Fresh produce value chain explained

Fruits and vegetables continue to offer exceptional value to consumers, both economically and nutritionally. Despite global food inflation, price increases for fresh produce have been lower than for other categories, making them a cost-effective choice. From 2015 to 2024, U.S. food prices rose 33.6%, but fresh fruit and vegetable prices increased only 16.7% and 18.4%, respectively. Similar trends occurred in Canada and the EU. This stability highlights the efficiency and resilience of the fresh produce supply chain amid economic and environmental pressures.

However, higher consumer prices do not mean higher profits for growers. In 2024, U.S. consumers paid more for fruits and vegetables, yet farm-level prices declined or grew slowly. Net farm income was projected to fall by 6.3%, showing persistent financial pressure on producers. Contributing factors include perishability, seasonal price fluctuations, and numerous cost pressures across the supply chain.

Extreme weather events—droughts, storms, heat waves—have increasingly disrupted production. In 2024, the U.S. faced widespread drought, while Europe saw both severe droughts and unusual rainfall. These conditions affected yields, quality, and prices. Adapting requires major investment in irrigation, protective infrastructure, and resilient crop varieties.

Agricultural input costs remain a serious burden. A 2024 Global Coalition of Fresh Produce survey showed that over 80% of industry operators experienced rising input costs, with construction materials up 56%, and fertilizers, fuel, and machinery also seeing sharp increases. Energy prices, linked to oil markets, further raise costs through their role in transport, fertilizer, and pesticide production.

Compliance with social, environmental, and food safety standards adds significant costs. International growers must meet multiple certification requirements. In South Africa, growers spend around 10% of gross income on compliance. In Europe, many must follow seven to nine sustainability certifications, with much overlap, increasing costs without necessarily improving results.

Shipping disruptions in the Red Sea and Panama Canal continue to strain supply chains. In 2024, rerouting due to conflict and weather increased transit times and freight costs. Port congestion, often caused by labor disputes, added delays. For fresh produce, these delays lead to spoilage, lower quality, and rising costs.

These combined challenges threaten the economic viability of the fresh produce industry. In 2024, 61% of surveyed operators reported breaking even or operating at a loss, with 70% considering leaving the industry within two to three years. Top concerns include rising input costs, low selling prices, and increasing labor and compliance expenses. Without systemic change, the future of fresh produce supply chains—and affordable access to fruits and vegetables—is uncertain.

© GCFPFor more information:Global Coalition of Fresh Produce
Email: info@producecoalition.net
www.producecoalition.net