occurs in North American and has been affected by the enactment of the North American Free Trade Agreement (NAFTA). Since NAFTA became effective United States strawberry exports to Canada and Mexico 12

13 have increased. Prior to NAFTA strawberries from the United States faced a tariff of 6.61 cents per kilogram and Mexico s tariff was twenty percent on strawberries. United States imports faced a tariff of 0.4 cents per kilogram from June 15 to September 15, and 1.7 per kilogram during the rest of the year. Subsidies The United States government provides large subsidies for grains, oilseeds, and cotton but very little direct subsidy for horticultural crops. However, strawberry growers and producers indirectly receive monetary support form the United States government. Some examples include: Marketing orders o Federal and state governments provide industry benefits that are paid for by both consumers and producers, i.e., California Strawberry Commission. o Federal and state governments have authorized voluntary industry programs that often set minimum quality standards. Research and extension programs and related services o Federal and state governments fund agriculture research programs. A significant amount of this research is devoted to environmental improvement and related broad benefits, rather than productivity growth. Thus, the benefits are widely spread to producers and consumers of various commodities o The government also provides inspection, border protection and related services that limit the spread of exotic agricultural pests and diseases. Irrigation subsidies o Growers and farmers are able to use water at reduced rate, especially in California. 13

14 Conclusion The future outlook for the United States strawberry industry is favorable due to growing production and consumption. However, there are two obstacles that the industry needs to overcome to continue successful production and maintain a positive social image. 1. After January 1, 2005 the United States will no longer be able to use methyl bromide because it is classified as a gas that depletes the ozone. Methyl bromide is a gaseous fumigant used to treat the soil before crop panting and allows growers to use marginal ground for production. 2. There have been class actions lawsuits filed against strawberry growers and worker strikes because of the abuse some strawberry workers/pickers have encountered. The types of abuse include low pay, no compensation for overtime, dirty restrooms, sexual harassment, and discrimination against women. 14

15 Sources Barney, Danny. Davis, Bruce. Fellman, John. Strawberry production: Overview. Alternative agricultural enterprises, University of Idaho. Brunke, Henrich. Commodity Profile with an Emphasis on International Trade: Strawberries. Agricultural Issues Center, University of California. August California Strawberry Commission, Cook, Roberta. Strawberry Production in the United States Department of Agricultural and Resource Economics, UC Davis. June Darrow, G.M. The Strawberry: History, Breeding and Physiology. Driscolls Strawberries, Encyclopedia Britannica, strawberry, Kohls, R.L., and J. N. Uhl. Marketing of Agricultural Products, 9 th Edition. Upper Saddle River, NJ: Prentice Hall, Inc., Market and Trade Economics Division, Economic Research Service, U.S. Department of Agriculture, October 2003, FTS Fruit and Tree Nuts Situation and Outlook Yearbook. Naturipe Berry Growers, Oregon Department of Agriculture. Oregon growers cope with strawberry slump. Oregon Strawberry Commission, Strawberry Situation and Outlook. FAS Online, Horticultural and Tropical Products Division. Sustainable Agriculture Newsletter Spring SAREP sponsors first organic strawberry production short course. 15

16 United State Department of Agriculture, 16

17 STRAWBERRIES IN MEXICO Introduction Mexico s Strawberry industry contributes less than one percent to the country s agriculture sector. However, strawberries are an important part of Mexico s economy. The industry employs a large number of the workers in the processing and freezing facilities and field workers during harvest periods (Perera). When growing and marketing conditions are favorable, strawberries are a highly profitable commodity. However, it is also one of the most expensive and riskiest crops to grow. The purpose of this paper is twofold. Firstly it will provide and overview of the strawberry industry in Mexico, including information about the commodity s history, consumption, production, commercialization and marketing, and trade. Secondly, it will discuss current issue of the elimination and use of methyl bromide and the future of the industry in both countries. History Commercial strawberry production in Mexico dates back to the last part of the 19 th century in the state of Guanajuato. Before the late 1940s Mexico production was only for the domestic market; it was not until WWII that Mexico began to export strawberries. During the late 1940s strawberry demand in the United States was increasing and imports from Mexico s complemented North America s consumption during the winter months. The opening of freezing and packing plants in Guanajuato and Michoacan also allowed Mexico to export strawberries to the United States. During the second part of the 19 th century, Mexico s strawberry industry increased in size. Prior to the 1950s, strawberry production was concentrated in the states 1

