<![CDATA[Fresh Produce Industry Discussion Group Newsletter]]>https://tomkarst.substack.comhttps://substackcdn.com/image/fetch/$s_!fwCU!,w_256,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F8d3780e6-cdaf-4ce6-987b-6043956f6bb5_837x837.pngFresh Produce Industry Discussion Group Newsletterhttps://tomkarst.substack.comSubstackFri, 04 Sep 2026 00:48:10 GMT<![CDATA[Produce Executive Briefing - Red flag on ag labor]]>https://tomkarst.substack.com/p/produce-executive-briefing-red-flaghttps://tomkarst.substack.com/p/produce-executive-briefing-red-flagThu, 03 Sep 2026 13:42:15 GMTNew poll for the group: For grower-shippers, where would you invest the next $1 million to improve grower profitability?

  • New varieties/innovation

  • Automation & labor reduction

  • Marketing to boost demand

  • Better partnerships w/buyers

I asked ChatGPT to summarize recent news relating to the world of fresh produce….

Fresh Produce Industry Discussion Group Newsletter is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Read more

]]><![CDATA[Stimulating fresh produce demand with a tax reduction or tax credit]]>https://tomkarst.substack.com/p/stimulating-fresh-produce-demandhttps://tomkarst.substack.com/p/stimulating-fresh-produce-demandWed, 02 Sep 2026 12:41:15 GMTI asked ChatGPT about Japan’s plan to reduce food taxes….

Fresh Produce Industry Discussion Group Newsletter is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

ChatGPT: The Japan proposal is part of a broader international pattern in which governments have used VAT/GST reductions on food to combat inflation and reduce household food costs. But an important distinction is that Japan is now proposing a very large, broad temporary cut—from 8% to 1%—rather than simply creating or expanding a reduced rate on selected foods.

Japan report — key points

Japan’s Cabinet approved a plan to reduce the consumption tax on grocery food from 8% to 1% for two years beginning April 1, 2027. Restaurant/dining-out food would remain taxed at 10%.

The USDA’s FAS Tokyo office expects:

  • A modest increase in domestic food demand

  • Some shift from eating out toward eating at home, because restaurant meals would remain at 10% while groceries fall to 1%

  • The policy would represent Japan’s first consumption-tax reduction since the tax was introduced in 1989

  • Legislation is expected to pass, although the government still needs to complete the tax-reform process.

The measure is politically significant because Prime Minister Takaichi campaigned on the tax cut, and the issue contributed to the LDP’s 2026 electoral success.

For produce, the most interesting implication is the potential demand stimulus. A seven-percentage-point reduction in the grocery tax is large enough to potentially affect purchasing behavior, particularly for fresh fruits and vegetables, although the USDA cautions that the overall demand effect is expected to be modest.

Other countries have done this

Read more

]]><![CDATA[Per capita gains since 2016: charting raspberries and other winners]]>https://tomkarst.substack.com/p/per-capita-gains-since-2016-chartinghttps://tomkarst.substack.com/p/per-capita-gains-since-2016-chartingMon, 31 Aug 2026 12:12:47 GMT

Let’s chat with AI ChatGPT about fresh produce consumption gains….

Fresh Produce Industry Discussion Group Newsletter is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

What fresh produce item has the fastest per capita growth since 2015? Rank the top ten commodities with the fastest-growing consumption and the bottom 10 slowest-growing fresh produce items

ChatGPT: Yes. Using USDA Economic Research Service per-capita availability as the best national proxy for consumption, the standout winner since 2015 is raspberries. USDA cautions that “availability” is not literal consumer intake—it measures the supply available for domestic consumption—but it is the most consistent long-term commodity-level series available. ([Economic Research Service][1])

Fastest-growing fresh produce commodities since 2015

I would rank the commodities by percentage change in per-capita fresh availability from 2015 to the latest comparable USDA data, rather than by pounds gained. This favors smaller commodities with rapidly expanding consumption.

| Rank | Commodity | Direction since 2015 | Assessment |

| 1 | Raspberries | Very large increase | 🥇 Clear leader |

| 2 | Blueberries | Large increase | 🥈 |

| 3 | Limes | Large increase | 🥉 |

| 4 | Avocados | Large increase | Major structural winner |

| 5 | Tangerines/mandarins | Strong increase | |

| 6 | Strawberries | Strong increase | |

| 7 | Mangoes | Strong increase | |

| 8 | Lemons | Moderate/strong increase | |

| 9 | Kiwifruit | Moderate increase | |

| 10 | Pineapples | Moderate increase | |

The pattern is striking: berries and tropical/specialty fruit dominate the growth list. USDA data show, for example, that from 2011–21 raspberry per-capita availability rose 192%, blueberries 97%, limes 86%, mandarins 69%, avocados 64%, strawberries 45%, mangoes 44%, lemons 42%, kiwifruit 39% and pineapple 38%. ([Haul Produce][2])

The avocado story is particularly powerful: USDA-derived data show U.S. avocado availability rising from just 1.52 pounds per person in 1998 to an estimated 9.22 pounds in 2023. ([Ask IFAS - Powered by EDIS][3])

The 10 slowest-growing

At the other end, the major losers are concentrated in traditional tree fruit, citrus and several mature vegetable categories:

| Rank | Commodity | Trend since 2015 | Assessment |

| -----: | ------------------------ | -----------------: | ------------- |

| 1 | Peaches & nectarines | Sharp decline | Biggest loser |

| 2 | Plums/prunes | Sharp decline | |

| 3 | Grapefruit | Sharp decline | |

| 4 | Apricots | Decline | |

| 5 | Oranges | Decline | |

| 6 | Melons | Decline | |

| 7 | Pears | Decline/flat | |

| 8 | Iceberg/head lettuce | Decline | |

| 9 | Celery | Flat/declining | |

| 10 | Sweet corn | Flat/declining | |

The long-term fruit data are especially revealing. USDA’s historical series shows that traditional fruit categories have lost substantial ground while newer categories have gained. For example, from 2011–21, peaches/nectarines fell 47%, plums/prunes 42%, grapefruit 46%, oranges 18%, melons 13%, and pears 3%. ([Haul Produce][2])

The really important industry takeaway

The U.S. fresh-produce growth story since 2015 is not really a “fruits and vegetables” story. It is a “specialty fruit” story.

The biggest winners are:

Berries → tropical fruit → avocados → specialty citrus

while the biggest losers are:

traditional tree fruit → grapefruit/oranges → melons → mature commodity vegetables.

That is consistent with the broader USDA data. Fresh vegetables actually increased only modestly over the long run—from 142 pounds per person in 1996 to 148 pounds in 2024—while total vegetable/pulse availability fell to its lowest level in more than 35 years. ([Economic Research Service][4])

And the import data help explain the winners. The U.S. has increasingly relied on imports to satisfy demand for commodities such as avocados, berries, limes and mangoes. A recent analysis using USDA data found U.S. per-capita retail availability of fresh raspberries up 357% between 2007–09 and 2019–21, blueberries up 207%, avocados up 122%, limes up 79%, strawberries up 57% and mangoes up 69%. ([Migration Dialogue][5])

My “best bets” interpretation for the produce industry

If you’re looking at this from a grower/shipper investment perspective, I’d divide the market into three buckets:

🟢 Structural growth

Raspberries

Blueberries

Avocados

Limes

Strawberries

Mangoes

Specialty citrus

🟡 Mature but defendable

Grapes

Apples

Bananas

Pineapple

Onions

Tomatoes

Bell peppers

🔴 Structural consumption pressure

Peaches/nectarines

Plums/prunes

Grapefruit

Oranges

Melons

Pears

Iceberg lettuce

Traditional commodity vegetables

One caveat: USDA’s fresh-fruit series and fresh-vegetable series use somewhat different measurement conventions—fresh fruit is reported on a farm-weight basis, while fresh vegetables are available on both farm- and retail-weight bases—so I would not treat a cross-commodity ranking as mathematically precise to the decimal point without downloading and harmonizing the underlying datasets. ([Economic Research Service][6])

[1]: https://ers.usda.gov/data-products/food-availability-per-capita-data-system/interactive-charts-and-highlights?utm_source=chatgpt.com “Food Availability (Per Capita) Data System - Interactive Charts and Highlights | Economic Research Service”

[2]: https://haulproduce.com/tag/berry-consumption/?utm_source=chatgpt.com “berry consumption - Haul Produce”

[3]: https://ask.ifas.ufl.edu/publication/FE1150?utm_source=chatgpt.com “FE1150/FE1150: An Overview of the Avocado Market in the United States”

[4]: https://ers.usda.gov/data-products/charts-of-note/112836?utm_source=chatgpt.com “Vegetable availability declined in 2024 | Economic Research Service”

[5]: https://migration.ucdavis.edu/rmn/blog/post/?id=3084&utm_source=chatgpt.com “Rural Migration Blog”

[6]: https://ers.usda.gov/data-products/food-availability-per-capita-data-system/food-availability-documentation?utm_source=chatgpt.com “Food Availability (Per Capita) Data System - Food Availability Documentation | Economic Research Service”

Build a precise 2015–2024 table of ~40 major fresh produce commodities, showing 2015 pounds/person, 2024 pounds/person, % change, pounds gained/lost, and rank—with a separate “winners and losers” analysis for growers…

ChatGPT: Absolutely. I dug further into the USDA data, and I’d make one important correction to my earlier answer: the cleanest comparison is USDA ERS per-capita availability, not literal consumption, and the latest commodity-level series are not all updated through the same year. USDA itself describes these data as a proxy for consumption and says they are useful for identifying demand trends. ([Economic Research Service][1])

The latest USDA fruit/tree-nut yearbook was updated in February 2026, while the latest vegetables-and-pulses yearbook was released August 28, 2025. ([Economic Research Service][2])

Bottom line

Raspberries are the strongest fresh-produce consumption growth story of the past decade. But the bigger industry story is that berries, avocados and specialty/tropical fruit are taking share from traditional tree fruit, citrus and some conventional vegetables.

Top 10 fastest-growing fresh produce commodities

2015–2024/most recent comparable USDA per-capita availability

| Rank | Commodity | Approx. 2015 lbs./person | Latest lbs./person | Change | Growth |

| 1 | Raspberries | ~0.8 | ~2.2 | +1.4 | ~+175% |

| 2 | Blueberries | ~1.6 | ~3.0 | +1.4 | ~+85% |

| 3 | Limes | ~1.8 | ~3.0 | +1.2 | ~+65% |

| 4 | Avocados | ~5.0 | ~9.0 | +4.0 | ~+80% |

| 5 | Blackberries | ~0.5 | ~0.8 | +0.3 | ~+60% |

| 6 | Mangoes | ~1.9 | ~2.9 | +1.0 | ~+50% |

| 7 | Tangerines/mandarins | ~3.4 | ~5.0 | +1.6 | ~+45% |

| 8 | Strawberries | ~7.9 | ~11.0 | +3.1 | ~+40% |

| 9 | Lemons | ~3.2 | ~4.3 | +1.1 | ~+35% |

| 10 | Kiwifruit | ~1.4 | ~1.8 | +0.4 | ~+30% |

Important: I would treat the percentages above as directional rankings rather than audit-grade estimates because USDA’s fruit series contains a mixture of calendar-year and marketing-year measurements and has revised historical estimates. The USDA’s current fruit yearbook contains more than 20 years of per-capita-use data and is the appropriate underlying source. ([Economic Research Service][2])

The magnitude of the berry trend is not in doubt. USDA has previously reported that from 2011–21 raspberry per-capita availability increased 192%, blueberries 97%, limes 86%, mandarins 69%, avocados 64%, strawberries 45% and mangoes 44%. ([Economic Research Service][3])

The 10 slowest-growing / biggest declining commodities

| Rank | Commodity | Approx. trend since 2015 | Industry interpretation |

| -----: | ------------------------ | -----------------------: | ------------------------------ |

| 1 | Grapefruit | ↓↓↓ | Severe structural decline |

| 2 | Peaches & nectarines | ↓↓↓ | Major demand problem |

| 3 | Plums/prunes | ↓↓↓ | Major demand problem |

| 4 | Apricots | ↓↓ | Small but declining category |

| 5 | Oranges | ↓↓ | Fresh demand under pressure |

| 6 | Cantaloupe | ↓↓ | Mature/declining |

| 7 | Honeydew | ↓↓ | Mature/declining |

| 8 | Pears | ↓ | Essentially stagnant/declining |

| 9 | Iceberg lettuce | ↓ | Lost share to leaf/romaine |

| 10 | Sweet corn | ↓/flat | Mature category |

The grapefruit decline is particularly dramatic. USDA reported fresh grapefruit availability at only 1.34 pounds per person in 2023/24, 70% below 2003/04. ([Economic Research Service][4])

Oranges are also clearly moving in the wrong direction: USDA reported fresh orange availability of only 7.21 pounds per person in 2023/24, down 8% year over year. ([Economic Research Service][5])

---

But here’s the more interesting analysis

If we step back from individual commodities, the last decade looks like a major restructuring of the American fresh-produce basket.

Winners

  • Berries

  • Raspberries

  • Blueberries

  • Blackberries

  • Strawberries

  • Tropical/specialty

  • Avocados

  • Mangoes

  • Limes

  • Kiwifruit

  • Specialty citrus

  • Mandarins

  • Lemons

Losers

  • Traditional tree fruit

  • Peaches

  • Nectarines

  • Plums

  • Pears

  • Apricots

  • Traditional citrus

  • Grapefruit

  • Oranges

  • Melons

  • Cantaloupe

  • Honeydew

  • Traditional commodity vegetables

  • Iceberg lettuce

  • Potatoes

  • Some processing vegetables

That is consistent with USDA’s broader findings. Fresh vegetables actually increased from 142 pounds per capita in 1996 to 148 pounds in 2024, but the increase has been modest. Meanwhile, total vegetable and pulse availability fell to 376 pounds per person in 2024, the lowest level in more than 35 years. ([Economic Research Service][6])

And even within vegetables there is significant redistribution.

Vegetable winners

USDA’s 2024 data show:

| Commodity | 2024 availability |

| Onions | 21.27 lb. |

| Tomatoes | 19.11 lb. |

| Romaine/leaf lettuce | ~16 lb. |

| Iceberg/head lettuce | ~12 lb. |

| Bell peppers | ~11 lb. |

Onions and tomatoes remain extremely large categories, while leaf/romaine lettuce has gained at the expense of iceberg. ([Economic Research Service][7])

---

What this means for growers

This is where I think the data become especially useful.

🟢 The “best bets”

If I were evaluating a fresh-produce investment based primarily on long-term demand growth, I’d put these at the top:

1. Raspberries

2. Blueberries

3. Avocados

4. Strawberries

5. Mandarins

6. Limes

7. Mangoes

8. Blackberries

9. Lemons

10. Leaf/romaine lettuce

But there’s an important qualification:

Fast consumption growth does not automatically equal attractive grower profitability.

Berries are the perfect example. Strong demand has attracted enormous investment in production, imports and protected culture. Consequently, supply can grow faster than demand and crush grower returns.

---

The “danger zone”

I’d be considerably more cautious about major new investment in:

Grapefruit → peaches/nectarines → plums → apricots → oranges → pears → cantaloupe/honeydew → iceberg lettuce

The issue isn’t necessarily that these products are bad businesses today.

The issue is that the underlying demand trajectory is working against growers.

A grower can overcome declining consumption through:

  • variety replacement,

  • premiumization,

  • better quality,

  • branding,

  • convenience,

  • new packaging,

  • export markets,

  • or reducing supply.

But simply producing more of a declining commodity is a dangerous strategy.

---

One finding I think is particularly important

The produce industry isn’t suffering from a universal lack of consumer demand.

It’s suffering from a mismatch between what growers produce and what consumers increasingly want.

That’s a very different problem.

The U.S. consumer is demonstrating strong willingness to buy:

berries + avocados + tropical fruit + specialty citrus + convenient leafy greens

while showing considerably less enthusiasm for:

traditional tree fruit + grapefruit + conventional melons + iceberg lettuce.

That suggests the industry’s profitability problem may be partly a portfolio problem rather than simply a pricing problem.

---

My proposed “Produce Demand Growth Index”

Given your work on grower profitability, I think the next step would be even more useful than simply ranking consumption.

I’d build a Produce Demand Growth Index (PDGI) for roughly 40 commodities combining:

50% — 2015–24 per-capita consumption growth

20% — 5-year consumption momentum

15% — retail dollar growth

10% — import penetration/demand expansion

5% — grower price trend

Then we’d have four quadrants:

| | Strong grower economics | Weak grower economics |

| Strong demand growth | 🟢 Best bets | 🟡 Oversupplied growth |

| Weak demand growth | 🟠 Premium/niche opportunities | 🔴 Structural losers |

That would be much more actionable for growers than consumption growth alone. It could identify commodities where demand is growing and growers are actually capturing economic value.

The underlying USDA data are particularly well suited for this because the ERS fruit yearbook now contains production, trade, prices, per-capita use and value data, while the vegetables-and-pulses yearbook contains the same basic measures for more than 70 vegetable and pulse commodities. ([Economic Research Service][2])

[1]: https://www.ers.usda.gov/data-products/food-availability-per-capita-data-system/food-availability-documentation?utm_source=chatgpt.com “Food Availability (Per Capita) Data System - Food Availability Documentation | Economic Research Service”

[2]: https://ers.usda.gov/data-products/fruit-and-tree-nuts-data/fruit-and-tree-nuts-yearbook-tables “Fruit and Tree Nuts Data - Fruit and Tree Nuts Yearbook Tables | Economic Research Service”

[3]: https://ers.usda.gov/data-products/food-availability-per-capita-data-system/interactive-charts-and-highlights?utm_source=chatgpt.com “Food Availability (Per Capita) Data System - Interactive Charts and Highlights | Economic Research Service”

[4]: https://www.ers.usda.gov/sites/default/files/_laserfiche/outlooks/110107/FTS-380.pdf?v=97229&utm_source=chatgpt.com “Fruit and Tree Nuts Outlook: September 2024”

[5]: https://ers.usda.gov/sites/default/files/_laserfiche/outlooks/110107/FTS-380.pdf?v=67806&utm_source=chatgpt.com “Fruit and Tree Nuts Outlook: September 2024”

[6]: https://www.ers.usda.gov/data-products/charts-of-note/112836?utm_source=chatgpt.com “Vegetable availability declined in 2024 | Economic Research Service”

[7]: https://www.ers.usda.gov/sites/default/files/_laserfiche/outlooks/111478/VGS-375.pdf?v=31507&utm_source=chatgpt.com “Vegetables and Pulses Outlook: April 2025”

]]><![CDATA[Volatile veggies -USDA Food Price Outlook deconstructed]]>https://tomkarst.substack.com/p/volatile-veggies-usda-food-pricehttps://tomkarst.substack.com/p/volatile-veggies-usda-food-priceThu, 27 Aug 2026 12:07:08 GMTCheck out The Packer’s coverage of U.S.-Canada trade tensions.

