ProducePay released its first report on ''Volatility in the Fresh Produce Industry''. The report provides an in-depth analysis of the key factors driving volatility in the fresh produce supply chain, challenges to agribusiness growth, and the global industry.

Price volatility is presented as the main concern. The paper uncovers that the fresh produce sector experienced 70% annualized volatility in 2023, with some commodities, such as mangoes, showing nearly 150% volatility at the point of shipment.

In addition, more than 10 commodities recorded more than 90% annualized volatility, underscoring the industry's challenge to achieve price stability.

“The main concern is price volatility, especially for stakeholders within the supply chain. This report aims to demonstrate how volatility is holding the industry back and why it is vital that all stakeholders work together to achieve price stability,” said Patrick McCullough, CEO of ProducePay.

Based on two years of annual surveys, the volatility report incorporates the latest results from the 2024 survey along with other research.

It highlights several key factors affecting volatility, such as extreme weather events, labor costs, and access to capital.

Key findings from the 2024 survey are:

• 56% of respondents reported an increase in extreme weather events compared to 2023
• 59% noted higher labor costs and persistent labor shortages
• 60% of marketers (who grow and buy produce)
• 53% of producers indicated worsening access to capital compared to 2023

The report also examines these challenges across three key stages of the supply chain:

1. Volatility in supply: analyzes the impact of climate change, rising labor costs in the United States, and differences in fresh produce financing between the United States and Latin America.
2. Volatility in distribution and transit: Focuses on the influence of fuel costs, driver shortages and the role of distribution intermediaries in maintaining quality during transit.
3. Volatility in trade: Highlights the challenges of supply-demand forecasting, speculation, and economic factors such as exchange rate fluctuations.

“Reducing volatility will not only help businesses throughout the supply chain grow but will allow the industry as a whole to thrive. In doing so, we reduce waste, reduce greenhouse gas emissions, and ensure food security for future generations,” concluded McCullough.

You can review the full report here.