18 of Guanjuato, however, during the 1950s production expanded to the states of Michoacan and Queretaro. In the 1960s, the number of acres in production increased because of the growing number of small producers and processing facilities. In 1966 Mexico had seventeen processing facilities, in 1972 there were thirty-three (Darrow). By the 1970s, Mexico s strawberry industry had efficient production methods and there was potential for continued growth. However, in 1970 and 1974, the country encountered a problem of over production. The strawberry industry in the United States was flourishing, and as a result there was an abundance of strawberries. Prices decreased, and producers in both countries had difficulty recovering production costs. To improve the situation, the governments of Mexico and the United States agreed to establish quotas for Mexican producers. These quotas were removed in 1988 (Runsten). In the 1980s, strawberry production in Mexico is described as period of stagnation and reduction in output and efficiency (Perera). During the 1990s production levels varied each year. (SEE TABLE 1) The economic crisis in Mexico in the first part of the 1990s the overall financial situation for many strawberry growers was poor (Williams). There was a sharp increase in input costs because of the devaluation of the peso; many growers did not have the financial resources to maintain previous production levels. Today the levels of strawberry production depend upon the economic situation of producers, market prices and weather. Production Mexico produces fresh and processed strawberries for domestic and international markets. The states of Michoacan, Guanajuato and Baja California are the country s leading producers. Together they produce more than ninety percent of Mexico s strawberry crop. Small-scale production occurs in the states of Jualisco, Aguascaliented, Mexico, Morelos, Sinaloa, Veracruz, and Zapatecas (Williams). 2

19 Strawberry yields vary greatly depending upon weather conditions, plant variety, and area planted. With favorable weather conditions the country s overall yields are about 24 MT/Ha (59.3 MT/acre). Well-tended areas, however, can produce as much as 35 MT/Ha ( MT/acre). Yields in Baja California tend to be the highest, and can reach MT/Ha ( MT/acre) (Williams). Strawberries are a risky crop to grow; their high production costs can make them unprofitable depending on market prices. The cost of strawberry production includes the establishment of the nursery, field preparation, strawberry plants, fertilizers and fungicides, irrigation, harvesting, and labor. The most expensive input of strawberry producing is the strawberry plant, which is replanted each year. Mexico uses nursery stock from the United States; most strawberry varieties from the United States are patented. In addition to cost of the plants, royalties must be paid. Varieties from the United States produce sufficient yields, however, they are not fully adapted the Mexico s regions of cultivation. The plants are bred specifically for the growing regions in the United States. Mexican producers in the state of Michoacan have been working with the University of Chapingo to produce their own strawberry plant in order to decrease their dependability on the United States (Williams). If these new strawberry plants become available to producers, production costs will decrease. Planting occurs during the summer months, and can begin as early as May, but most of the plants are planted in July and August. Harvesting begins in November and stops in May or June once the rainy season begins. Recently, labor for harvesting in Guanajuato has been scarce because several new industries, like the automotive, steel and the maquiladoras, are hiring laborers that used to harvest strawberries. As a result strawberry producers are paying higher wages to attract workers. Wages used to be approximately 75 to 100 pesos/per shift (US$6.63 to 8.85 per shift); now wages are close to 90 to 110 pesos/shift (US$7.96 to $9.73/shift) (Williams). 3

20 Production/Supply Trends Production of strawberries in Mexico varies upon the country s economic situation, weather, and current events (see Table 1.). The production levels in the early 1990s reflect the devaluation of the peso; producers had limited financial resources and were unable to use the same amount of resources they had used in previous years. The decreased level of domestic supply and exports in 1997 was a result of a food borne illness being linked to tainted strawberries that originated from Baja California. The publicity surrounding the outbreak of hepatitis A had a immediate negative effect on fresh strawberry shippers from Baja California. Due to the decrease in market demand in the United States, Mexican growers were told to stop harvesting in About 200 hectares of strawberries, out of 536-planted hectares were left un-harvested. The strawberry industry in both the United States and Mexico quickly responded to the situation by creating a quality assurance program. This regained consumer confidence and production levels resumed in 1998 (Williams). The production of frozen strawberries competes with the fresh market supply strawberries. According to industry sources, frozen strawberry production has had problems in the past, due to the lack of strawberries for processing in the domestic market. Growers indicate that low international market prices in past years have driven down the production of frozen strawberries, even though the demand has increased. However, if more strawberries from the fresh market are diverted to freezing, production could increase (FAS Online). The cost to produce frozen strawberries in Mexico is less than the cost to produce them in the state of Oregon in the United States. As a result, Oregon has lost its buyers to Mexico (Oregon Department of Agriculture). 4