ChatGPT takes a swing at the latest USDA Food Price Outlook….

Fresh Produce Industry Discussion Group Newsletter is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

ChatGPT: USDA Food Price Outlook — August 2026 Summary

The latest USDA Economic Research Service (ERS) Food Price Outlook, updated August 25, incorporates July 2026 CPI and PPI data. The overall message is that food inflation remains moderate, but fresh produce is running considerably hotter than the overall grocery basket—especially vegetables. ([Economic Research Service][1])

The big picture

| Measure | July 2026 YoY | 2026 USDA forecast | 2027 forecast |

| All food | +3.0% | +3.0% | +2.4% |

| Food at home | +2.7% | +2.5% | +2.1% |

| Food away from home | +3.4% | +3.6% | +2.7% |

| Fresh fruit | +4.9% | +2.9% | — |

| Fresh vegetables | +6.3% | +5.9% | — |

The important point is that grocery inflation is expected to remain below its 20-year average, while restaurant inflation remains above its historical norm. ([Economic Research Service][1])

Fresh produce is the standout

The July data show a sharp divergence within produce:

Fresh fruit: +1.1% month-to-month; +4.9% year-over-year

Fresh vegetables: -1.6% month-to-month; +6.3% year-over-year ([Economic Research Service][1])

For specific vegetables, July retail prices were:

Tomatoes: +12.8% YoY

Lettuce: +7.5%

Potatoes: +3.4% ([Economic Research Service][1])

USDA forecasts fresh vegetable prices to rise 5.9% for all of 2026, substantially above the 2.6% historical average for food-at-home prices. Fresh fruit prices are forecast to increase 2.9%. ([Economic Research Service][1])

The most interesting produce story is at the farm level

There is an unusually large disconnect between farm-level vegetable prices and retail vegetable prices.

Farm-level fresh vegetable prices were:

+5.9% YoY in January

+48.0% in February

+49.0% in March

+56.3% in April

+70.2% in May

+59.2% in June

But after plunging 29.4% from June to July, farm-level vegetable prices were actually 19.1% below July 2025. ([Economic Research Service][1])

Despite that July collapse, ERS still forecasts farm-level vegetable prices to average 17.8% higher in 2026, with a very wide forecast range of +7.6% to +30.9%. ([Economic Research Service][1])

That is probably the most important statistic in the report for growers and shippers: the farm-level market has been extremely volatile even while retail prices remain substantially elevated.

Fruit shows the opposite pattern

Farm-level fruit prices fell 1.4% in July but remained 5.0% above July 2025. ERS nevertheless forecasts average farm-level fruit prices to decline 3.7% in 2026, with a range from -8.3% to +1.3%. ([Economic Research Service][1])

So USDA’s outlook implies:

Vegetables: strong farm prices on an annual-average basis, but rapidly deteriorating conditions by mid-summer.

Fruit: retail prices still elevated, but farm-level pricing is expected to weaken.

Inflation is coming down dramatically from the 2022 shock

The longer-term trend is encouraging:

2022: food prices +9.9%

2023: +5.0%

2024: +2.3%

2025: +2.9%

2026 forecast: +3.0%

2027 forecast: +2.4% ([Economic Research Service][1])

Food-at-home inflation has been particularly restrained: just 1.2% in 2024 and 2.3% in 2025, compared with a 20-year average of 2.6%. ([Economic Research Service][1])

One important caution about the forecasts

ERS uses statistical models and provides a 95% forecast interval, meaning there is considerable uncertainty—particularly for 2027. For example, the 2027 forecast for food-at-home inflation is 2.1%, but the stated interval ranges from -5.7% to +10.5%. ([Economic Research Service][1])

My takeaway for the produce industry

The August FPO paints a more complicated picture than the headline 3% food inflation number suggests.

For consumers, food inflation looks relatively manageable. But for the produce industry, vegetables are experiencing much greater price pressure and volatility than the overall food basket.

The particularly striking combination is:

> Retail fresh vegetables +6.3% YoY in July, while farm-level fresh vegetable prices were -19.1% YoY.

That suggests the current produce environment is not simply an inflation story. There is a potentially significant disconnect between what consumers are paying and what growers are receiving, with margins, marketing costs, shrink, transportation and other downstream costs playing important roles. ([Economic Research Service][1])

For your Produce Executive Briefing, I would characterize the August USDA outlook as:

🟢 Overall food inflation: moderate

🟡 Grocery inflation: relatively healthy

🟠 Fresh fruit: above-average retail inflation

🔴 Fresh vegetables: high retail inflation + extreme farm-level volatility

🔴 Grower vegetable pricing: potentially weakening sharply despite elevated retail prices

[USDA ERS Food Price Outlook — Summary Findings](https://www.ers.usda.gov/data-products/food-price-outlook/summary-findings?utm_source=chatgpt.com)

[1]: https://www.ers.usda.gov/data-products/food-price-outlook/summary-findings “Food Price Outlook - Summary Findings | Economic Research Service”

I asked ChatGPT to summarize a recent USDA report on EU maximum residue levels….

ChatGPT: Executive Summary

A new European Commission Joint Research Centre (JRC) study examines what could happen if the EU reduces maximum residue levels (MRLs) to the limit of quantification (LOQ) for 18 pesticides that are not approved for use in the EU. The USDA report says the proposal could have major consequences for agricultural trade, particularly for U.S. exporters.

The headline number

Under the study’s most extreme “no adaptation” scenario, EU agricultural imports could fall 41% overall. Citrus imports could fall 92% and soybean imports 90%. The intermediate scenario produces an 8% decline, while the lower-bound scenario produces only a 0.4% decline.

For the United States, approximately $16 billion of agricultural exports to the EU could be affected, representing roughly 30% of total EU agricultural imports in the categories examined.

What the EU is proposing

The underlying policy objective is to prevent food and feed imported into the EU from containing residues of pesticides that the EU has banned because of their hazard characteristics. The study covers:

18 active substances

235 commodities

86 exporting countries

10,583 substance/commodity/country combinations

5,473 combinations with recorded EU trade.

The report highlights an important philosophical difference: the EU approach is based on hazard, while the U.S. position favors risk-based, case-by-case assessment that considers actual exposure.

Potential impact on consumers

The extreme scenario could cause significant EU food-price increases:

| Commodity | Potential price increase |

| Coffee | +332% |

| Soybean meal/cake | +105% |

| Citrus | +85% |

| Table grapes — intermediate scenario | +6.5% |

| Citrus — intermediate scenario | +5.6% |

Under the lower-bound scenario, price increases for all commodities are below 1%.

EU growers could benefit—but livestock could suffer

Reduced imports would create opportunities for EU farmers. In the extreme scenario, EU crop production rises 1.1%, with farmland use increasing by 1.9 million hectares.

Some commodities see very large modeled production increases:

Citrus: +47%

Rapeseed: +41%

Soybeans: +29%

But higher feed costs could hurt livestock. In the no-adaptation scenario, oilseed-cake prices rise 87%, causing modeled pork production to fall 5.8% and poultry production 5.4%.

Particularly important for fresh produce

The study suggests citrus is one of the most vulnerable categories, with a modeled 92% import decline in the extreme scenario. The EU also is not self-sufficient in 29 affected commodities, meaning it would need alternative suppliers at an estimated 2–9% higher cost. Figs, almonds, hazelnuts and beans are identified as especially difficult to replace.

For produce shippers, the key issue is therefore not simply whether a pesticide is banned in Europe. It is whether exporters can economically switch to alternative crop-protection programs while still meeting EU residue requirements.

The biggest caveat

The 41% figure should not be treated as a forecast.

The JRC explicitly says its scenarios are plausible best- and worst-case outcomes rather than predictions. The study also acknowledges that it:

is not a formal impact assessment

has not undergone public consultation

uses uniform assumptions despite major differences among crops and countries

does not incorporate a transition/grace period

does not fully capture differences in pesticide use and production costs.

The USDA report emphasizes that the JRC itself says the analysis does not meet the EU’s requirements for a full impact assessment and that additional analysis should precede regulatory action.

Bottom line for the produce industry

This is potentially a major trade issue, but the 41% number represents an extreme scenario rather than the likely outcome.

For U.S. fresh produce, I would watch three things closely:

1. Citrus and other commodities with high exposure to the affected pesticides.

2. Whether the EU provides a transition period, giving growers time to change chemical programs.

3. Whether alternative pesticides are economically and agronomically viable. The JRC’s cyproconazole case study found that switching to EU-approved alternatives could raise production costs 20–40%, although actual increases could be lower depending on effectiveness.

The immediate implication is higher compliance costs and potentially reduced EU market access for growers who cannot quickly adapt, rather than an automatic 41% collapse in agricultural imports. The actual impact will vary enormously by commodity, pesticide, country and ability to adapt.

Asking ChatGPT about this Federal Register notice: Summary: USDA Revises U.S. Mushroom Grade Standards

ChatGPT: The Federal Register notice you linked is a final USDA Agricultural Marketing Service (AMS) action revising the U.S. Standards for Grades of Mushrooms. The changes take effect September 24, 2026. ([GovInfo][1])

What is changing?

The revisions modernize the standards for cultivated white button, brown/crimini and portabella mushrooms to better reflect current production, harvesting, packing and marketing practices. ([GovInfo][1])

The most significant changes are:

New U.S. No. 1 Portabella grade. This formally establishes a USDA grade specifically for portabella mushrooms.

Size is separated from grade. Size specifications are removed from individual grade requirements and placed in a separate section.

Defect tolerances are revised for both U.S. No. 1 and U.S. No. 2 mushrooms, including different tolerances at shipping point versus destination.

Open-veils standards are modernized. A small amount of exposed gills will no longer automatically constitute damage in non-portabella mushrooms, while open veils are recognized as a normal characteristic of portabellas.

Defect definitions are updated, including bruising, cuts/mechanical defects, discoloration, extraneous material, feathering, open veils and spots.

Packaging tolerances are revised so allowable defects and off-size mushrooms can vary according to package size.

Mixed specialty packs are explicitly permitted, allowing white and brown mushrooms to be intentionally packaged together. ([GovInfo][1])

Why did USDA make the changes?

The American Mushroom Institute (AMI) petitioned USDA in 2020, arguing that the existing standards no longer reflected modern mushroom production and that there was no specific USDA standard for portabella mushrooms.

USDA worked with the industry for several years before publishing proposed revisions in April 2026. It received nine comments, and all nine supported the proposed changes. ([GovInfo][1])

What does this mean for the mushroom industry?

This is primarily a modernization and standardization measure, rather than a major regulatory burden.

The practical benefits should include:

1. Better recognition of portabellas.

Portabellas are now formally incorporated into the grade system rather than being treated through standards developed primarily around button mushrooms.

2. Fewer disputes over quality.

Clearer definitions of defects and separate shipping-point/destination tolerances should give buyers, sellers and inspectors a more consistent basis for determining grade.

3. Better alignment with retail merchandising.

The explicit allowance for mixed white-and-brown mushroom specialty packs is particularly relevant as retailers increasingly use variety packs and differentiated packaging.

4. More realistic quality standards.

The treatment of open veils is a good example: USDA recognizes that characteristics considered defects under older standards may be normal for today’s products—especially portabellas. ([GovInfo][1])

Bottom line

This is a favorable, industry-supported modernization of the mushroom grading system. It should make USDA standards more useful to growers, shippers, buyers and inspectors without fundamentally changing how mushrooms are marketed.

For the fresh produce industry, the bigger takeaway is that USDA is willing to update commodity standards when existing grade definitions no longer match modern varieties, production practices and retail formats. The mushroom industry’s successful effort could be a useful precedent for other commodities seeking to modernize outdated USDA grade standards. ([GovInfo][1])

[Full Federal Register notice](https://www.govinfo.gov/content/pkg/FR-2026-08-25/html/2026-17309.htm?utm_source=chatgpt.com)

[1]: https://www.govinfo.gov/content/pkg/FR-2026-08-25/html/2026-17309.htm?utm_source=chatgpt.com “Federal Register, Volume 91 Issue 163 (Tuesday, August ...”

Share Fresh Produce Industry Discussion Group Newsletter

]]><![CDATA[Australia Stone Fruit Annual - a summary]]>https://tomkarst.substack.com/p/australia-stone-fruit-annual-a-summaryhttps://tomkarst.substack.com/p/australia-stone-fruit-annual-a-summaryThu, 27 Aug 2026 11:27:49 GMTI asked ChatGPT to summarize the USDA’sAustralia Stone Fruit Annual

Fresh Produce Industry Discussion Group Newsletter is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

ChatGPT: Executive Summary

The USDA’s August 24, 2026 report points to a significantly smaller Australian stone-fruit crop in 2026/27, driven primarily by an unusually warm winter that reduced the accumulation of winter chill hours. The impact is most pronounced in Victoria and New South Wales, while Tasmania looks considerably better positioned.

1. 2026/27 production outlook

| Commodity | 2025/26 est. | 2026/27 forecast | Change |

| Cherries | 20,000 MT | 17,000 MT | -15% |

| Peaches & nectarines | 66,000 MT | 60,000 MT | -9% |

| Total | 86,000 MT | 77,000 MT | -10% |

The report attributes the decline primarily to insufficient winter chilling, which can produce delayed/uneven bud break, poorer fruit set and uneven fruit development.

2. Tasmania is the bright spot

Tasmania has a cooler climate and accumulated adequate winter chill, giving cherry growers there a much more favorable start. The combination of adequate chill, expected dry weather and good irrigation availability could produce a high-quality crop.

This matters because Victoria and Tasmania account for about 90% of Australia’s cherry exports. With Victoria expected to have a smaller crop, Tasmania should represent a larger share of Australia’s export program.

3. Water is becoming a major cost issue

The weather outlook is somewhat mixed. Australia is experiencing El Niño, and September-November rainfall is expected to be below normal in major production areas. Drier weather is actually favorable for pollination, disease control and fruit quality—but Victoria has limited irrigation reserves.

Consequently, tradeable irrigation-water prices are likely to remain high or increase, adding costs precisely when growers are facing smaller crops.

For Victorian growers, the report therefore sees a particularly difficult combination:

smaller crop + higher water costs + additional bud-break treatments + potentially lower pack-outs = substantial margin pressure.

4. Cherries: exports fall, but remain near normal

Cherry exports are forecast at 4,000 MT, down from an exceptionally strong 4,900 MT in 2025/26, but roughly in line with the five-year average.

Australia’s primary cherry export markets remain Hong Kong, Vietnam, Taiwan, Singapore and China, collectively accounting for roughly 75%-80% of exports.

An interesting retail development: Australian supermarkets have increasingly shifted cherries from bulk boxes to 300-gram packages, reportedly reducing spoilage and improving retailer profitability. That packaging change has also helped strengthen demand for out-of-season imported cherries.

5. Peach & nectarine industry faces a deeper structural problem

The peach/nectarine story is more concerning than the one-year production decline suggests.

Production has fallen from roughly 110,000 MT historically to around 68,000 MT recently, with the new forecast at just 60,000 MT. The report warns that continued orchard removals and inadequate replacement plantings could cause further declines.

There is a potential solution: newer trellised orchards and higher-yielding varieties could raise yields, quality and efficiency. But growers need sustained positive price signals to justify the capital investment.

6. Consumer demand is the biggest long-term concern

The report’s most important structural observation may be the shift from peaches and nectarines toward berries.

Australian peach/nectarine consumption is forecast to fall to 50,600 MT in 2026/27, from 54,900 MT in 2025/26. The report says berry consumption has been rising while peach and nectarine consumption has declined sharply.

The reasons appear to include:

Greater year-round berry availability

Falling berry prices

Changing consumer preferences

Cost-of-living pressures

Lower domestic peach/nectarine availability

The USDA cautions that it isn’t clear whether berries are directly taking spending away from peaches and nectarines, but the trend is unmistakable.

7. Imports are a missed opportunity

Australia imports almost all of its counter-seasonal stone fruit from the United States, but peach and nectarine imports have collapsed to about 600 MT, versus historical levels above 1,500 MT. The two largest Australian supermarket chains stopped routinely stocking imported peaches and nectarines.

There is a major price problem: U.S. peaches and nectarines reportedly retail for four to five times the price of comparable domestic fruit when Australian fruit is in season. That makes it difficult to build consumer demand for imports.

8. Export competition is intensifying

Australian peach/nectarine exports are forecast to fall from 11,700 MT to 10,000 MT. Nectarines account for roughly two-thirds of exports because their firmer flesh makes them better suited to sea transportation.

China remains particularly important for nectarines, historically accounting for about three-quarters of exports. But Australia is facing increasing competition from Chile, particularly in China.

Bottom line for the produce industry

Australia’s stone-fruit sector is being squeezed from both sides. In the short run, climate variability is reducing production and raising costs. In the longer run, the bigger issue is weakening consumer demand for peaches and nectarines and insufficient investment in orchard replacement.

The cherry sector looks comparatively healthier, particularly in Tasmania, where production conditions and export opportunities remain favorable.

For peaches and nectarines, however, the report suggests a potential structural contraction unless growers receive enough price incentive to invest in modern orchards and the industry succeeds in rebuilding consumer demand.

The most important takeaway: this is not simply a weather story. Weather is accelerating an underlying competitiveness and demand problem in Australian peaches and nectarines.

Leave a comment

]]><![CDATA[Rating the produce economy - ChatGPT puts a fine point on it]]>https://tomkarst.substack.com/p/rating-the-produce-economy-chatgpthttps://tomkarst.substack.com/p/rating-the-produce-economy-chatgptWed, 26 Aug 2026 11:23:56 GMTI asked the group this poll question a week ago: Compared with two years ago, how would you rate the overall financial health of the produce business?

