It's The Economy, Stupid

We have been talking now for the last three years about the state of the blueberry industry in New Brunswick.  On the one hand it is a great success story of farmers, government and industry coming together – weaving in new technology and innovative farming – to drive substantial new yields and productivity per acre.  As you can see from the chart New Brunswick went from a marketing production of 5,300 tons in 2001 to 41,000 tons in 2016. In fact, New Brunswick overtook Quebec in 2013 and 2015 as the national leader in production (not that anyone actually heard about this).

But the price paid to farmers plummeted.  From a high of $2,500 per ton (farm gate value) in 2006 to less than $500/ton today.  As you can see from the chart this is not just a New Brunswick problem although we have slipped below both Quebec and Nova Scotia on the price per ton measure.  The reason for this was a massive surplus of frozen blueberries and no identifiable new markets for the product.  There was something like 150 million lbs sitting in freezers waiting to be sold.

When I got a look at the inner workings of this industry I was surprised.  Almost the entire product in New Brunswick is flash frozen and shipped out wholesale.  There is almost no value added beyond a few farmers’ market level products.  When the price was $2,500/ton giddy up.  At $500/ton, whoopsie.

I have to be careful not to position myself as an expert in blueberry sector development and marketing.  But I did find it strange on a trip last spring through the northeastern US to find blueberries in everything – McDonalds smoothies, Dunkin’ Donuts, blueberry flavoured coffee, there were blueberry donuts at Tim Hortons in the states.  In Maine blueberries are ubiquitous – even little kiosks all over the place selling to tourists.

But, again, when historically the whole product was essentially shipped to wholesalers at a good price – no one really cared.  They care now, I assume.

What to do?  We need new markets.  I would argue product and geographic markets.  What can blueberries be used for – at a margin that makes sense – beyond the current stable of blueberry muffins and mom’s blueberry pie once or twice a year?  Are there nutraceutical uses? Are there whole new categories – imagine a blueberry milkshake sold at every fast food place in Canada?

And, of course, new geographic markets.  The wild blueberries of New Brunswick are considered to have a much more robust flavour and other properties compared to those big grape sized mushy blueberries coming out of the cultivated, hot climates.

China is a bit of the holy grail – for just about everything it seems – but until recently they weren’t interested (tariffs).  I’m told that government/industry efforts have paid off and that seems to be reflected in the numbers.  It’s a small sample size but if you look at the value of frozen fruit exports from Nova Scotia in January 2018 you will see a big spike in the value to China (this is the most granular export category but for NS is it primarily blueberries).  Overall, the value of international exports has doubled.   A good trend indeed.

Of course, my sharp eyed readers will ask why I don’t show the New Brunswick export data.  This is because for some reason likely to do with Oxford and history NB blueberry exports almost exclusively show up as Nova Scotia exports.

 

Giddy up.  Wild blueberries are tailor-made for New Brunswick’s climate and soil (parts of the province).  We have a willing cohort of farmers, some impressive research (on product yields not on market development) and a large capacity for frozen storage.  Now we need to put some brain power to how we can ensure this industry is successful and profitable in the long term.