21 Growing Regions Michoacan Michoacan is the principal producing state in Mexico, producing about fifty-two percent of the country s strawberries (Perera). In Michoacan harvest begins in November and the season continues until June, with peak harvest November to February. Michoacan s strawberries are the first berries to reach the market, and generally yield high prices. According to producers, approximately seventy to eighty percent of the state s strawberries are produced for the processing industry, and twenty to thirty percent go to the fresh export market (Williams). Guanajuato Guanajuato is considered the second largest strawberry producer in Mexico, producing about twenty-seven percent of the country s crop (Perara). The state harvests its strawberries from November to June, and peak harvest is February to April. Guanajuato s strawberries reach the market after Michoacan strawberries, and receive a lower price. In an effort to increase profits, some growers from Guanajuato grow strawberries in Michoacan and harvest their berries early to receive higher prices for their crop. Other strawberry growers have switched to planting less risky crops, such as broccoli, cauliflower, sorghum, wheat, or tomatoes. Producers indicate that approximately thirty to forty percent of the strawberries produced in Guanajuato go to the processing industry (Williams). Baja California The state of Baja California is the third largest strawberry producing state in Mexico and produces the highest quality strawberries in the country. The harvest season in Baja California is January to June, with the peak season in March and April. Most of the state s strawberries are produced for fresh exports (Perara). 5

22 Consumption Mexicans have been increasing their consumption of fruits and vegetables as the accessibility of produce has increased. However, the availability of produce, including strawberries, depends upon the demand from the international market, and consumer purchasing power. Mexico s strawberry industry usually serves the international market first, because international prices tend to be higher. Prices in the domestic market are usually higher during Mexico s export season in the winter months (Williams). As a result domestic fresh strawberry supply is limited. It is believed that domestic fresh strawberry consumption would increase if the amount supplied increased, and if prices were affordable for consumers. Frozen strawberry consumption also varies upon the international market and consumer purchasing power. Strawberries are a popular fruit in Mexico and are used for a variety of purposes. Some fresh strawberry uses include grocery store sales, the food service industry, local markets and street vendors. Some uses of frozen strawberries are jams, breads, bakery items, ice cream and yogurt. Obtaining Mexico s per capita consumption of strawberries is difficult; the strawberry industry and the government of Mexico have limit and incomplete information available. Commercialization In Mexico the commercialization and marketing of produce is changing. The opening of markets, rising per capita income, urbanization, and foreign and domestic investment are causing some of these changes. An example is international based retail store chains, such as Wal-Mart and HEB, locating in Mexico. The international based chain stores introduce their already developed marketing and management skills to the employees of these stores. This includes modern technology, knowledge of the supply 6

23 chain system, and quality control. With these new introductions, Mexican s are being educated about various marketing methods; including the proper handling of strawberries. Using these marketing methods they are able to increase consumer demand for produce (Tropp). Growers and international strawberry suppliers want to expand Mexico s domestic strawberry market. The Market Access Program, funded by the United State Department of Agriculture s Commodity Credit Corporation, provides funding to the California Strawberry Commission for the expansion of foreign markets for United States agriculture products (FAS Online). To increase strawberry demand and consumer awareness in Mexico, the California Strawberry Commission provides point of purchase promotional material for wholesalers and retailers to use. For example, they provide brochures with recipes and the health benefits of consuming strawberries. Even though there are changes occurring in the marketing and distributing of strawberries, the first links in the supply chain are similar to many commodity chains (Perera). Grower Intermediary Wholesale markets Food Service Grocery Store Brokers Packer Terminal Markets International Markets 7