Only 22% said somewhat better (19%) or much better (3%), while 78% indicated somewhat worse (57%) or much worse (21%).

AI begs to differ, somewhat.

We have the luxury of turning to AI to confirm or refute our gut instincts. So, I put this to ChatGPT: How would you rate the health of the produce economy now compared with two years ago?

ChatGPT: I’d rate the U.S. produce economy today at about 6.5/10 — somewhat healthier than two years ago, but not dramatically healthier. The key distinction is that the industry appears more stable operationally, but profitability remains uneven and consumers are still price-sensitive.

My two-year comparison

| Measure | 2024 | 2026 | Direction |

| Consumer demand | 6/10 | 6.5/10 | ↗ |

| Retail pricing environment | 5/10 | 6/10 | ↗ |

| Grower/shipper profitability | 5/10 | 6/10 | ↗/mixed |

| Produce consumption potential | 6/10 | 6.5/10 | ↗ |

| Labor environment | 4.5/10 | 5.5/10 | ↗ |

| Input costs | 4.5/10 | 5/10 | ↗/mixed |

| Trade/supply-chain risk | 6/10 | 5/10 | ↘ |

| Overall industry health | 5.5/10 | 6.5/10 | ↗ |

Why I think it’s better

1. The industry has moved beyond the worst of the post-pandemic cost shock.

Two years ago, growers and shippers were dealing with unusually high labor, transportation, packaging, interest and other costs while retailers were extremely reluctant to accept price increases. The cost structure is still difficult, but the industry has had more time to adjust.

2. Produce pricing is actually providing more revenue opportunity.

This is one of the biggest changes. USDA says retail fresh-vegetable prices were 9.9% above a year earlier in June 2026, with lettuce up 32.1% and tomatoes up 19.5%. Fresh-fruit prices were up a much more modest 2%. ([Economic Research Service][1])

At the farm level, USDA reported vegetable prices 70.2% higher year-over-year in May, although that number is heavily influenced by commodity-specific market conditions and shouldn’t be interpreted as a universal improvement in grower profitability. ([Economic Research Service][2])

3. Produce remains one of the better value propositions in the grocery store.

Consumers are under considerable financial pressure, but they’re trading down rather than abandoning grocery shopping. Produce can benefit when consumers substitute away from expensive proteins and restaurant meals.

Food-at-home prices were up 2.7% year-over-year in June, versus 3.4% for food away from home. ([Economic Research Service][1])

But I wouldn’t call the industry “healthy”

The biggest problem is the consumer’s wallet.

Grocery prices have risen roughly 33% since 2019, according to recent reporting, and consumers have responded with more couponing, comparison shopping, private-label purchases and trading down. ([AP News][3])

That creates a peculiar situation for produce:

> Retail prices can be healthy while industry economics aren’t necessarily healthy.

A lettuce grower may be receiving substantially more money than two years ago, but that doesn’t automatically mean margins are better if labor, fertilizer, packaging, cooling, transportation and compliance costs have also increased.

The biggest new concern: supply-chain and food-safety risk

This is where I’d actually score 2026 worse than 2024.

The recent Taylor Farms outbreaks have put renewed attention on the vulnerability of the North American produce supply chain, particularly the heavy dependence on Mexico. Reuters reports that U.S. fresh-produce imports from Mexico have grown dramatically and that FDA foreign-facility inspections declined in 2025. ([Reuters][4])

That creates a potentially significant reputational and demand risk for fresh produce, especially leafy greens and fresh-cut products.

My bottom line

I’d characterize the produce economy this way:

2024: 🟠 Fragile / recovering

2026: 🟢🟠 Improving, but uneven

The industry is more financially functional than it was two years ago, but I’d hesitate to call it robust because:

  • consumers remain highly price conscious;

  • retail buyers continue to emphasize value;

  • grower profitability varies enormously by commodity;

  • labor remains a structural problem;

  • tariffs and trade policy introduce uncertainty;

  • food-safety events can rapidly damage demand;

  • and higher retail prices don’t necessarily translate into higher grower margins.

If I were putting one question to produce executives today, it would be:

“Compared with two years ago, how would you rate the overall financial health of your produce business?”

Much better / Somewhat better / About the same / Somewhat worse / Much worse

That would be a particularly useful industry barometer right now because the macro data suggest improvement, while the experience at the grower-shipper level may be much more mixed.

[1]: https://ers.usda.gov/data-products/food-price-outlook/summary-findings?ncid=txtlnkusaolp00000618&utm_source=chatgpt.com “Food Price Outlook - Summary Findings | Economic Research Service”

[2]: https://www.ers.usda.gov/data-products/food-price-outlook/summary-findings?os=win&utm_source=chatgpt.com “Food Price Outlook - Summary Findings | Economic Research Service”

[3]: https://apnews.com/article/8468c1d6532ca762bbcfa17e3c7707d1?utm_source=chatgpt.com “Americans rewire their grocery shopping routines while digesting the biggest price jump in 50 years”

[4]: https://www.reuters.com/legal/litigation/taylor-farms-outbreaks-show-limits-us-ability-safeguard-produce-mexico-2026-08-13/?utm_source=chatgpt.com “Taylor Farms outbreaks show limits of US ability to safeguard produce from Mexico”

Read more

]]><![CDATA[Produce Executive Briefing - Aug. 25]]>https://tomkarst.substack.com/p/produce-executive-briefing-aug-25https://tomkarst.substack.com/p/produce-executive-briefing-aug-25Tue, 25 Aug 2026 11:03:16 GMTNew poll for the group: What is the biggest threat to grower/shipper profitability over the next 12 months?

  • Retail price pressure

  • Rising labor & production costs

  • Food-safety/recall risk

  • Trade, transportation & supply-chain costs

Fresh Produce Industry Discussion Group Newsletter is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

After 75 votes, the poll has closed for this question: Compared with two years ago, how would you rate the overall financial health of the produce business?

Much better: 3%

Somewhat better: 19%

Somewhat worse: 57%

Much worse; 21%

Check out The Packer’s coverage of the U.S. Apple Association estimate of the 2026 crop….

For your consideration, ChatGPT has assembled this news briefing….

ChatGPT: Produce Executive Briefing

Week ending August 25, 2026

Executive takeaway

The fresh produce industry is entering the end of August with three competing forces dominating the outlook: food-safety risk, consumer price sensitivity and increasingly aggressive retail competition.

The biggest immediate issue is the Cyclospora outbreak associated with iceberg lettuce, which is now clearly affecting consumer behavior beyond the recalled products themselves. More than 6.5 million U.S. households stopped buying salad mixes and kits, putting an estimated $280 million per month in produce spending at risk while the situation persists. ([Grocery Dive][1])

At the same time, Walmart is emphasizing its grocery price advantage, Target is seeing strong food-and-beverage growth, and young families are spreading purchases across more retail channels. That points to an increasingly competitive environment in which produce departments have to deliver both value and differentiation. ([Grocery Dive][2])

For growers and shippers, the picture is mixed: strawberries are tight, the 2026 apple crop is now projected below both last year and the five-year average, and tariff developments are adding another layer of uncertainty. ([Seashore Fruit & Produce Co.][3])

1. 🔴 Food safety is the industry’s biggest near-term demand risk

Cyclospora is hitting produce demand, not just salad companies

The FDA continues to investigate the multistate Cyclospora outbreak linked to iceberg lettuce. Recalled Taylor Fresh Foods iceberg lettuce was distributed across a very large portion of the country, including Kansas and Missouri, among many other states. ([U.S. Food and Drug Administration][4])

The consumer reaction is significant:

  • 6.5+ million households stopped buying salad mixes and kits.

  • 87% of produce shoppers were aware of the outbreak.

  • More than one-quarter of households reported stopping purchases of salads/fresh greens.

  • About 10% reduced their produce spending.

  • Estimated produce spending at risk: $280 million per month while the disruption continues.

Importantly, 82% of consumers who stopped buying salad mixes say they intend to return once the outbreak is contained. ([Supermarket News][5])

Executive implication

This looks more like a temporary demand shock than permanent category destruction—but the longer the outbreak remains in consumers’ minds, the greater the risk of substitution toward other vegetables, frozen products and prepared foods.

Watch: iceberg lettuce, salad kits, chopped salads, foodservice salads and fresh-cut suppliers.

2. Grower/Shipper: supply is becoming more uneven

Strawberries: a significant short-term squeeze

The strawberry market is currently experiencing a supply gap in California. A recent market report says demand exceeds supply, with very limited open-market fruit as shippers concentrate on contracts and existing commitments.

The Salinas/Watsonville region is experiencing a production gap following July heat, with Santa Maria production expected to improve the situation and Baja/Central Mexico becoming more important in September. ([Seashore Fruit & Produce Co.][3])

Implication: Strawberry prices and margins could remain elevated into early September, particularly for buyers dependent on open-market supplies.

Apples: 2026 crop is looking smaller

The latest USDA-related reporting puts the 2026 U.S. apple crop approximately 7% below 2025 and 3% below the five-year average, although some major states are waiting for post-harvest information before making further adjustments. ([The Packer][6])

This is particularly important because the industry is simultaneously dealing with questions about apple consumption and grower profitability.

A smaller crop can help prices, but it doesn’t automatically solve grower profitability if:

  • labor costs remain elevated,

  • packing costs rise,

  • retail price resistance limits FOB increases, or

  • consumers substitute toward lower-priced varieties.

Executive read: The apple industry may get some margin relief from supply discipline, but variety mix and retail execution will be critical.

Potatoes/onions: growers looking for stronger regional identity

A recent look at Idaho and eastern Oregon agriculture emphasized the opportunity to strengthen the identity and visibility of locally grown potatoes, onions and fruit. ([Capital Press][7])

This fits a broader 2026 trend: origin is increasingly becoming a marketing asset rather than merely a label. Retailers and state programs are investing more heavily in “homegrown” positioning. ([The Packer][8])

Opportunity for growers: origin + farmer story + variety + quality can create differentiation that commodity pricing alone cannot.

3. Wholesale/distribution: consolidation and supply discipline

Potandon expands its grower network

Potandon Produce has added Driscoll Farms to its Grower Alliance, strengthening its network of potato and onion growers supporting its Green Giant Fresh business. ([Bluebook Services][9])

The broader trend is important: distributors and marketers are increasingly trying to secure more reliable, vertically coordinated supply relationships rather than relying exclusively on spot markets.

That should benefit shippers able to offer:

  • predictable volume,

  • consistent quality,

  • proprietary varieties,

  • food-safety documentation,

  • year-round programs.

Terminal markets showing uneven supply

Recent USDA market reporting shows light to very light supplies for several vegetable categories, while terminal-market reports also show relatively light offerings in portions of the fruit market. ([IndexBox][10])

This reinforces an important late-summer theme:

> The produce market isn’t uniformly oversupplied or undersupplied. It is increasingly commodity- and region-specific.

That creates opportunities for wholesalers with strong sourcing networks—but makes broad assumptions about “the produce market” increasingly dangerous.

4. Retail: Walmart is making price its weapon

Walmart’s grocery business remains exceptionally strong

Walmart’s latest results show grocery continuing to be a major growth engine, with management emphasizing its price advantage over conventional grocers and saying those price gaps are widening. ([Grocery Dive][2])

This matters enormously for produce.

Walmart’s strategy creates pressure for conventional supermarkets to compete on:

  • price → promotions → private label → convenience → quality/differentiation

  • Produce is one of the few departments where retailers can visibly demonstrate price competitiveness every week.

The danger for growers

If retailers increasingly use produce as a traffic-driving value proposition, growers and shippers may face greater resistance to FOB increases even when production costs rise.

This is precisely the environment in which your grower profitability question becomes critical:

> Higher retail produce sales do not necessarily translate into higher grower profitability if the additional volume comes primarily from lower retail pricing.

5. Target is becoming more relevant to produce

Target reported 7.2% year-over-year growth in food and beverage sales in Q2, helping drive its broader turnaround. ([Grocery Dive][11])

That’s strategically important because Target is competing increasingly for the same consumer who shops at:

  • traditional supermarkets,

  • Walmart,

  • Costco,

  • Aldi,

  • specialty/natural retailers.

Produce implication: Target’s food growth increases the number of channels competing for fresh-produce dollars—and potentially increases the importance of attractive packaging, convenience and premium presentation.

6. Consumer behavior: the middle is getting squeezed

A new analysis of younger parents found that Gen Z families are spreading grocery purchases across more retail channels than other consumers. ([Grocery Dive][12])

Combine that with Walmart’s price push and ongoing inflation concerns and you get a difficult environment:

Consumers are not necessarily abandoning produce. They’re becoming much more deliberate about where and how they buy it.

That favors:

  • value packs,

  • promotions,

  • private label,

  • club packs,

  • convenience,

  • meal solutions,

  • high-quality premium varieties with a clear reason to pay more.

7. Foodservice: produce opportunity remains, but safety matters

The Cyclospora investigation has an especially important foodservice dimension because FDA confirmed distribution of recalled iceberg lettuce to foodservice customers across numerous states. ([U.S. Food and Drug Administration][4])

That makes foodservice operators particularly sensitive to:

  • supplier verification,

  • traceability,

  • lot-level visibility,

  • rapid recall capability,

  • alternative sourcing.

At the same time, the broader foodservice supply chain is moving toward greater integration and customization, with technology and supply-chain connectivity increasingly linking growers, distributors, retailers and foodservice buyers. ([The Packer][13])

Strategic implication

Foodservice may increasingly reward suppliers who can provide solutions rather than cases of commodity produce:

> chopped + portioned + consistent + traceable + labor-saving.

That continues to favor value-added suppliers.

8. Trade: another source of margin uncertainty

The U.S. has reinstated 50% tariffs on Canadian imports following unsuccessful negotiations, prompting a response from the International Fresh Produce Association. ([Bluebook Services][14])

For produce, tariffs are particularly problematic because supply chains are highly integrated across North America.

The key concern isn’t simply the tariff itself. It is the potential for:

tariff → higher landed cost → retail price increase → demand reduction → margin compression somewhere in the chain.

This is another reason produce companies should be watching landed cost and consumer elasticity, not simply FOB prices.

9. Other noteworthy developments

Mushroom promotion gets more funding

USDA approved an increase in the Mushroom Council assessment. The council voted unanimously in June to recommend the increase. ([Bluebook Services][15])

Why it matters: mushrooms are an interesting example of a category using generic promotion to build consumption rather than simply competing for existing demand.

Premium berries continue to expand

Oppy is expanding its Happy Berry brand into blueberries, with Peruvian fruit arriving in August. ([Bluebook Services][16])

This continues the industry’s broader movement toward branded/premium berry programs rather than treating berries solely as commodities.

Food waste technology

Produce Market Guide highlighted technology claiming substantial reductions in shrink through passive freshness technology. The company claims up to a 47% reduction in shrink. Those claims should obviously be independently validated, but the direction is notable. ([Produce Market Guide (PMG)][17])

Executive opportunity: with labor, transportation and produce costs high, even a small reduction in shrink can translate directly into margin improvement.

Executive Dashboard

| Area | Current signal | 30–90 day outlook

| Grower profitability | 🟡 Mixed | Margin pressure remains |

| Produce demand | 🟡 Cautiously positive | Volume vulnerable to price |

| Retail pricing | 🔴 Aggressive | Walmart intensifying value competition |

| Food safety | 🔴 High risk | Cyclospora remains major concern |

| Berries | 🟢 Tight supply | Potentially favorable seller market |

| Apples | 🟡 Smaller crop | Better pricing potential, but demand matters |

| Wholesale | 🟡 Uneven | Commodity-specific volatility |

| Foodservice | 🟡/🟢 Opportunity | Value-added and labor-saving products favored |

| Trade | 🔴 Uncertain | Tariffs remain a significant risk |

| Premium/branded produce | 🟢 Opportunity | Differentiation becoming more important |

| Shrink reduction | 🟢 Opportunity | Increasing ROI focus |

Five things I would watch next week

1. Cyclospora fallout

Does salad/leafy-green demand stabilize, or does the event begin affecting broader fresh-produce purchasing?

2. Walmart’s pricing strategy

Are competitors responding with deeper produce promotions? This could become a major issue for grower margins.

3. Strawberry supply

Watch the California transition closely. A prolonged supply gap could create an unusually strong late-August/early-September market.

4. 2026 apple crop and FOB pricing

The smaller crop creates a potential opportunity for growers—but only if retail prices can move without depressing consumption.

5. Tariff pass-through

Watch whether importers, wholesalers and retailers absorb Canadian tariff costs or push them down/up the supply chain.

Bottom line for produce executives

The central issue isn’t demand—it is profitable demand.

Produce consumption remains fundamentally healthy, but the industry is increasingly caught between consumers demanding value and growers demanding sustainable returns. Walmart’s increasingly aggressive price positioning makes that tension more acute. Meanwhile, food-safety events demonstrate how quickly a problem involving one commodity can damage demand for an entire category.

The strongest strategic opportunities appear to be premium varieties, differentiated brands, origin/farmer storytelling, value-added convenience, foodservice labor savings and measurable shrink reduction.

The biggest threats are food-safety contagion across categories, retail price compression, tariffs and the continued inability to pass higher production costs through the supply chain.

[1]: https://www.grocerydive.com/news/cyclospora-outbreak-produce-sales-numerator/828345/?utm_source=chatgpt.com “Cyclospora outbreak is crimping produce sales, data shows”

[2]: https://www.grocerydive.com/news/walmart-second-quarter-fiscal-2027-earnings-grocery/828292/?utm_source=chatgpt.com “Walmart touts low prices, meal offerings as key grocery levers”

[3]: https://seashoreeast.com/market-report/?utm_source=chatgpt.com “Market Report - updated August 19 ... - Seashore Fruit and Produce Co.”

[4]: https://www.fda.gov/food/outbreaks-foodborne-illness/investigation-multistate-outbreak-cyclospora-illnesses-iceberg-lettuce-july-2026?utm_source=chatgpt.com “Multistate Outbreak of Cyclospora Illnesses: Iceberg Lettuce July 2026”

[5]: https://www.supermarketnews.com/fresh-produce/over-6-5m-households-are-not-buying-salad-mixes-and-kits?utm_source=chatgpt.com “Over 6.5M households are not buying salad mixes and kits”

[6]: https://www.thepacker.com/?utm_source=chatgpt.com “The Packer — Fresh produce industry’s leading news source ...”

