The US Peach Season has begun and prices are expected to stay elevated

Published 2022년 7월 15일

The start of peach season in California has recently started and will run from July to mid-September. High production costs, rising shipping rates, and labor shortages in California have caused the 2022 peach season to start with a 17.24% YoY price increase. Furthermore, prices are expected to keep an upward trend as the season goes forward. Owing to the 20% drop in production volume expected this season in California from water shortages and frosts that occurred in the winter. As a result, high peach prices are expected in the retail sector throughout the season.

Peach Volumes from California set to Fall by up to 20%

In 2021, the US total peach production was estimated at 688 thousand mt. California was the largest producer on a state level with 505 thousand mt of peach harvested, holding 73.4% of the total national production. The California Central Valley is a prime location for peaches' growth because of its balmy, Mediterranean climate and fertile soil. Its seasonality drives the general peach season in the US. Thus, the peak season in the US for peaches out of California is from the beginning of July to mid-September.

The California stone fruit industry has been battling with exorbitant costs recently. According to the California Fresh Fruit Association, a 15% increase in costs per year was recorded in the last three years, resulting in a 45% rise in overall costs. In addition, shipping costs have surged by 100% over the previous two years. , the packaging is up by 20%, and the sea freight is up 50%. Addtionally, the stone fruit industry has been facing increasing costs in labor after the COVID-19 pandemic made field workers move to longer harvesting cops.

Besides the substantial increase in input costs and logistics constraints, the California peach production is expected to have a 20% drop from last year’s production. According to the previous USDA stone fruit annual report, the 2022 peach production season is forecasted to be reduced to 550 thousand mt. The reasons behind the decreased production are mainly because trees were coming off from a big crop last year, and this year would be a recovery year for them. Additionally, there were some frost and hail in the California valley over the winter that has brought further down the volume for this season.

High Costs and Production Decline will Reflect on Higher Prices

The US peach season has recently started in the US with a considerable increase in prices compared to last season. According to Tridge’s price chart, this year's season starting price on the 4th of July in the New York wholesale market stood at USD 3/kg, which represented a 17.24% YoY increase from last year's USD 2.56/kg. Although the same price had a 35% MoM decrease from the price at the begging of June, the reduction was normal due to the season's transition. However, the YoY increase does reflect a higher price once the availability of peach season has arrived.

Prices are expected to keep increasing as the season progresses through mid-September as the market will feel the shortage of the expected 20% drop in production. Furthermore, Chile, the leading peach supplier to the US, is not in season over those months and won’t be able to offset the gap in domestic production. Greek peach imports might be able to offset the losses in the US market, given the situation. However, the increased cost of logistics and the short shelf life nature of the fruit might make it hard for Greek peaches to perform in the US market successfully. As a result, US consumers will face an expensive peach season ahead of them.