24 Growers and buyers/processors generally operate separately and there is little integration with respect to marketing firms providing input to growers. Some marketing companies are contemplating marketing integration with growers to have better quality and verification controls. Trade Mexico imports and exports fresh and frozen strawberries, although exports are greater that imports. Approximately ninety-seven to ninety-nine percent of Mexico s exports go to the United States; the remainders are shipped by air to Japan and Europe. Most of Mexico s fresh strawberry exports occurs from December to March and do not directly compete with strawberries produced within the United States. Mexico s fresh strawberry imports come from the United States. Mexico is one of the world s top five exporters of frozen strawberries. In 2002 Mexico was the second largest exporter after Poland (Williams). (See Table 2.) Free Trade Agreements The majority of Mexico s strawberry trade occurs in North America and has been affected by the enactment of the North America Free Trade Agreement. Since the enactment of NAFTA in 1994 strawberry trade between Mexico and the United States has increased. Current Issue: the worldwide phase out of methyl bromide Methyl bromide is a widely used fumigant in agriculture. The gaseous fumigant is used to treat the soil before crop planting, for post-harvest storage and facility fumigation, and for government-required quarantine treatments. Methyl bromide 8

25 eliminates many pests and diseases that ruin crops. Methyl Bromide is one of many chemicals that are being phased out worldwide because it is believed to contribute to the depletion of the atmosphere s ozone layer (Amber Waves). The United States and 182 other countries signed the Montreal Protocol, an international treaty, to eliminate the use of methyl bromide worldwide by Under this treaty developed countries will be prohibited from producing or importing the chemical for domestic use after Underdeveloped countries have until 2015 to phase out their use of methyl bromide. According to some strawberry producers, the use of methyl bromide can make a fifty percent difference in yields compared to untreated fields. The elimination of methyl bromide could result in a decrease of strawberry yields; increase the cost of production, resulting in higher prices for consumers. It is believed when the United States must eliminate their use of the chemical, imports from Mexico would significantly increase. However, recently the United Nation s authority regulating the treaty granted the United States and ten other countries a temporary exemption for the January 1, 2005 ban. Agriculture producers in the United States now have another year to research and find alternative chemicals to replace methyl bromide. Conclusion The future outlook for Mexico s strawberry industry is positive, even with the financial conditions of some growers. The future of strawberry trade between the United States and Mexico may change, depending upon the elimination of methyl bromide and the alternatives that producers will use. The increasing strawberry consumption in the United States is very beneficial to Mexico since the majority of Mexico s exports go to the United States. Because of the marketing done by the strawberry industries, consumers are becoming more aware of the link between a healthy diet and the consumption of strawberries. As people begin to realize the importance of eating a healthy diet strawberry consumption is going to increase. 9

26 Works Cited California Strawberry Commission, Carter, Colin, James Chalfant, Massimiliano De Santis, and Rachael Goodhue. "Economic Impacts of the Methyl Bromide Ban on teh California Strawberry Industry." Department of Agricultural and Resource Economics July Cook, Roberta. Strawberry Production in the United States Department of Agricultural and Resource Economics, UC Davis. June Darrow, G.M. The Strawberry: History, Breeding and Physiology. Driscolls Strawberries, FAS Online, (2003). Market access program. retrieved Apr 7, 2004, from Karst, Tom. "Methyl Bromide exemption granted." The Packer.com. 10 Apr "Methyl Bromide Pahseout Proceeds: Users Request Exemption." Amber Waves, USDA Economic Research Service (2003). 28 Apr Bromide.htm Oregon Department of Agriculture. Oregon growers cope with strawberry slump. Perera, M. De nuestra cosecha. Retrieved Apr 7, 2004, from Runsten, David. Transaction Costs in Mexican Fruit and Vegetable Contracting. Department of Agriculture and Resource Economics, University Berkeley of California. March Strawberry Situation and Outlook. FAS Online, Horticultural and Tropical Products Division. Topp, D., Skully, D., & Link J. (). Mexico's changing marketing system for fresh produce. Retrieved Apr 10, Williams, D. (2003). Mexico strawberries annual USDA Foreign Agricultural Service. 10