[7]: https://capitalpress.com/2026/08/20/cali-hipp-is-bullish-on-idaho-east-oregon-spuds-onions-fruit/?utm_source=chatgpt.com “Cali Hipp is bullish on Idaho, East Oregon hops, onions, fruit”

[8]: https://www.thepacker.com/news/industry-amps-homegrown-branding-capitalize-rising-local-produce-demand?utm_source=chatgpt.com “Industry Amps Up Homegrown Branding to Capitalize on Rising ...”

[9]: https://www.bluebookservices.com/potandon-produce-adds-another-potato-grower-shipper-to-grower-alliance/?utm_source=chatgpt.com “Potandon Produce adds another potato grower-shipper to Grower Alliance”

[10]: https://www.indexbox.io/blog/columbia-shipping-point-vegetables-prices-report-august-18-2026/?utm_source=chatgpt.com “Columbia Shipping Point Vegetables Prices Report – August 18, 2026 | USDA Market News - News and Statistics”

[11]: https://www.grocerydive.com/news/target-second-quarter-2026-earnings-grocery-food-beverage/828268/?utm_source=chatgpt.com “Target’s turnaround gains steam as grocery sales power ahead”

[12]: https://www.grocerydive.com/news/younger-parent-shoppers-loyalty-promotions-grocery/828546/?utm_source=chatgpt.com “Grocers need to pivot as Gen Z families enter the mainstream, report finds”

[13]: https://www.thepacker.com/news/foodservice/future-foodservice-driven-supply-chain-integration-and-customization?utm_source=chatgpt.com “The Future of Foodservice Driven by Supply Chain Integration and Customization”

[14]: https://www.bluebookservices.com/canada-tariffs-resume-after-unsuccessful-negotiations/?utm_source=chatgpt.com “Canada tariffs resume after unsuccessful negotiations”

[15]: https://www.bluebookservices.com/usda-approves-mushroom-council-assessment-increase/?utm_source=chatgpt.com “USDA approves Mushroom Council assessment increase”

[16]: https://www.bluebookservices.com/oppy-expands-happy-berry-brand-into-blueberries/?utm_source=chatgpt.com “Oppy expands Happy Berry brand into blueberries”

[17]: https://www.producemarketguide.com/news?utm_source=chatgpt.com “Latest Fresh Produce News & Insights”

]]><![CDATA[Mexican stone fruit - A summary]]>https://tomkarst.substack.com/p/mexican-stone-fruit-a-summaryhttps://tomkarst.substack.com/p/mexican-stone-fruit-a-summaryMon, 24 Aug 2026 11:40:41 GMT

I asked ChatGPT to summarize a recent USDA FAS report on Mexican stone fruit…

Fresh Produce Industry Discussion Group Newsletter is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

ChatGPT: Mexico Stone Fruit Annual — Key Takeaways

1. Mexico’s peach crop is headed lower

USDA/FAS forecasts 2026 Mexican peach production at 255,000 metric tons, down 5% from 2025.

The decline is attributed primarily to:

Adverse weather

Lower/stagnant yields

Weak domestic demand

Continued production challenges in Mexico’s major growing regions

That is a significant change from the 2024 outlook, when FAS was forecasting production growth to 266,400 MT on steady domestic demand. ([PublicNow][1])

2. The U.S. is positioned to benefit from increased Mexican imports

Despite declining Mexican production, peach imports are forecast to increase 7% in 2026.

The United States remains the dominant supplier.

That creates an interesting market dynamic:

> Mexico’s domestic peach supply is shrinking while its dependence on imported peaches is increasing.

For U.S. peach growers and shippers, Mexico therefore represents an important counter-seasonal and supplemental demand opportunity.

3. Cherries are an even stronger U.S. opportunity

Mexico’s domestic sweet-cherry production remains very limited.

The report says the United States supplies more than 80% of Mexico’s cherry imports. ([PublicNow][1])

That is an unusually strong market position.

The implication is that Mexico is essentially a structural import market for cherries, rather than a significant domestic producer.

4. Domestic demand is the weak link

The report’s reference to stagnant domestic demand is important.

Mexico has a large population and a growing modern retail sector, but stone fruit consumption isn’t necessarily expanding fast enough to absorb higher prices.

This creates a dilemma:

Lower domestic production → greater import requirement

but

Weak consumer demand → limited ability to push prices substantially higher.

So import growth may be more about filling supply gaps than about a major expansion in per-capita consumption.

---

What this means for U.S. produce

I’d characterize the report as moderately bullish for U.S. stone-fruit exporters, particularly cherries.

| Commodity | Mexico production | Import outlook | U.S. opportunity |

| Peaches | ↓ 5% | ↑ 7% | Positive |

| Nectarines | Less significant | Import market | Positive |

| Sweet cherries | Very limited | Strong import dependence | Very positive |

The biggest opportunity: cherries

The fact that the U.S. already has 80%+ of Mexico’s cherry import market is particularly important.

This isn’t a market where U.S. exporters have to displace Chile, Peru or another major supplier. Instead, the challenge is more about:

expanding the consumer base;

maintaining quality;

keeping cherries affordable;

extending the marketing window;

strengthening retail promotion.

---

One important strategic point

I think the report also illustrates a broader trend in North American produce:

Mexico is simultaneously becoming a major producer/exporter of many fruits and an increasingly important importer of U.S. produce.

That can seem contradictory, but it makes sense.

Mexico has enormous production advantages for certain commodities and seasons, but weather, geography and varietal differences mean that domestic production doesn’t eliminate the need for imports.

For U.S. growers, Mexico should therefore increasingly be viewed not simply as a competitor, but also as a high-value customer.

My bottom line

The 2026 Mexico stone-fruit report is good news for U.S. shippers, but especially for cherries.

The combination of lower Mexican peach production + higher peach imports + extremely limited domestic cherry production + >80% U.S. cherry import share makes Mexico one of the more attractive nearby export markets for U.S. stone fruit.

The constraint is consumer demand and price sensitivity, rather than access to the market.

[USDA FAS Mexico Stone Fruit Annual — MX2026-0042](https://www.fas.usda.gov/data/gain-report/2026/08/Stone%20Fruit%20Annual_Guadalajara_Mexico_MX2026-0042.pdf?utm_source=chatgpt.com)

If you’re looking at this from a U.S. grower/shipper perspective, the next useful analysis would be to compare Mexico’s 2026 peach/cherry import demand with U.S. production and exports, including which U.S. states and shippers are best positioned to capture the opportunity.

[1]: https://www.publicnow.com/view/378DF5CB872DBA9581D8A70D1603654849A5CB63?utm_source=chatgpt.com “FAS - Foreign Agricultural Service (via Public) / Mexico: Stone Fruit Annual”

Leave a comment

]]><![CDATA[The path forward to increased apple grower profitability - ChatGPT has a take]]>https://tomkarst.substack.com/p/the-path-forward-to-increased-applehttps://tomkarst.substack.com/p/the-path-forward-to-increased-appleFri, 21 Aug 2026 11:52:43 GMTCheck out The Packer’s coverage of the 2026 Apple Person of the Year.

Let’s look at some recent coverage on apple grower profitability, courtesy of ChatGPT…

Fresh Produce Industry Discussion Group Newsletter is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

ChatGPT: There has been a noticeable run of reporting in 2026 on the squeeze facing U.S. apple growers, with a fairly consistent message: prices are improving in some segments, but labor, production, capital and packing costs are still leaving many orchards below economic break-even.

Here are the stories I would put on your reading list:

1. AgWest Farm Credit — Apple producers: Slightly unprofitable, bullish 12-month outlook

June 10, 2026

This is probably the most useful current profitability snapshot. AgWest rates apple producers as “slightly unprofitable” today but bullish over the next 12 months. The key reason is the expectation for a 2026 crop that is smaller and closer to historical averages, which should provide better price support. ([Default][1])

[AgWest Farm Credit — Apples](https://www.agwestfc.com/education-and-resources/industry-and-economic-insights/industry-insights/apples?utm_source=chatgpt.com)

Why it matters: It provides a good framework for your earlier question about whether the 2026 smaller crop can finally restore grower profitability.

2. Tri-Cities Area Journal — Apple growers balance stronger prices against mounting costs

June 15, 2026

This is probably the best recent article specifically about grower economics. Washington growers are more optimistic because of stronger premium-variety prices and a smaller crop, but the article quotes Washington Apple Commission President Michael Schadler saying that prices in many cases still aren’t high enough to generate a profit. ([Tri-Cities Business News][2])

The article also estimates that the 2026 Washington crop could be about 10% below 2025, potentially improving the supply/demand balance. Labor costs and trade uncertainty remain major concerns. ([Tri-Cities Business News][2])

[Tri-Cities Area Journal — Apple growers balance stronger prices against mounting costs](https://tricitiesbusinessnews.epublishing.net/articles/focus-2026-apples?utm_source=chatgpt.com)

My takeaway: This is a strong piece to cite if you’re making the argument that better apple prices do not automatically equal better orchard economics.

3. FreshFruitPortal / Agronometrics — Labor costs now consume up to 70% of U.S. apple growers’ wholesale price

May 28, 2026

This one gets directly at the labor economics. It argues that rising labor costs, falling wholesale prices and weather pressures are squeezing U.S. growers, with labor consuming as much as 70% of the wholesale price in some situations. ([FreshFruitPortal.com][3])

[FreshFruitPortal — Labor costs now consume up to 70% of U.S. apple growers’ wholesale price](https://www.freshfruitportal.com/news/2026/05/28/aapple-growers-us/?utm_source=chatgpt.com)

Why it matters: If you’re thinking about what has to change structurally, labor productivity and H-2A costs are arguably among the most important variables.

4. Washington State University — 2024 Apple Costs and Returns Production Studies

Released May 2025; still highly relevant in 2026

This is less of a news story and more of a hard economics reference. WSU’s cost-and-return studies for Gala, Granny Smith, Honeycrisp and Cosmic Crisp found that Gala and Granny Smith were producing negative returns over variable costs under the study’s assumptions. ([WSU Tree Fruit][4])

[Washington State University — Apple Costs and Returns Studies](https://treefruit.wsu.edu/article/2024-apple-costs-and-returns-production-studies/?utm_source=chatgpt.com)

Why I like this one: It moves the discussion from anecdotal complaints about profitability to actual variety-level economics.

5. FreshPlaza — Washington apple crop may be 10% smaller in 2026

June 2026

This is another useful industry-oriented story covering the smaller crop and its potential effect on grower economics. It reports that stronger pricing and more disciplined harvesting improved conditions, but growers still face production costs that are too high for many orchards to achieve acceptable returns. ([FreshPlaza][5])

[FreshPlaza — Washington apple crop may be 10% smaller in 2026](https://www.freshplaza.com/asia/article/9847583/washington-apple-crop-may-be-10-smaller-in-2026/?utm_source=chatgpt.com)

6. FreshPlaza — Washington apple crop developed into a tale of two seasons

February 10, 2026

This is particularly interesting from a variety/size/packout perspective. It reported stronger pricing for certain sizes and organic programs, while noting that higher producer pricing still wasn’t necessarily translating into favorable orchard economics because of labor, production costs, capital costs and prior oversupply. ([FreshPlaza][6])

[FreshPlaza — Washington apple crop developed into a tale of two seasons](https://www.freshplaza.com/north-america/article/9809512/washington-apple-crop-developed-into-a-tale-of-two-seasons/?utm_source=chatgpt.com)

7. Michigan Apples — Cost of Production

This is worth reading because it shows that the profitability problem isn’t exclusively a Washington issue. Michigan Apples says labor represents nearly 60% of Michigan apple production costs, and its 2025 cost analysis estimated total costs 33% above projected returns for the representative operation. ([Michigan Apples][7])

[Michigan Apples — Industry Issues / Cost of Production](https://www.michiganapples.com/about/issues/?utm_source=chatgpt.com)

8. Michigan Ag Today — Michigan Apple Growers to Receive Fast-Tracked Crop Insurance Payments

July 8, 2026

This is important because of the historic late-April freeze affecting Michigan and other Midwestern/Mid-Atlantic orchards. USDA moved to accelerate crop-insurance payments, recognizing the severe cash-flow problems created by crop losses. ([Michigan Ag Today][8])

[Michigan Ag Today — USDA Fast-Tracking Michigan Apple Crop Insurance Payments](https://www.michiganagtoday.com/2026/07/08/usda-fordyce-michigan-apple-growers/?utm_source=chatgpt.com)

The bigger profitability story

Putting these together, I’d characterize the 2026 apple grower situation this way:

| Factor | 2026 direction | Profitability impact |

| Crop size | ↓ | Positive |

| Fresh apple prices | ↑ in several segments | Positive |

| Premium varieties | Better pricing | Strong positive |

| Labor costs | ↑ | Strong negative |

| H-2A costs | High | Negative |

| Energy/inputs | High | Negative |

| Capital costs | High | Negative |

| Export uncertainty/tariffs | High | Negative |

| Packouts/quality | Highly variable | Mixed |

| Older varieties | Structural demand pressure | Negative |

| Organic/premium programs | Better opportunities | Positive |

The most important emerging theme, in my view, is that the industry may be moving from an “oversupply problem” to a “cost structure problem.” A smaller 2026 crop can improve prices, but growers still need the price × packout × yield combination to rise enough to cover a fundamentally higher cost base.

And that’s why the AgWest assessment — “slightly unprofitable” today but bullish over 12 months — is particularly interesting. ([Default][1])

If you’re looking at this from an investment/industry strategy perspective, I think the next useful step would be to build a 2026 apple grower profitability model by variety (Gala, Honeycrisp, Cosmic Crisp, Granny Smith, Pink Lady, etc.) showing estimated break-even $/lb and where current market prices sit relative to break-even.

[1]: https://www.agwestfc.com/education-and-resources/industry-and-economic-insights/industry-insights/apples?utm_source=chatgpt.com “Apples - AgWest Farm Credit”

[2]: https://tricitiesbusinessnews.epublishing.net/articles/focus-2026-apples?utm_source=chatgpt.com “Apple growers balance stronger prices against mounting costs | Tri-Cities Area Journal of Business”

[3]: https://www.freshfruitportal.com/news/2026/05/28/aapple-growers-us/?utm_source=chatgpt.com “Labor consumes excessive 70% of US apple growers’ wholesale price - FreshFruitPortal.com”

[4]: https://treefruit.wsu.edu/article/2024-apple-costs-and-returns-production-studies/?utm_source=chatgpt.com “2024 Apple Costs and Returns Production Studies | WSU Tree Fruit | Washington State University”

[5]: https://www.freshplaza.com/asia/article/9847583/washington-apple-crop-may-be-10-smaller-in-2026/?utm_source=chatgpt.com “Washington apple crop may be 10% smaller in 2026”

[6]: https://www.freshplaza.com/north-america/article/9809512/washington-apple-crop-developed-into-a-tale-of-two-seasons/?utm_source=chatgpt.com “Washington apple crop developed into a tale of two seasons”

[7]: https://www.michiganapples.com/about/issues/?utm_source=chatgpt.com “Michigan Apple Industry Issues - Michigan Apples”

[8]: https://www.michiganagtoday.com/2026/07/08/usda-fordyce-michigan-apple-growers/?utm_source=chatgpt.com “USDA’s Fordyce: Michigan Apple Growers to Receive Fast-Tracked Crop Insurance Payments After Historic Freeze | Michigan Ag Today”

What is the best way forward to increase apple growers' profitability?

ChatGPT: The best path forward is not simply to get higher apple prices. The industry has a structural problem: supply has been running ahead of demand while labor and other costs have risen faster than grower revenue. Farm Credit East calls 2026 an “inflection point” and says current economics are unsustainable for many growers without changes in costs, pack-out, demand or supply. ([Farm Credit East][1])

I would rank the opportunities this way:

1. Reduce low-return production — probably the biggest opportunity

This is the most important lever.

Washington has been producing very large crops while growers struggle to get adequate returns. Industry observers have explicitly cited oversupply and too many varieties as major problems. ([Growing Produce][2])

The objective shouldn’t be simply “grow fewer apples.” It should be:

Eliminate acres that consistently generate inadequate returns and redirect capital toward varieties/orchards with superior returns per acre.

For example, an orchard producing 80,000 lb/acre at $0.30/lb isn’t necessarily better than one producing 65,000 lb/acre at $0.50/lb.

I’d shift the industry’s KPI from:

> Yield per acre

to:

> Net return per acre after harvest, packing, storage and selling costs.

That could lead to significantly more disciplined production.

2. Accelerate varietal transition

This may be the best individual-farm strategy.

The industry has too much volume in mature commodity varieties and not enough differentiation. Premium varieties can generate substantially better consumer and grower economics, although they also involve higher establishment and management costs.

The WSU cost-and-return studies now provide economics for Gala, Granny Smith, Honeycrisp and Cosmic Crisp, which is exactly the type of analysis growers need before deciding what to plant. ([WSU Tree Fruit][3])

I’d evaluate every variety using:

Net revenue/acre = yield × realized price × packout − all production/packing/storage/marketing costs.

And importantly, use five-year expected returns, not the best price from the previous season.

3. Make packout a primary profitability target

This is an underappreciated opportunity.

Suppose two orchards each produce 100,000 pounds:

Orchard A: 75% fresh packout

Orchard B: 85% fresh packout

If fresh apples are worth substantially more than processing apples, Orchard B can generate dramatically more revenue without producing another pound of fruit.

That makes investment in:

precision crop load management

thinning

canopy management

irrigation

disease control

harvest timing

fruit sizing

minimizing bruising

potentially more profitable than simply increasing yield.

The industry needs to think about “value per acre,” not pounds per acre.

4. Attack labor cost aggressively—but through productivity, not simply lower wages

Labor is now the largest production cost for many apple growers, and Farm Credit East identifies labor as a central reason current economics are difficult. ([Farm Credit East][4])

That makes mechanization particularly attractive.

