U.S. Supply and Demand for Blueberries: A Regression Analysis
Abstract
The blueberry industry in the United States has witnessed significant growth since 2000. The formation of the 2001 Blueberry Promotion, Research, and Information Order program allowed for grower assessment funding which was used to document the health benefits associated with blueberries. Increased regional availability and health-focused marketing and promotional activity have likely led to the increase in blueberry consumption (U.S. Highbush Council). Blueberries are predominantly sold in two forms, fresh and frozen, where fresh berries garner a large premium compared to frozen berries. From 1995 to 2009, the total domestic utilization of U.S. blueberry production rose 6.7% annually, with fresh blueberry consumption increasing by 13.1% annually. Furthermore, imports of blueberries from other countries rose by 35.0% and 29.5% per year for fresh and frozen berries, respectively – Chile and Canada account for the majority of fresh and frozen imports, respectively. The increase in fresh demand has encouraged additional plantings of blueberries in many areas of the United States over the past two to three years, most notably in the southeast region. The southeastern U.S. share of total production rose from 14.1% in 1995 to 21.2% in 2009. The purpose of this study was to determine those factors that significantly influence blueberry supply and consumption. The increased popularity of blueberries has captured the attention of consumers especially with the increased knowledge surrounding the commodity and the push to eat healthier foods. A system of supply and demand equations are used to observe the factors that impact the blueberry industry and what affect they have on the quantity of utilized production in the United States. Data used in the regression analysis include: state domestic production data from the Economic Research Service (ERS), U .S. monthly frozen blueberry inventories from USDA, monthly imports and export volumes of frozen and fresh blueberries reported by ERS, grower prices received and disposable consumer income spent on food for home consumption, wage rates and herbicide costs for blueberry production from the National Agricultural Statistics Service, energy costs are proxied by the crude oil futures contract price from the New York Mercantile Exchange, and retail price data accessed from the Agricultural Marketing Service database. All price data were adjusted for inflation, and data are available for the time period 1998 to 2010. These results are essential to members of the blueberry industry in an effort to potentially improve overall profitability.