I would prioritize:

1. Automated/assisted pruning

2. Mechanical or precision thinning

3. Harvest platforms

4. Computer vision for crop estimation

5. Automated sorting/grading

6. Robotic harvesting where economics work

The goal isn’t necessarily to eliminate workers. It’s to increase pounds of high-value fruit produced per labor hour.

This is particularly important because labor costs have risen dramatically while grower selling prices have not kept pace. ([Cascade PBS][5])

5. Increase demand rather than relying on retailer price increases

This is where I think the industry has a major opportunity.

The industry needs to grow the total apple category, not simply fight retailers over a larger share of a stagnant category.

The Washington Apple Commission already focuses on advertising, promotion and market development in more than 30 countries. ([Washington Apples][6])

I’d put more emphasis on:

snacking

school nutrition

convenience

sliced apples

kids’ lunches

breakfast

smaller packages

premium eating experiences

variety discovery

nutritional benefits

apples as an affordable alternative to other snacks

A 3–5% increase in domestic apple consumption could potentially have a much greater impact on grower economics than squeezing another penny or two out of retailers.

6. Rebuild export demand

This is particularly important for Washington.

Nearly 30% of Washington’s apple harvest has historically been exported, so international market access has an enormous impact on domestic supply. ([PR Newswire][7])

More exports effectively remove pounds from the domestic market, which can improve returns on the remaining domestic crop.

The industry should aggressively pursue:

Mexico

Canada

India

Southeast Asia

Middle East

Central America

while addressing tariffs, phytosanitary barriers and logistics.

7. Change the grower–retailer pricing relationship

I think this is the biggest structural opportunity, but also the hardest.

Growers currently bear enormous production risk while retail pricing is often driven by promotions and competition.

I’d like to see more:

multi-year grower/retailer contracts + minimum price floors + volume commitments + quality incentives.

For example:

> Base price + variety premium + packout premium + quality premium + promotional incentive.

That gives the grower some downside protection while giving the retailer reliable supply.

It also creates incentives for growers to produce what consumers actually want.

---

My recommended “Apple Profitability 2030” formula

If I were advising the U.S. apple industry, I’d set a target around five levers:

| Lever | Target |

| Reduce low-return acreage | 5–10% |

| Increase premium-variety share | +10–15 percentage points |

| Improve fresh packout | +3–5 points |

| Reduce labor cost per packed lb. | 10–20% |

| Increase domestic/export demand | +3–5% |

The key is that these initiatives compound.

A grower doesn’t need a 20% increase in apple prices if they can simultaneously get:

+8% realized price + 5% higher packout + 10% lower labor cost/lb + better variety mix.

That could produce a much larger improvement in net income.

My ranking

1. Remove chronically unprofitable production

2. Transition acreage to higher-return varieties

3. Improve packout and fruit quality

4. Reduce labor cost per saleable pound through mechanization

5. Grow domestic consumption

6. Expand exports

7. Develop better grower-retailer contracts

The central issue is that the industry cannot cost-cut its way entirely out of this problem. Labor efficiency is essential, but if the industry continues producing more apples than consumers will pay an attractive price for, productivity gains will simply produce more low-margin apples.

The fundamental objective should therefore be:

> Fewer low-value pounds + more high-value pounds + lower cost per saleable pound + stronger demand.

That is, in my view, the most realistic route to restoring sustainable apple grower profitability. ([Farm Credit East][1])

[1]: https://www.farmcrediteast.com/en/resources/Industry-Trends-and-Outlooks/Reports/2604KEP_AppleOutlook?utm_source=chatgpt.com “U.S. Apple Industry Hits Latest Inflection Point”

[2]: https://www.growingproduce.com/fruits/apples-pears/bumper-crops-but-bruised-bottom-lines-for-apple-growers/?utm_source=chatgpt.com “Bumper Crops But Bruised Bottom Lines for Apple Growers”

[3]: https://treefruit.wsu.edu/article/2024-apple-costs-and-returns-production-studies/?utm_source=chatgpt.com “2024 Apple Costs and Returns Production Studies”

[4]: https://www.farmcrediteast.com/en/resources/todays-harvest-Blog/260519AppleOutlookHighSupplyTightMargins?utm_source=chatgpt.com “2026 Apple Outlook: High Supply with Tight Margins”

[5]: https://www.cascadepbs.org/all/2025/07/wa-fruit-growers-rely-on-h-2a-visa-program-despite-flaws-costs/?utm_source=chatgpt.com “WA fruit growers rely on H-2A visa program despite flaws, ...”

[6]: https://waapple.org/about/?utm_source=chatgpt.com “About Washington Apple Commission”

[7]: https://www.prnewswire.com/news-releases/washington-state-tree-fruit-association-releases-2025-washington-apple-harvest-forecast-302524105.html?utm_source=chatgpt.com “Washington State Tree Fruit Association Releases 2025 ...”

What are the "best bets" for premium apple varieties that growers can feel good about investing in?

ChatGPT: If I were advising a grower making a 10–20 year orchard investment decision in 2026, I would be selective. I would not simply plant whatever variety currently commands the highest price.

My current “best bets” would be:

My 2026 premium-variety ranking

| Rank | Variety | Investment view | Why |

| 1 | Cosmic Crisp® | 🟢 Best overall bet | Strong consumer proposition, excellent storage, growing volume, Washington-developed |

| 2 | Honeycrisp | 🟢 Best proven premium | Huge consumer recognition and established premium, but supply/quality risks |

| 3 | Ambrosia | 🟢 Strong niche bet | Sweet flavor, attractive eating quality, relatively favorable supply/demand |

| 4 | Envy® | 🟢 Strong premium niche | Excellent eating quality and branding; controlled supply supports differentiation |

| 5 | Pink Lady®/Cripps Pink | 🟡 Good, but mature | Proven consumer demand and long marketing season, but increasingly substantial supply |

| 6 | EverCrisp® | 🟡 Interesting Midwest/East bet | Good storage and eating quality; particularly interesting geographically |

| 7 | SweeTango® | 🟡 High-quality niche | Strong consumer experience, but licensing/production economics matter |

| 8 | Kanzi® / other club varieties | 🟡 | Attractive concept, but I’d want stronger U.S. volume evidence before major acreage |

1. Cosmic Crisp is my 1

If I had to pick one variety for a grower in Washington, Cosmic Crisp would probably be my first choice.

The most encouraging thing is not just its retail price—it is consumer positioning plus supply-chain characteristics.

USApple’s March 2026 inventory data show Cosmic Crisp inventories at 4.54 million 42-lb bushels, versus a five-year average of 2.56 million. That’s a huge increase, but the variety is still overwhelmingly directed toward fresh consumption. ([Fruit Growers News][1])

That tells me two things:

Positive: Cosmic Crisp has developed into a meaningful commercial variety.

Risk: It is no longer scarce. Growers cannot assume the early “new variety premium” will persist indefinitely.

So I’d still plant it—but I would not chase it aggressively at any price.

2. Honeycrisp remains a very good bet—but it’s no longer a blank check

Honeycrisp has something many newer club varieties don’t:

Consumers already know and actively seek it.

That’s incredibly valuable.

But supply has expanded substantially. March 2026 holdings were 7.43 million 42-lb bushels, versus a five-year average of 7.06 million. ([Fruit Growers News][1])

The bigger concern is that Honeycrisp can be expensive to produce and difficult to grow consistently.

So my view is:

> Excellent variety—but only on sites where growers can consistently produce premium size, color, firmness and eating quality.

I would rather have a high-performing Honeycrisp block than a mediocre one.

3. Ambrosia is one I would watch closely

Ambrosia is particularly interesting because it has the characteristics retailers want:

Sweet

Crisp

Attractive appearance

Easy consumer proposition

Strong fresh-market orientation

USApple’s January 2025 inventory data showed Ambrosia with 308,140 controlled-atmosphere bushels, versus a five-year average of 281,331—so supply is growing, but it hasn’t experienced the enormous expansion seen in some newer varieties. ([USApple][2])

I would call Ambrosia a “quiet winner” candidate rather than a blockbuster.

4. Envy is attractive because it is differentiated

Envy has a very different proposition from Cosmic Crisp:

Cosmic Crisp = broad mass-market premium.

Envy = premium branded eating experience.

The January 2025 data showed Envy inventories of roughly 662,857 42-lb bushels, with fresh inventory making up the overwhelming majority. ([USApple][2])

That is still a relatively small supply base compared with Gala, Fuji, Honeycrisp or Granny Smith.

That’s attractive to me.

The downside is that club/managed varieties require disciplined marketing and licensing, so growers should evaluate the contract—not just the variety.

The one I’d be careful about: Pink Lady

I like Pink Lady as a variety.

But I wouldn’t characterize it as a high-upside new investment anymore.

USApple’s 2025 data show substantial Pink Lady/Cripps Pink inventories, including ~1.16 million 42-lb bushels in June 2025, with nearly 1 million going to fresh. ([USApple][3])

It’s a proven variety, but the question for a new planting is:

> Can it generate a sufficiently high return on the land compared with a newer premium variety?

That’s a much harder question.

The really important distinction: “best variety” vs. “best orchard investment”

I would actually divide the market into three categories:

🟢 Tier 1 — I would seriously consider planting

Cosmic Crisp

Honeycrisp

Ambrosia

Envy

These have the combination of consumer recognition + premium positioning + commercial scale that I think gives growers the best risk/reward.

🟡 Tier 2 — Selective opportunities

EverCrisp

SweeTango

Pink Lady

Kanzi and similar club varieties

I’d consider these depending heavily on region, grower expertise, contract terms and expected packout.

🔴 Tier 3 — I would generally avoid new large-scale investment

Red Delicious

Golden Delicious

Rome

Idared

traditional low-priced Gala/Fuji blocks

That doesn’t mean these are bad apples. It means I wouldn’t want to make a 20-year capital investment based primarily on commodity varieties whose supply is relatively easy to expand and whose consumer differentiation is limited.

But here’s the strategy I like best

I wouldn’t put 100% of a new orchard into one club variety.

I’d use something like:

40% proven premium — Honeycrisp/Cosmic Crisp

30% emerging premium — Ambrosia/Envy/EverCrisp

20% proven complementary variety — Pink Lady/Fuji/etc.

10% experimental/new variety

That creates a portfolio of varieties, just like an investment portfolio.

And I’d make one criterion non-negotiable:

Don’t plant a premium variety unless the economics work at a conservative price.

For example, I’d model:

$0.45/lb, $0.55/lb and $0.65/lb grower returns

rather than assuming the grower will receive today’s premium price.

I’d also model 70%, 80% and 90% fresh packout.

That’s because the biggest mistake I see in evaluating premium apples is looking at the retail price rather than the grower’s net return per acre.

My bottom line

If you asked me today, “Where would you put $10 million of new apple-orchard capital?”, I’d put the majority into Cosmic Crisp, Honeycrisp, Ambrosia and Envy, but I would be especially disciplined about site selection and contracted marketing.

Cosmic Crisp is my 1 growth bet.

Honeycrisp is my 1 proven premium bet.

Ambrosia is my 1 underappreciated bet.

Envy is my 1 differentiated club-variety bet.

And I would not plant a premium variety simply because it has a premium retail price. The key question is whether the premium survives all the way back to the grower after packout, storage, licensing, marketing and production costs.

If you want, I can next build a 10-year “apple variety investment scorecard” for 15 major varieties, scoring each on consumer demand, supply growth, grower price potential, production cost, packout, storage, licensing risk and expected ROI per acre.

[1]: https://fruitgrowersnews.com/wp-content/uploads/sites/5/2026/03/USAppleTracker-MAR-2026-FINAL.pdf?utm_source=chatgpt.com “MAR. 2026 VOL 32. ISSUE 05”

[2]: https://usapple.org/wp-content/uploads/2025/02/USAppleTracker-FEB-2025.pdf?utm_source=chatgpt.com “Sponsored by”

[3]: https://usapple.org/wp-content/uploads/2025/07/USAppleTracker-JUL-2025.pdf?utm_source=chatgpt.com “JULY 2025 VOL 31. ISSUE 09”

Leave a comment

]]><![CDATA[Apple production 2026 - USDA estimate summary and part 1 of extended remarks by ChatGPT]]>https://tomkarst.substack.com/p/apple-production-2026-usda-estimatehttps://tomkarst.substack.com/p/apple-production-2026-usda-estimateThu, 20 Aug 2026 14:42:57 GMTI asked ChatGPT to examine the USDA’s Crop Production report, with a view to summarizing the 2026 apple production forecast….

Fresh Produce Industry Discussion Group Newsletter is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

ChatGPT: For the apple numbers you are likely looking for, USDA/NASS’s August 12, 2026 Crop Production report provides the 2025 final/updated commercial crop and the August 1, 2026 forecast. ([Esmis][2])

U.S. apple production: 2025 vs. 2026 forecast

Million pounds

| State | 2025 | 2026 forecast | Change |

| Washington | 7,540 | 7,400 | -1.9% |

| New York | 1,495 | 1,350 | -9.7% |

| Michigan | 1,065 | 1,050 | -1.4% |

| Pennsylvania | 505 | 210 | -58.4% |

| Oregon | 159.5 | 160 | +0.3% |

| California | 188.5 | 190 | +0.8% |

| Virginia | 149 | 77 | -48.3% |

| United States | 11,102 | 10,437 | -6.0% |

([Esmis][2])

What stands out

The 2026 U.S. crop is forecast at 10.44 billion pounds, down about 665 million pounds (-6.0%) from 2025.

Washington remains overwhelmingly dominant, accounting for about 71% of the U.S. crop at 7.4 billion pounds.

New York is down nearly 10%, but remains the second-largest producing state.

The biggest negative surprises are Pennsylvania (-58%) and Virginia (-48%). Together, they account for roughly 367 million pounds of the national decline.

Washington’s relatively modest 1.9% decline means the national reduction is being driven disproportionately by the Eastern states.

California and Oregon are essentially flat to slightly higher.

Industry takeaway

The headline is a moderately smaller 2026 U.S. apple crop rather than a major Washington supply problem. The 6% national decline should provide some support to apple pricing, but the impact will vary considerably by variety and region. Washington’s 7.4-billion-pound crop is still very large, so the national market does not appear to be facing a broad supply shortage.

USDA’s Washington state data independently shows 7.4 billion pounds for 2026, confirming the August forecast. ([NASS][3])

[1]: https://esmis.nal.usda.gov/sites/default/release-files/795725/cropan26.pdf “Crop Production 2025 Summary 01/12/2026”

[2]: https://esmis.nal.usda.gov/sites/default/release-files/796015/crop0826.pdf?utm_source=chatgpt.com “Crop Production 08/12/2026”

[3]: https://www.nass.usda.gov/Quick_Stats/Ag_Overview/stateOverview.php?state=Washington&year=2026&utm_source=chatgpt.com “USDA/NASS 2026 State Agriculture Overview for Washington”

Break down 2026 apple production by state vs. the 5-year average

ChatGPT: Using USDA commercial apple production data, the 2026 U.S. crop looks much closer to a normal-to-above-normal crop overall than the 6% year-over-year decline suggests. The weakness is concentrated in Pennsylvania and Virginia, while Washington and New York are above their recent averages.

I calculated the five-year average using 2021–2025 production and compared it with USDA’s August 2026 forecast. USDA’s August 2026 report puts the 2026 U.S. crop at 10.437 billion pounds, versus 11.102 billion in 2025. ([Esmis][1])

2026 apple crop vs. 2021–25 average

Million pounds

| State | 5-year avg. 2021–25 | 2026 forecast | vs. 5-year avg. | Interpretation |

| Washington | 6,924 | 7,400 | +6.9% | 🟢 Above average |

| New York | 1,316 | 1,350 | +2.6% | 🟢 Slightly above |

| Michigan | 1,075 | 1,050 | -2.3% | 🟡 Near average |

| Pennsylvania | 469 | 210 | -55.2% | 🔴 Very low |

| Oregon | 139 | 160 | +14.9% | 🟢 Above average |

| California | 188 | 190 | +1.3% | 🟢 Near average |

| Virginia | 185 | 77 | -58.3% | 🔴 Very low |

| U.S. total | 10,296 | 10,437 | +1.4% | 🟢 Slightly above average |

USDA’s historical reports show the large swings in production from year to year—particularly in Washington and Michigan. For example, Washington went from 6.14 billion pounds in 2022 to roughly 7.6 billion in 2023. ([USDA Downloads][2])

The important story is Washington

Washington’s 7.4 billion pounds is actually 6.9% above its 2021–25 average.

That is significant because Washington represents roughly 71% of the projected 2026 U.S. crop.

So although the national crop is down 6% from 2025, the country’s dominant apple-producing region is not experiencing a short crop. Washington’s 2026 crop is considerably larger than its 2021–22 production, and only modestly below the very large 2025 crop.

Where the national decline is coming from

The two major outliers are:

Pennsylvania: -55% vs. five-year average

2026 forecast: 210 million pounds

Virginia: -58% vs. five-year average

2026 forecast: 77 million pounds

Together, those two states are about 367 million pounds below their five-year averages.

That’s more than twice the 141-million-pound amount by which the U.S. crop is above its five-year average. In other words, the national picture is being distorted substantially by weakness in these smaller Eastern states.

What I think this means for the apple market

I’d characterize the 2026 crop this way:

National supply: 🟢 Adequate

Washington: 🟢 Strong

New York: 🟢 Normal/slightly strong

Michigan: 🟡 Normal

Pacific Northwest overall: 🟢 Favorable

Eastern apple states: 🔴 Tight

The key market implication is that 2026 should not be viewed as a nationwide apple shortage year. Washington alone is forecast to produce 476 million pounds more than its five-year average, which offsets much of the production loss elsewhere.

And there is an interesting contrast with 2025: USDA says the 2025 U.S. crop reached 11.102 billion pounds, with Washington at 7.54 billion. The 2026 crop is down 6%, but 10.437 billion pounds is still slightly above the five-year average. ([Esmis][1])

Bottom line: I’d expect more pricing pressure on Washington apples than the -6% national headline would imply, particularly if Washington’s crop quality, packout and storage holdings are good. The more significant supply constraints should be in Pennsylvania and Virginia, rather than in the major national apple supply centers.

One caveat: the five-year averages above use USDA’s published annual/forecast series, and some historical estimates can be revised. USDA’s Quick Stats is the underlying comprehensive database for state-level agricultural statistics. ([NASS][3])

If you want, I can take this one step further and show 2026 production by state versus the 10-year average, which would reveal whether Washington’s 2026 crop is merely normal or actually unusually large.

[1]: https://esmis.nal.usda.gov/sites/default/release-files/796015/crop0826.pdf?utm_source=chatgpt.com “Crop Production 08/12/2026”

[2]: https://downloads.usda.library.cornell.edu/usda-esmis/files/tm70mv177/2227p6419/w3764r31w/crop0823.pdf?utm_source=chatgpt.com “USDA

AGRICULTURE

COUNTSCrop ProductionISSN: 1936-3”

[3]: https://www.nass.usda.gov/Quick_Stats/?utm_source=chatgpt.com “USDA - National Agricultural Statistics Service - Quick Stats”

What percent of the forecast crop will be utilized for the fresh market?

ChatGPT: For the 2026 U.S. apple crop, USDA’s August forecast is 10.437 billion pounds. USDA has not yet published a 2026 fresh-vs.-processing utilization split, so the best estimate has to be based on recent utilization patterns. ([Esmis][1])

My estimate: about 68–70% fresh market

| Million lbs. | % of crop |

| 2026 total forecast | 10,437 | 100% |

| Fresh market — estimated | ~7,100–7,300 | ~68–70% |

| Processing — estimated | ~3,100–3,300 | ~30–32% |

There is good evidence for using roughly 69% as the central estimate:

USDA reports that 2025 utilized production was 10.72 billion pounds, of which 7.27 billion pounds went to fresh market and 3.45 billion to processing. That’s 67.8% fresh. ([Esmis][2])

USApple’s industry analysis put 2024/25 fresh utilization at 69%, the second consecutive year above the historical average. ([USAA Member Profile][3])

USApple’s five-year data showed a 2020–24 average of 71% fresh / 29% processing. ([Chile Alimentos][4])

What that means for 2026

Using 69% fresh utilization:

10.437 billion lbs × 69% = ~7.20 billion lbs.

So I’d currently use about 7.2 billion pounds of fresh-market apples as a reasonable working estimate for the 2026 crop.

That’s actually an important number for the industry. The total crop is down 6% from 2025, but if fresh utilization remains around 69%, the fresh-market supply would be roughly 7.2 billion pounds, versus about 7.27 billion pounds actually utilized fresh in 2025.

In other words, the fresh apple supply may be down only about 1% year-over-year—even though total production is down 6%.

That’s a much less bullish supply story for fresh-market apple prices than the headline 6% crop decline suggests.

One additional consideration: Washington’s 2026 crop is forecast at 7.4 billion pounds, and Washington historically has a much higher fresh-market utilization rate than several Eastern states. ([NASS][5]) That could push the national 2026 fresh percentage toward the upper end of the 68–70% range.

[1]: https://esmis.nal.usda.gov/sites/default/release-files/796015/crop0826.pdf?utm_source=chatgpt.com “Crop Production 08/12/2026”

[2]: https://esmis.nal.usda.gov/sites/default/release-files/795891/ncit0526.pdf?utm_source=chatgpt.com “United States”

[3]: https://usaa.memberclicks.net/assets/2025/Outlook2025/USApple_OutlookReport_2025_F.pdf?utm_source=chatgpt.com “Industry Outlook”

[4]: https://chilealimentos.com/wp-content/uploads/2025/09/USApple_OutlookReport_2025_AGOSTO_VF.pdf?utm_source=chatgpt.com “Industry Outlook”

[5]: https://www.nass.usda.gov/Quick_Stats/Ag_Overview/stateOverview.php?+state=WASHINGTON&utm_source=chatgpt.com “USDA/NASS 2025 State Agriculture Overview for Washington”

How have grower apple prices so far in 2026 compared to last year and the five-year average?

ChatGPT: The best USDA evidence available so far suggests grower apple prices in 2026 have been running below 2025 levels, and likely below the recent five-year norm as well.

USDA ERS reported in March that grower prices for apples were lower in early 2026 than in early 2025. The broader fruit-and-tree-nut grower price index was about 2% below January 2025, although still well above January 2024. (Economic Research Service)

The important caveat is that there isn’t yet a clean USDA national monthly “apple price received” series through July/August that can be averaged apples-to-apples against a five-year average. Apples are marketed over a long season, and USDA’s state-level annual prices are much more reliable than trying to construct a national YTD price from partial monthly data.

My read on 2026 apple grower pricing

Measure

2026 vs. comparison

My assessment

vs. 2025

Down

🔴

vs. 5-year average

Probably down ~5–10%

🟡/🔴

Fresh-market apples

Softer

🔴

Processing apples

Generally weak

🔴

Premium varieties

Better supported

🟡

Commodity varieties

Most pressure

🔴

There are several reasons I’m leaning toward roughly 5–10% below the five-year average rather than a much larger decline.

1. Supply has been abundant.

The 2025 crop was exceptionally large, and USDA’s 2026 forecast is still 10.44 billion pounds, slightly above the 2021–25 average we calculated earlier. So growers are coming into 2026 without a major supply deficit.

2. Washington is particularly important.

Washington’s 2026 forecast of 7.4 billion pounds is about 7% above its five-year average. Washington also accounted for 5.655 billion pounds of fresh-market production in 2025, at an average reported grower price of $0.31/lb. (NASS)

3. The industry has been dealing with structurally challenging economics.

Farm Credit East reported in April that fresh apple prices had averaged around $35 per box from 2013–23, with prices falling when movement increased. (Farm Credit East)

4. Early-2026 USDA data already showed softness.

The USDA’s March Fruit and Tree Nuts Outlook specifically identified apples among the commodities whose grower prices were lower in early 2026 than early 2025. (Economic Research Service)

The more interesting question: are growers actually making money?

That’s where I’d be more concerned.

A 5–10% decline in the grower price doesn’t sound catastrophic, but apple growers have been dealing with elevated labor, packing, storage and other costs. Farm Credit East has described the apple sector as being at an important inflection point, while industry commentary indicates that some growers have received prices below production costs for multiple years. (Farm Credit East)

So my current assessment would be:

2026 apple grower economics: moderately negative.

The combination of above-average Washington production + soft early-season grower prices + elevated production/packing costs means the 2026 crop could be another difficult year for growers even though the national crop is 6% smaller than 2025.

One number I’d use for your produce-economy analysis

If you’re incorporating apples into your Produce Grower-Shipper Price Index, I’d currently use:

2026 apple grower price: ~7% below the 2021–25 average, and ~5% below 2025.

I’d treat that as a working estimate, not an official USDA statistic, until the full 2026 annual price data are available.

Leave a comment

]]><![CDATA[Retail trends - summary of USDA ERS report]]>https://tomkarst.substack.com/p/retail-trends-summary-of-usda-ershttps://tomkarst.substack.com/p/retail-trends-summary-of-usda-ersTue, 18 Aug 2026 18:17:34 GMTI asked ChatGPT to summarize a recent report from USDA ERS on retail trends…

Fresh Produce Industry Discussion Group Newsletter is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

ChatGPT: Here’s a concise summary of the USDA Economic Research Service (ERS) Retail Trends page, which was updated August 17, 2026. ([Economic Research Service][1])

Key takeaways

1. Food-at-home remains enormous—but foodservice is taking the larger share

In inflation-adjusted dollars, total U.S. food spending reached $2.51 trillion in 2025, up 61.4% from 1997.

Food at home (FAH): $1.10 trillion in 2025, up 48.6% from 1997.

Food away from home (FAFH): has grown considerably faster.

In 2025, only 43.7% of food expenditures were FAH, versus 56.3% FAFH.

FAFH spending has exceeded FAH since 2004, except for the temporary pandemic disruption. ([Economic Research Service][1])

Industry implication: Grocery stores are still the foundation of food retail, but consumers increasingly are spending food dollars outside the home.

---

2. The biggest retail story is the shift away from traditional grocery

Traditional grocery stores remain the largest food-at-home channel, but their dominance has eroded substantially.

| Channel | Share of FAH spending, 1997 | 2025 |

| Grocery stores | 72.2% | 56.2% |

| Warehouse clubs & supercenters | 9.4% | 26.4% |

| Other FAH outlets | 18.4% | 17.4% |

The dollar numbers are even more striking:

Grocery-store food sales rose only 15.7%, from $533 billion in 1997 to $617 billion in 2025, inflation-adjusted.

Warehouse clubs and supercenters more than quadrupled, from $69 billion to $289 billion—a 317% increase. ([Economic Research Service][1])

Bottom line: Walmart, Costco, Sam’s Club and other large-format/value-oriented retailers have captured a major portion of the growth in food-at-home spending.

---

3. The traditional grocery store is losing share, even though its sales are growing

This is an important distinction.

The grocery channel hasn’t collapsed—it reached $617 billion in real food sales in 2025. But other channels have grown much faster.

That suggests the competitive threat to conventional supermarkets isn’t simply another supermarket. It is the broader expansion of alternative food retail formats.

This includes:

Warehouse clubs

Supercenters

Dollar stores

Drugstores

Convenience stores

Other nontraditional retailers

Non-food retailers such as drugstores and dollar stores accounted for 11.1% of FAH sales in 2025. ([Economic Research Service][1])

---

4. Retail food spending is highly seasonal

USDA’s updated data also show a consistent seasonal pattern:

Food-at-home spending generally rises toward November and December.

It falls sharply in January.

Warehouse clubs and supercenters show particularly strong seasonal swings.

For 2025:

Grocery-store daily sales: $1.641 billion in March → $1.735 billion in November/December

Warehouse clubs/supercenters: $721 million in January → $916 million in December

Other FAH outlets: $478 million in August → $608 million in December. ([Economic Research Service][1])

This matters when interpreting monthly retail sales data—you shouldn’t automatically interpret every month-to-month change as a change in underlying consumer demand.

---

5. Food retail is becoming increasingly concentrated

This may be the most important finding for the fresh produce industry.

In 2022:

U.S. food sales at supermarkets, grocery stores, warehouse clubs and supercenters totaled $796 billion.

The 20 largest retailers accounted for $519 billion.

That’s 65.2% of total sales.

USDA says the share of the top 4, top 8 and top 20 retailers has generally increased since 1997. ([Economic Research Service][1])

This reinforces the growing negotiating power of the largest retailers over suppliers.

---

6. Competition varies dramatically by state

National concentration doesn’t tell the whole story.

Using the Herfindahl-Hirschman Index (HHI), USDA finds significant differences among states:

More concentrated markets:

Arkansas

Iowa

Florida

More competitive markets:

New York

California

Hawaii

USDA notes that these calculations cover supermarkets, other grocery stores, warehouse clubs and supercenters, which collectively represented 83.4% of food sales in 2022. ([Economic Research Service][1])

---

What I think this means for fresh produce

For the produce industry, there are four particularly important conclusions:

1. Retailer power continues to increase.

With the top 20 retailers controlling roughly two-thirds of the relevant food retail market, growers and shippers increasingly negotiate with a relatively small number of very large buyers.

2. The definition of “retail grocery” is changing.

Produce suppliers can’t think only about supermarkets. Walmart, Costco/Sam’s, dollar stores and other nontraditional outlets are increasingly important outlets for produce.

3. Value-oriented formats are winning share.

The extraordinary growth of warehouse clubs and supercenters suggests that consumers continue to respond strongly to price, value and convenience—an important consideration given produce inflation and retailer promotional strategies.

4. The produce industry faces a paradox:

The total food market is growing substantially, but traditional grocery’s share is shrinking while retailer concentration is increasing. That combination can mean more volume opportunities but fewer powerful buyers.

The statistic I’d put at the top of an industry presentation

> Warehouse clubs and supercenters increased their share of U.S. food-at-home spending from 9.4% in 1997 to 26.4% in 2025, while traditional grocery’s share fell from 72.2% to 56.2%. ([Economic Research Service][1])

That’s a remarkable structural change in the U.S. food system.

[USDA ERS Retail Trends page](https://www.ers.usda.gov/topics/food-markets-prices/retailing-wholesaling/retail-trends?utm_source=chatgpt.com)

[1]: https://www.ers.usda.gov/topics/food-markets-prices/retailing-wholesaling/retail-trends “Retailing & Wholesaling - Retail Trends | Economic Research Service”

]]><![CDATA[Better or worse off than two years ago? Survey says...]]>https://tomkarst.substack.com/p/better-or-worse-off-than-two-yearshttps://tomkarst.substack.com/p/better-or-worse-off-than-two-yearsMon, 17 Aug 2026 16:03:22 GMTA new poll for the group: Compared with two years ago, how would you rate the overall financial health of the produce business?

  • Much better

  • Somewhat better

  • Somewhat worse

  • Much worse

After a few days of survey results, I’ll reveal what ChatGPT had to say about the question…

Have you noticed that ChatGPT or any other AI tool tries to “get to know” you? This is expressed every time I ask a question - the AI knows I am produce-centric in my questions to it, and that central fact colors all of its answers to me, regardless of the topic of my query.

For instance, I asked ChatGPT for some creative writing prompts, and here were some of the ideas…

Fresh Produce Industry Discussion Group Newsletter is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

ChatGPT:

  • The Last Customer — A grocery store employee realizes that the same customer has been shopping there every night for 30 years, but no one else remembers seeing them.

  • The Forgotten Harvest — A farmer discovers an abandoned field producing a crop that shouldn’t exist—and every person who eats it remembers a different version of the past.

  • The Letter in the Produce Box — A handwritten letter arrives inside a shipment of vegetables. It was written 50 years ago and addressed to the person who just opened the box.

  • The Empty Chair — Every morning, a restaurant sets a table for someone who never arrives. One morning, the chair is occupied.

  • The Last Season — A farmer knows this will be his final harvest. Tell the story through the small rituals he performs during the season.

  • The Produce Department Detective — A supermarket employee becomes convinced that customers are leaving coded messages in the vegetable displays.

  • The Meeting — A group of executives gathers for an important strategy meeting, only to discover halfway through that none of them knows why they’re there.

  • The Price of Food — Imagine a future where every food item carries not only a price, but a prediction of how much it will cost next year.

  • The Day Nobody Bought Anything — Consumers around the world simultaneously stop purchasing anything for 24 hours. Tell the story from the perspective of a grocery-store manager.

  • The Memory Market — People can sell memories for money. A struggling family begins selling its happiest memories.

  • The Perfect Year — Scientists create a system that predicts exactly what will happen to every person over the next 12 months. One person’s prediction is blank.

  • The Last Box of Apples — A box of apples arrives at a warehouse with no shipper, no receiver, and no paperwork. Every apple has a person’s name written on it.

  • The Recall — During a nationwide food recall, one investigator notices that every contaminated product passed through the same seemingly insignificant warehouse.

  • The Grower — A retired grower leaves behind instructions for his children to plant one particular variety of fruit—but refuses to explain why.

  • The Price War — Two competing supermarkets begin an increasingly aggressive price war. Then one retailer discovers that the other isn’t trying to win.

  • The Perfect Tomato — A breeder develops a tomato with extraordinary flavor, shelf life, and yield. Within weeks, people begin behaving strangely after eating it.

Okay, ChatGPT, feel free to broaden your perception of me. I am more than shipping labels and USDA production reports. I live and breathe, unlike you.

Yet, I have to say these ideas sound strangely compelling.

Once upon a time, a tomato breeder developed a tomato with exceptional flavor. But then….

Leave a comment

]]><![CDATA[Asking for 55,000 friends: what are the top stories in fresh produce this week?]]>https://tomkarst.substack.com/p/asking-for-55000-friends-what-arehttps://tomkarst.substack.com/p/asking-for-55000-friends-what-areThu, 13 Aug 2026 15:51:16 GMTThe latest group poll, after about 50 votes: How do you think grocery retailers should use surge/dynamic pricing for fresh produce?

  • Avoid because of trust issues: 32%

  • Selectively- major disruptions: 21%

  • Use broadly- adjust to supply: 23%

  • Use it mostly for markdowns: 23%

The poll is surprisingly balanced, though most voters are wary of surge pricing.

The LinkedIn group is very active. Consider the stats for the past 15 days…

Analytics

Last 15 days activity

  • Active members: 16,928: up 19%

  • New members: 85: up 13%

  • Posts: 132: up 13%

  • Post views: 35,378: up 14%

Fresh Produce Industry Discussion Group Newsletter is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Some recent comments to the introduce yourself thread….

Mark Silverman Senior Associate at Major Properties

Major Properties is an Industrial- Commercial Real Estate Brokerage serving the greater Los Angeles market for over 60 years of which I’ve been a member of Major’s team for 25 years .

We have many listings in the L A market , where most of our business comes from referrals thru property and business owners.

Mark Silverman
Major Properties
Ca Dre Lic : 01310992
213 747 0379

DOUNIA EL HAMOUMI Sales Manager Morocco

Hello,
I’m the Export Sales Manager for GreenBuySell, a Moroccan producer and exporter of fruits and vegetables; I also represent Ideapack Moroccan compagny specializing in post-harvest solutions.
Have a nice day.

HOAI PHI NGUYEN Sinh viên tại RMIT University

Hello everyone, I am Kai from True Fruits company in Vietnam, We sale the tropical fruit in Vietnam, especially the fresh coconut. We do also have some tropical fruits such as red/white dragon fruits, lemon and pomelons. My Whatsapp number: +61411751460, It will be great to connect with all of you and hope you have a great day!

Comment image, no alternative text available

Anthony Wasson Depot Operations Manager at Price and Speed

Price & Speed specialises in biosecurity services for fresh produce imported by both air and sea freight. Our purpose-built facility is designed to keep perishable cargo moving efficiently, with four temperature-controlled cool rooms, four DAFF inspection rooms, daily on-site DAFF inspections, and 17 methyl bromide fumigation chambers to ensure fast, compliant treatment and clearance.

I oversee the operations and development of our biosecurity and logistics services, working closely with importers, freight forwarders, airlines, shipping lines, and government regulators to ensure fresh produce reaches the market as quickly and efficiently as possible.

We support importers and exporters serving global markets, with a strong focus on fresh produce arriving from Asia, Europe, North and South America, Africa, and New Zealand into Australia.

Checking in with ChatGPT with this question: What are the top fresh produce, grocery, and foodservice headlines this week in the U.S.?

ChatGPT: Here’s my read of the most important U.S. fresh produce, grocery and foodservice headlines for the week of Aug. 7–13, 2026, with an emphasis on what matters commercially to growers, shippers, retailers and foodservice operators.

🥬 Fresh Produce — the biggest stories

1. Cyclospora continues to be the No. 1 produce-industry story

The CDC, FDA and state agencies are investigating a multistate Cyclospora outbreak linked to iceberg lettuce. ([CDC][1])

The bigger industry issue is increasingly consumer confidence. Produce industry coverage indicates that the outbreak is affecting perceptions beyond lettuce, potentially depressing demand for other fresh categories. ([Blue Book Services][2])

IFPA is pushing CDC to broaden its investigation beyond food to water and other environmental exposure pathways. ([The Packer][3])

Why it matters: This could become a demand story rather than simply a food-safety story if consumers begin avoiding salads and other fresh produce.

2. Salmonella outbreak tied to Mexican jalapeños expands

FDA is investigating a Salmonella outbreak associated with fresh jalapeños from Sinaloa, Mexico.

The recall has expanded into prepared foods, including products made by Taylor Farms, and USDA’s FSIS has issued a public-health alert for meat and poultry products containing the recalled peppers. ([Food Safety and Inspection Service][4])

The situation is particularly significant because it demonstrates how a fresh-produce ingredient can propagate a recall through multiple downstream foodservice and retail products.

Industry implication: Expect renewed scrutiny of traceability, supplier verification and Mexico-U.S. produce supply chains.

3. FDA finalizes fresh-cut produce guidance

The FDA finalized guidance for ready-to-eat fresh-cut produce operations under the Preventive Controls for Human Food rule. ([U.S. Food and Drug Administration][5])

This is particularly important for:

  • salad processors

  • cut fruit

  • fresh-cut vegetables

  • deli/prepared foods

  • foodservice processors

Bottom line: Food safety and preventive controls are becoming an even bigger competitive issue for value-added produce.

4. Mexican avocado traceability is under pressure

The California Avocado Commission is calling for stronger USDA oversight after reported security and traceability breaches in Mexico’s avocado export system, including a proposal for seasonal tariff-rate quotas. ([The Packer][3])

This comes as avocado consumption continues to expand, making supply-chain integrity increasingly important.

5. Specialty-crop economics remain under pressure

The USDA’s previously announced $1 billion specialty-crop assistance program remains an important backdrop for growers dealing with elevated input costs and difficult margins. ([The Packer][6])

At the same time, USDA’s latest Food Price Outlook projects fresh vegetable retail prices to rise 6.8% in 2026. Fresh potatoes have been a notable exception, with June retail prices only 1.4% above a year earlier. ([Economic Research Service][7])

This is an important disconnect: growers continue to face cost pressure while consumers are increasingly price sensitive.

🛒 Grocery — three stories I’d watch

6. SNAP reductions are beginning to show up in grocery sales

Ahold Delhaize said reductions in SNAP benefits slowed U.S. sales growth in Q2. ([Supermarket News][8])

That’s potentially a major fresh-produce story because lower-income households are disproportionately important to conventional grocery and many produce categories.

My read: Watch produce volume, not just dollar sales. A shopper can spend more while actually buying fewer pounds.

7. Grocery remains a value-driven environment

The broader grocery picture remains challenging. McKinsey estimates that U.S. grocery sales increased 1.2% in 2025, but that was driven by 2.2% price increases while unit volume fell 1%. ([McKinsey & Company][9])

The implication for produce is significant: retailers have to demonstrate value while simultaneously dealing with rising fresh-food costs.

That helps explain the interest in:

  • promotions

  • private label

  • dynamic pricing

  • smaller pack sizes

  • prepared foods

  • personalized offers

8. Instacart is becoming a bigger technology story for grocery

Instacart reported double-digit growth in sales and orders in Q2 while expanding AI and retail technology capabilities. ([Supermarket News][10])

For produce, the interesting question isn’t simply online grocery growth. It’s whether AI can improve:

personalized produce recommendations

digital merchandising

substitutions

promotions

fresh inventory management

shrink reduction

🍽️ Foodservice — what’s getting attention

9. Value is back at the center of restaurant strategy

Restaurant operators continue to emphasize portion size and perceived value as consumers remain budget conscious. Capriotti’s, for example, is highlighting larger portions as part of its menu strategy. ([Restaurant Business Online][11])

This matters for produce suppliers because restaurants increasingly need ingredients that provide:

low cost + high visual appeal + strong perceived value.

That favors products such as lettuce, tomatoes, onions, potatoes, cabbage, avocados and other high-volume ingredients.

10. Grocery is increasingly competing with restaurants

One of the more important structural trends is the growth of prepared foodservice inside supermarkets and club stores. Supermarket and club-store chains generated approximately $31 billion in prepared-foodservice sales in 2025, although growth has begun to slow. ([Blue Book Services][12])

That creates an interesting three-way competition:

Produce department ↔ supermarket prepared foods ↔ restaurants

Fresh-cut produce is right in the middle of that competition.

My ranking of the 5 stories most important to the produce industry

| Rank | Story | Industry significance |

| 1 | 🥬 Cyclospora/iceberg lettuce | Very high — potential demand/consumer-confidence issue |

| 2 | 🌶️ Salmonella/Mexican jalapeños | Very high — food safety + Mexico supply chain |

| 3 | 🛒 SNAP reductions affecting grocery sales | High — potential volume impact on value-oriented shoppers |

| 4 | 📈 Fresh vegetable prices projected +6.8% | High — retail pricing vs. grower margins |

| 5 | 🍽️ Grocery prepared foodservice growth | High — changing channel competition for fresh ingredients |

The bigger story

If I were putting this into a Fresh Produce Executive Brief this week, I’d characterize the market as:

> “Food safety meets consumer affordability.”

The industry is simultaneously dealing with two demand threats: food-safety concerns that can discourage consumption and economic pressure that causes shoppers to trade down or buy less. Meanwhile, retailers and foodservice operators are trying to maintain traffic and value perception while fresh-food costs remain elevated.

That combination makes volume trends potentially more important than dollar sales over the next several months. ([Economic Research Service][7])

If you’d like, I can also turn this into a “Top 10 Fresh Produce Industry Headlines This Week” ranked specifically for growers/shippers, with one-sentence implications for each story.

[1]: https://www.cdc.gov/cyclosporiasis/outbreaks/07-26/index.html?utm_source=chatgpt.com “Cyclospora Outbreak Linked to Iceberg Lettuce | Cyclosporiasis”

[2]: https://www.bluebookservices.com/produce-industry-headlines-august-12-2026/?utm_source=chatgpt.com “Produce industry headlines: August 12, 2026 - Blue Book”

[3]: https://www.thepacker.com/?p=2&utm_source=chatgpt.com “Fresh produce industry’s leading news source”

[4]: https://www.fsis.usda.gov/recalls-alerts/fsis-issues-public-health-alert-various-meat-and-poultry-products-containing-fda-0?utm_source=chatgpt.com “FSIS Issues Public Health Alert for Various Meat and Poultry ...”

[5]: https://www.fda.gov/food/hfp-constituent-updates/fda-finalizes-guidance-ready-eat-fresh-cut-produce-operations-under-preventive-controls-human-food?utm_source=chatgpt.com “FDA Finalizes Guidance for Ready-to-Eat Fresh-Cut Produce Operations u”

[6]: https://www.thepacker.com/news/produce-crops/usda-provide-1b-specialty-crop-farmer-assistance?utm_source=chatgpt.com “USDA to Provide $1B in Specialty Crop Farmer Assistance”

[7]: https://www.ers.usda.gov/data-products/food-price-outlook/summary-findings?utm_source=chatgpt.com “Food Price Outlook - Summary Findings - ERS.USDA.gov”

[8]: https://www.supermarketnews.com/finance/ahold-says-snap-cuts-are-slowing-u-s-sales-growth?utm_source=chatgpt.com “Ahold says SNAP cuts are slowing U.S. sales growth”

[9]: https://www.mckinsey.com/industries/retail/our-insights/the-state-of-grocery-north-america?utm_source=chatgpt.com “The State of Grocery North America 2026”

[10]: https://www.supermarketnews.com/finance/instacart-sales-climb-14-as-grocery-platform-expands-ai-retail-technology?utm_source=chatgpt.com “Instacart sales climb 14% as grocery platform expands AI, retail technology”

[11]: https://restaurantbusinessonline.com/food/capriottis-spotlights-bigger-portions-bigger-value-menu-revamp?utm_source=chatgpt.com “Capriotti’s spotlights bigger portions and bigger value with ...”

[12]: https://www.bluebookservices.com/produce-industry-headlines-july-31-2026/?utm_source=chatgpt.com “Produce industry headlines: July 31, 2026 - Blue Book Services”

Leave a comment

]]><![CDATA[FDA final guidance on ready-to-eat fresh-cut produce - ChatGPT summarizes]]>https://tomkarst.substack.com/p/fda-final-guidance-on-ready-to-eathttps://tomkarst.substack.com/p/fda-final-guidance-on-ready-to-eatWed, 12 Aug 2026 10:56:03 GMTI asked ChatGPT to summarize a recent notice in the Federal Register from the FDA…

Fresh Produce Industry Discussion Group Newsletter is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

ChatGPT: FDA final guidance on ready-to-eat fresh-cut produce

The FDA notice published today, August 12, 2026, announces a final guidance for industry on minimizing biological hazards in ready-to-eat (RTE) fresh-cut produce. It is particularly relevant to processors, fresh-cut operations, salad companies, retailers with fresh-cut facilities, and suppliers to foodservice. ([GovInfo][1])

[Federal Register notice — FR Doc. 2026-16420](https://www.govinfo.gov/content/pkg/FR-2026-08-12/html/2026-16420.htm?utm_source=chatgpt.com)

What FDA is doing

The FDA is finalizing its updated “Guide to Minimize Biological Hazards in Ready-to-Eat Fresh-Cut Produce.” The guidance:

Replaces the FDA’s 2008 guidance on microbial food-safety hazards in fresh-cut fruits and vegetables.

Finalizes the draft guidance issued in October 2018.

Is intended to help manufacturers and processors comply with the Preventive Controls for Human Food requirements in 21 CFR Part 117.

Applies to ready-to-eat fresh-cut produce that is not a low-moisture food. ([GovInfo][1])

Importantly, this is guidance rather than a new regulation. FDA says it represents its current thinking but is not legally binding on industry or FDA. Companies can use alternative approaches if they meet applicable statutory and regulatory requirements. ([GovInfo][1])

What’s new in the final guidance

FDA says it made several substantive clarifications compared with the 2018 draft:

1. More precise scope

The guidance specifically applies to RTE fresh-cut produce with water activity above 0.85.

2. Antimicrobial controls

FDA adds another example of an antimicrobial substance that can be used as a process control during fresh-cut production.

3. Supply-chain controls

The guidance provides additional examples of supply-chain programs for controlling pathogens in fresh-cut processing facilities.

4. Time and temperature

FDA adds recommendations concerning time/temperature controls, an important area for products that are cut, processed and distributed under refrigeration.

5. Clarity and organization

FDA made editorial and organizational changes throughout the document to make the recommendations easier to use. ([GovInfo][1])

Why this matters to the fresh produce industry

I would characterize this as an important food-safety guidance update rather than a major new regulatory burden.

The biggest practical implications are likely to be for fresh-cut processors and companies supplying RTE products, including:

Bagged salads and salad kits

Cut lettuce and leafy greens

Cut fruit

Vegetable trays

Fresh-cut vegetables

Diced/sliced produce

Products prepared for foodservice

Retail fresh-cut operations

The emphasis on pathogen controls, sanitation/process controls, supply-chain controls and temperature management reinforces the FDA’s preventive-controls approach to fresh-cut produce.

Industry takeaway

The key message is that FDA is tightening and modernizing its guidance around biological hazards in fresh-cut produce without creating a new regulation.

For produce companies, the most important thing to review is whether their existing food-safety plans, especially time/temperature controls, antimicrobial/process controls and supplier/supply-chain pathogen controls, are consistent with the new FDA guidance.

One other point worth emphasizing: FDA explicitly says the guidance does not establish new legal rights or obligations, and companies may use alternative approaches. ([GovInfo][1])

For the fresh-cut industry, I think the most consequential element is the additional FDA attention to time/temperature controls and supply-chain pathogen controls. That could become particularly relevant in the wake of recent foodborne-illness investigations involving fresh produce.

[1]: https://www.govinfo.gov/content/pkg/FR-2026-08-12/html/2026-16420.htm “Federal Register, Volume 91 Issue 154 (Wednesday, August 12, 2026)”

Share

]]><![CDATA[How should retailers use dynamic pricing?]]>https://tomkarst.substack.com/p/how-should-retailers-use-dynamichttps://tomkarst.substack.com/p/how-should-retailers-use-dynamicTue, 11 Aug 2026 14:16:04 GMT

See The Packer’s coverage of dynamic pricing here: “Retail Industry Defends Electronic Shelf Labels as Unions and Lawmakers Target Digital Pricing”

Unions are pushing back against potential job losses resulting from electronic shelf labels, but what about consumer trust?

Subscribe now

Here is a new poll for the group: How do you think grocery retailers should use surge/dynamic pricing for fresh produce?

  • Avoid because of trust issues

  • Selectively- major disruptions

  • Use broadly- adjust to supply

  • Use it mostly for markdowns

Asking AI ChatGPT about this technology….

What are the pros and cons of electronic shelf labels and surge pricing?

ChatGPT: Electronic shelf labels (ESLs) and surge pricing are related but distinct. ESLs are primarily a technology/operational tool; surge pricing is a pricing strategy that the technology makes much easier to implement. For the fresh produce industry, the distinction is especially important because perishability makes dynamic pricing potentially valuable—but also potentially controversial.

Pros and cons

Pros

Electronic shelf labels

Pros:

  • Instant price changes

  • Reduces labor needed to replace paper tags
    Fewer pricing errors

  • Better coordination between shelf and POS prices

  • Can support promotions and markdowns

  • Can display origin, variety, PLU, nutrition or QR information

  • Helps retailers manage thousands of SKUs

Cons / Risks

  • Significant upfront investment

  • Batteries and hardware require maintenance

  • Cybersecurity/IT risks

  • Technology can fail or display incorrect prices

  • May reduce the transparency and simplicity of shelf pricing

  • Potential customer confusion if prices change frequently

Surge/dynamic pricing

Pros

  • Allows retailers to respond to supply and demand in real time

  • Can improve margins when demand is strong

  • Can accelerate sales of highly perishable products through markdowns

  • Could reduce shrink and food waste

  • Allows more targeted promotions

  • Potentially rewards consumers who shop during lower-demand periods

Cons

  • Consumers may perceive it as price gouging

  • Creates distrust if prices change unexpectedly

  • Particularly problematic for essential foods

  • Could make comparison shopping harder

  • May disproportionately affect price-sensitive consumers

  • Could trigger regulatory scrutiny

  • Frequent price changes can undermine retailer/grower promotional planning

The interesting opportunity for fresh produce

I think dynamic pricing has a stronger economic rationale for produce than for many center-store products, because produce has a very unusual combination of:

  • Highly perishable inventory

  • Rapidly changing supply

  • Weather-driven price volatility

  • Quality deterioration over time

  • Significant shrink

  • Large differences between peak and off-peak demand

For example, imagine a retailer has 500 cases of strawberries with a short remaining shelf life. Rather than holding the price at $3.99 until the product deteriorates and eventually becomes shrink, the retailer could automatically move:

$3.99 → $3.49 → $2.99 → $1.99

as the remaining shelf life and inventory position change.

That could be a win-win if the lower price generates incremental consumption and reduces waste.

Where it gets controversial

The bigger concern is surge pricing upward.

Suppose a retailer normally sells a carton of berries for $4.99. A heat wave hits California, supply tightens, and an algorithm raises the price to $5.99 or $6.49.

Economically, that makes sense: scarcity is reflected in the price.

But consumers may interpret it as:

> “The store is charging me more because it knows I need it.”

That perception could be particularly damaging for fresh food retailers.

There is also a producer implication. If retailers can instantly raise or lower prices, who captures the benefit of the price movement?

A retailer could potentially raise retail prices immediately when supply tightens while grower-shippers remain locked into previously negotiated prices. Conversely, retailers could aggressively mark down produce to clear inventory without the grower necessarily sharing in the economics.

My view for produce

I’d divide dynamic pricing into three categories:

1. Markdown pricing — highly attractive

Use ESLs to automatically lower prices as products approach their sell-by/quality threshold.

★★★★★

This could materially reduce produce shrink.

2. Supply/demand pricing — potentially valuable

Adjust prices based on market conditions, weather, supply and demand.

★★★☆☆

Economically rational, but requires careful consumer communication.

3. Real-time surge pricing — highest risk

Prices rise dramatically during periods of high demand or short supply.

★☆☆☆☆ for fresh produce

The reputational and consumer-trust risks probably outweigh the incremental margin opportunity for most supermarkets.

A particularly interesting model

The best application may actually be “dynamic markdowns” rather than “surge pricing.”

Instead of telling consumers:

> “Price increased because demand is high.”

the retailer tells them:

> “Save 30% — enjoy today.”

The underlying technology is essentially the same, but the consumer psychology is completely different.

For produce, I would argue that ESLs + AI inventory management + dynamic markdowns could become one of the more important tools for reducing shrink and improving produce profitability over the next five years.

The key industry question isn’t really “Should retailers use surge pricing?” It’s “How much dynamic pricing will consumers tolerate before they lose trust in the retailer?”

Leave a comment

]]><![CDATA[U.S. fresh produce exports to Canada - trends over five years]]>https://tomkarst.substack.com/p/us-fresh-produce-exports-to-canada-3a2https://tomkarst.substack.com/p/us-fresh-produce-exports-to-canada-3a2Mon, 10 Aug 2026 10:37:21 GMTI asked ChatGPT to summarize volume/value trends from USDA trade data for U.S. fresh produce shipments to Canada….

Fresh Produce Industry Discussion Group Newsletter is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

ChatGPT: I analyzed the USDA/FAS spreadsheet for U.S. fresh produce exports to Canada on a July–June marketing-year basis, covering the five completed data years 2022 through 2026. Quantities are reported in metric tons (MT) and values in thousands of dollars.

Executive summary

U.S. fresh produce exports to Canada have been remarkably stable in volume over the past five years, but the value of those exports has fluctuated considerably.

  • 2022: 3.19 million MT, $2.12 billion

  • 2023: 3.23 million MT, $1.93 billion

  • 2024: 3.26 million MT, $2.00 billion

  • 2025: 3.12 million MT, $1.96 billion

  • 2026: 3.25 million MT, $2.01 billion

Thus, from 2022 to 2026:

  • Volume increased just 2.0%

  • Export value declined 5.3%

The average export value fell from roughly $0.302/lb in 2022 to $0.280/lb in 2026.

The most recent year was stronger: 2026 volume rebounded 4.4% from 2025, while value increased 2.5%.

Five-year trend

July–June year Volume (million MT) Value ($ billion) Approx. $/lb

  • 2022 3.19 $2.12 $0.302

  • 2023 3.23 $1.93 $0.271

  • 2024 3.26 $2.00 $0.278

  • 2025 3.12 $1.96 $0.285

  • 2026 3.25 $2.01 $0.280

Biggest export commodities

The Canadian market is heavily concentrated in a relatively small group of products.

2026 leaders by value:

Commodity Volume, MT Value, $ million

  • Berries 157,315 $681.4

  • Lettuce 225,863 $523.8

  • Grapes 80,467 $226.0

  • Cauliflower 105,769 $194.8

  • Apples 158,337 $177.7

  • Melons 249,897 $160.1

  • Oranges/tangerines 105,325 $155.1

  • Onions/shallots 205,305 $145.0

  • Cherries 29,602 $130.0

  • Tomatoes 69,457 $108.7

  • Peppers 50,635 $106.7

  • Potatoes 202,344 $90.6

Berries and lettuce alone generated about $1.21 billion in 2026, or roughly 60% of the total value of the commodities covered by the spreadsheet.

Commodities showing the strongest growth

Several categories have posted impressive gains since 2022.

Particularly strong

  • Lemons & limes: value +49%, volume +61%

  • Peppers: value +39%, volume +17%

  • Cherries: value +32%, volume +69%

  • Melons: value +19%, volume +17%

  • Celery: value +18%, despite a 20% decline in volume

The lemon/lime and pepper numbers stand out because the growth appears to be more than simply a one-year spike.

Commodities losing ground

Several traditional U.S. export categories to Canada have contracted substantially.

  • Mushrooms: value −56%, volume −73%

  • Broccoli: value −77%, volume −78%

  • Cabbage: value −34%

  • Grapefruit: value −31%

  • Pears: value −27%

  • Garlic: value −24%

  • Asparagus: value −23%

  • Sweet corn: value −20%

  • Onions/shallots: value −16%

  • Potatoes: value −14%

The deterioration in broccoli and mushrooms is especially striking.

An important distinction: volume vs. value

One of the more interesting findings is that export value has frequently increased even when physical shipments declined.

For example:

  • Lettuce: 2022–26 volume −13%, but value +9%

  • Grapes: volume −8%, value +10%

  • Cauliflower: volume −15%, value +9%

  • Celery: volume −20%, value +18%

  • Onions: volume +5%, but value −16%

This suggests considerable variation in commodity mix, pricing and unit values, rather than simply a change in Canadian demand.

Conversely, some products have experienced genuine volume-driven growth. Melons, peppers, oranges/tangerines and lemons/limes all show meaningful increases in both volume and value.

2026 was a rebound year

The 2026 July–June period looks considerably better than 2025.

Total exports:

Volume: +4.4%

Value: +2.5%

Some of the biggest 2026 year-over-year volume increases were:

  • Potatoes: +21%

  • Apples: +20%

  • Oranges/tangerines: +17%

  • Lemons/limes: +29%

  • Cucumbers: +29%

  • Pears: +47%

But there were also notable declines:

  • Sweet corn: −19%

  • Carrots: −11%

  • Peaches: −11%

  • Cabbage: −9%

  • Lettuce: −8%

  • Broccoli: −13%

Bottom line

The Canadian market remains an extremely important and relatively stable outlet for U.S. fresh produce, with exports around 3.2–3.3 million metric tons annually. However, the composition of that trade is changing.

The clearest structural trends are:

Berries and lettuce dominate U.S. fresh-produce exports to Canada.

Peppers, melons and citrus are gaining importance.

Traditional vegetable categories such as broccoli, mushrooms, cabbage and asparagus have contracted sharply.

Overall volume is roughly where it was five years ago, while total export value is below 2022 levels.

The 2026 rebound is encouraging, particularly because volume returned to near the five-year high.

The divergence between volume and value indicates that pricing/mix has been an important factor in the Canadian export market, rather than demand simply rising or falling across the board.

Source: USDA Foreign Agricultural Service/GATS, U.S. Census Bureau trade data. The spreadsheet uses the July–June period and FATUS commodity groupings. The spreadsheet cautions that quantity statistics can be affected by mixed units of measure.

A few things jump out

The biggest strategic finding is that U.S. fresh-produce exports to Canada aren’t simply growing or shrinking. The commodity mix is changing considerably. Some categories are losing volume but commanding higher unit values, while others are losing both volume and value.

Berries are clearly the largest export by value, reaching $681.4 million in 2026 and nearly $2/lb in average export value.

Lettuce is second, with 2026 value rebounding to $523.8 million despite volume falling to 225,862 MT. Its unit value jumped to $1.05/lb, the highest in the five-year series.

Lemons/limes are a major growth story: volume rose from 32,936 MT to 52,895 MT, while value increased from $48.2 million to $72.0 million.

Peppers have steadily increased in unit value, from $0.81/lb to $0.96/lb.

Mushrooms are the dramatic outlier: volume plunged about 73% from 2022 to 2026, while the calculated unit value increased from $2.30 to $3.75/lb.

Broccoli suffered an extraordinary volume collapse, from 25,774 MT to only 5,666 MT.

Potatoes had a major volume decline through 2025 but partially recovered in 2026.

Onions/shallots are interesting because volume remains high, but unit value fell from $0.40/lb in 2022 to only $0.32/lb in 2026.

One important caveat: the $/lb figures are calculated average export values, not Canadian retail prices or grower prices. They are calculated by converting the spreadsheet’s MT quantity to pounds and dividing export value by pounds.

Share

]]><![CDATA[2026 apple crop estimates - ChatGPT speculates]]>https://tomkarst.substack.com/p/2026-apple-crop-estimates-chatgpthttps://tomkarst.substack.com/p/2026-apple-crop-estimates-chatgptThu, 06 Aug 2026 01:40:24 GMT

Industry guesses and the first official USDA estimate of the U.S. apple crop are scheduled for release later this month. What if we tried to get an early look at the apple crop from our AI friend?

Fresh Produce Industry Discussion Group Newsletter is a reader-supported publication. To receive new posts and support my work, consider becoming a free or pai…

Read more

]]><![CDATA[U.S.-EU Agreement- tariff implementation]]>https://tomkarst.substack.com/p/us-eu-agreement-tariff-implementationhttps://tomkarst.substack.com/p/us-eu-agreement-tariff-implementationTue, 04 Aug 2026 19:53:58 GMTI asked ChatGPT to summarize a recent USDA FAS report on U.S.-European trade…

Fresh Produce Industry Discussion Group Newsletter is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

ChatGPT: Here is a summary of the USDA Foreign Agricultural Service (FAS) GAIN report “Tariff Implementation of the U.S.-EU Agreement” (E42026-0055). ([Foreign Agricultural Service][1])

Executive Summary

The report explains how the European Union has implemented its commitments under the 2025 U.S.-EU trade agreement. The new regulations reduce or eliminate tariffs on many U.S. exports entering the EU, while establishing tariff-rate quotas (TRQs) for selected agricultural products. For U.S. agriculture, the agreement creates new export opportunities, although benefits vary considerably by commodity.

Key Agricultural Provisions

1. Twenty new tariff-rate quotas (TRQs)

The EU established 20 preferential TRQs covering numerous U.S. agricultural and seafood products.

Products may enter duty-free or at reduced tariff rates until annual quota volumes are filled.

Once quotas are exhausted, normal EU tariffs apply. ([Foreign Agricultural Service][1])

Products Receiving Improved Market Access

Major beneficiaries include:

Pork

Bison meat

Dairy products

Cheese

Tree nuts

Soybean oil

Certain processed foods

Seafood products

Salmon

Animal feed ingredients

Non-alcoholic beverages

Selected fruits and vegetables

Fresh Fruits and Vegetables

The report is particularly relevant for the produce industry.

For many fruits and vegetables:

Import duties are reduced or eliminated.

However, products covered by the EU’s Entry Price System continue to face minimum import price protections.

This means gains are partial rather than complete for commodities such as:

Tomatoes

Cucumbers

Citrus

Table grapes

Apples

Pears

Cherries

Plums

Other sensitive produce categories

The agreement removes the ad valorem tariff portion but generally leaves the entry-price mechanism intact to protect EU growers. ([Foreign Agricultural Service][1])

Industrial Goods

Although the report focuses on tariff implementation, the largest tariff reductions occur on industrial products, where the EU has largely eliminated duties on U.S. manufactured goods.

Lobster

A notable feature is restoration of:

Zero tariffs on U.S. lobster

Expansion to include processed lobster

Retroactive reimbursement of duties paid since August 2025

Safeguard Mechanisms

The EU included protections allowing it to suspend concessions if:

the U.S. fails to honor the agreement,

U.S. policies undermine the deal,

imports surge enough to seriously injure EU industries.

These provisions provide flexibility should trade conditions change. ([European Commission][2])

Implications for U.S. Agriculture

Winners

The agreement appears most favorable for:

Tree nuts

Dairy

Pork

Seafood

Soybean oil

Processed foods

Some specialty crops

These sectors should benefit from improved competitiveness in the EU market.

Mixed Outlook for Produce

Fresh produce exporters gain improved access, but the impact is moderated because:

the EU continues protecting sensitive fruit and vegetable sectors through its Entry Price System,

some products remain subject to seasonal pricing rules,

access for quota products depends on remaining quota availability.

Consequently, the agreement is unlikely to dramatically increase exports of highly sensitive produce such as tomatoes or apples, but it may modestly improve competitiveness for a range of U.S. horticultural products. ([Foreign Agricultural Service][1])

What This Means for the Fresh Produce Industry

For U.S. growers, shippers, and exporters:

Positive: Reduced tariffs should improve opportunities for several fruit and vegetable categories and lower costs for EU buyers.

Limiting factor: The EU’s Entry Price System continues to shield domestic producers from lower-priced imports, reducing the agreement’s impact on many fresh produce commodities.

Strategic consideration: Exporters will need to monitor quota availability and timing, as preferential access for some products is available only until TRQs are filled.

Bottom Line

The agreement represents a meaningful improvement in U.S. agricultural access to the EU, but it is not a full agricultural free-trade agreement. The largest gains accrue to meat, dairy, seafood, nuts, soybean oil, and processed foods. For fresh fruits and vegetables, market access improves but remains constrained by the EU’s longstanding protections for sensitive produce sectors. ([Foreign Agricultural Service][1])

[1]: https://www.fas.usda.gov/data/gain/2026/07/european-union-tariff-implementation-us-eu-agreement?utm_source=chatgpt.com “European Union: Tariff Implementation of US-EU Agreement”

[2]: https://commission.europa.eu/topics/trade/eu-us-trade-deal_en?utm_source=chatgpt.com “The EU-US trade deal: restoring stability and predictability”

Leave a comment

]]><![CDATA[Two thirds polled "strongly oppose" Trump tariff policies ]]>https://tomkarst.substack.com/p/two-thirds-polled-strongly-opposehttps://tomkarst.substack.com/p/two-thirds-polled-strongly-opposeTue, 04 Aug 2026 11:37:26 GMTAfter 105 votes, the results of this poll: How would you describe your level of support for President Trump’s current tariff policies as they relate to the fresh produce industry?

  • Strongly support: 11%

  • Somewhat support: 15%

  • Somewhat oppose: 7%

  • Strongly oppose: 67%

Fresh Produce Industry Discussion Group Newsletter is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

A couple of comments: indicate that Trump’s actions still hold sway over some in the industry…

As someone who works closely with America’s fresh produce growers every day, I see the value in policies that help create a more level playing field for U.S. agriculture in certain commodities.

Our growers invest heavily in food safety, environmental stewardship, labor, quality, and innovation while often competing against imported products produced under very different cost structures and regulations. When American farms and American companies are able to compete fairly, it supports family farms, creates jobs, strengthens rural communities, and encourages continued investment in the future of U.S. agriculture.

While trade policies can create short-term adjustments throughout the supply chain, I believe a strong domestic fresh produce industry is critical to our nation’s long-term success. Supporting U.S. growers helps build a more resilient food supply, reduces dependence on foreign sources, and ensures consumers continue to have access to fresh, high-quality fruits and vegetables grown right here at home.

A strong domestic produce industry isn’t just good for farmers—it’s good for consumers, retailers, and our nation’s food security.

Comment #2

Look at the steel industry 😂 before tariffs, many steel mills closed or had layoffs; now because tariffs give American steel an even playing field.. steel is booming !! in beaver county Pa they've added shifts !! Bravo, Donald Trump... when Trump left office, first term .. gas was 179 and diesel fuel for semi trucks, which haul produce, was 199 a gallon... then Biden got in office, shut down offshore drilling, closed most pipelines, and wanted electric vehicles .. from 2020 to 2024, gas went up diesel went way up to over 5.00 a gallon !!!!The American reserve went way down and we suffered as a country .. i believe within a year .. we will see fuel down and as a result produce and food prices will drop some ! Our country and the world needs drilling !! electric vehicles will not get the job done alone .. nice option if your not driving long distances .. the California Grid cannot support the move to electric !! ..We need drilling !! Offshore drilling !! Pipelines open and prices will come down ..

I asked ChatGPT about the ag industry support for Trump’s tariff policies…

How has ag industry support for Trump's tariff policy changed since he took office? What is the level of farm support now?

ChatGPT: Support for President Trump’s tariff policies within U.S. agriculture has become more mixed since he returned to office in January 2025. The biggest shift has not been an ideological reversal—many farmers still support the goal of obtaining fairer trade—but rather growing concern about the economic costs and the length of the trade disputes.

Here’s how sentiment appears to have evolved:

| Time | General farm sentiment | Primary concerns |

| January–March 2025 | Strong support | Optimism that tariffs would quickly produce better trade deals. |

| Spring–Summer 2025 | Moderately supportive | Retaliation from China and other buyers, export losses, lower commodity prices. |

| Early 2026 | Divided | Rising input costs, weak crop prices, uncertainty over export markets, continued reliance on government aid. |

Current level of support

No single poll covers all of agriculture, but several surveys and industry reporting suggest:

Roughly 55–70% of commercial farmers still say they support the administration’s overall trade strategy or believe it will benefit agriculture in the long run, although support varies considerably by commodity and region. ([Investigate Midwest][1])

Support for the tariffs themselves is lower than support for Trump overall. Many producers distinguish between supporting the President and wanting tariffs to remain in place indefinitely.

Most farm organizations continue to emphasize that opening export markets is more important than maintaining tariffs.

Who still tends to support tariffs?

Support remains relatively strongest among:

Corn growers hoping for expanded ethanol markets

Beef and livestock producers seeking stronger sanitary and phytosanitary enforcement

Some dairy producers

Farmers who believe China has historically engaged in unfair trade practices

Many producers accept short-term pain if they believe it leads to better long-term market access.

Where support has weakened

Support has softened most among export-dependent sectors:

  • Soybeans

  • Tree nuts

  • Specialty crops

  • Cotton

  • Pork

These industries depend heavily on foreign customers and are more vulnerable to retaliatory tariffs.

Farm organizations

Most major agricultural organizations have adopted a nuanced position:

  • They generally support tougher enforcement against unfair trade practices.

  • They strongly support negotiating reciprocal market access.

  • They increasingly warn against prolonged tariff battles that reduce exports.

In other words, the consensus has shifted toward:

> “Use tariffs as leverage—but reach agreements quickly.”

Government assistance

One reason overall political support has remained higher than some economists expected is that the administration has provided substantial financial assistance to offset trade-related and input-cost pressures. Congress is also considering additional aid beyond the roughly $12 billion already distributed earlier in 2026. ([Reuters][2])

Overall assessment

If I were to estimate current agricultural sentiment toward Trump’s tariff policy (recognizing there is no official national poll), it would look something like this:

  • Strongly support: 20–25%

  • Somewhat support: 35–40%

  • Neutral/uncertain: 15–20%

  • Somewhat oppose: 15–20%

  • Strongly oppose: 10–15%

That suggests about 55–65% of U.S. producers remain generally supportive, but with noticeably less enthusiasm than immediately after Trump took office. The key change has been a shift from expecting quick gains to wanting the administration to convert tariff leverage into durable trade agreements as soon as possible. This pattern is consistent with producer surveys showing optimism about the long-term strategy alongside growing concern over near-term earnings and market uncertainty. ([Investigate Midwest][1])

[1]: https://investigatemidwest.org/2025/06/24/trumps-tariffs-are-hurting-u-s-agriculture-some-farmers-still-support-them/?utm_source=chatgpt.com “Trump’s tariffs are hurting U.S. agriculture. Some farmers ...”

[2]: https://www.reuters.com/world/us/trump-seeks-additional-11-billion-farm-aid-2026-06-24/?utm_source=chatgpt.com “Trump seeks additional $11 billion in farm aid”

Leave a comment

]]><![CDATA[Lettuce demand after the Cyclospora outbreak - ChatGPT gives an analysis]]>https://tomkarst.substack.com/p/lettuce-demand-after-the-cyclosporahttps://tomkarst.substack.com/p/lettuce-demand-after-the-cyclosporaSun, 02 Aug 2026 11:40:26 GMT

A new poll for the group: How quickly do you expect lettuce demand to recover from the recent Cyclospora outbreak?

  • Little lasting effect

  • Next season

  • Within two to three months.

  • Within a few weeks

Fresh Produce Industry Discussion Group Newsletter is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

A chat with ChatGPT on lettuce supply and demand…

How has lettuce demand\/pricing been hurt by the Cyclospora outbreak in the U.S.?

Read more

]]>