November 16, 2024

• The inaugural report revealed 70% annualized volatility in fresh produce pricing during 2023, with more than 10 commodities experiencing more than 90% volatility.
• Additional factors contributing to volatility included extreme weather events, rising labor costs, and limited access to capital.

ProducePay, the agtech company on a mission to transform the global agricultural industry into a more predictable, connected and sustainable supply chain, has released its inaugural Fresh Produce Industry Volatility Report. The report provides an in-depth analysis of the key factors driving volatility in the produce supply chain, challenging growth for agribusinesses and the global industry.

Key Finding: Pricing Volatility #1 Concern

The report revealed that the fresh produce sector experienced an annualized pricing volatility of 70% in 2023, with some commodities, like mangoes, showing nearly 150% volatility at the shipping point. Over 10 commodities recorded more than 90% annualized volatility, underscoring the industry's challenge in achieving price stability. "The central concern is the volatility in pricing, particularly for stakeholders within the supply chain. This report aims to demonstrate how volatility is holding the industry back and why it’s vital for all stakeholders to work together in bringing more stability and predictability," said Patrick McCullough, CEO of ProducePay. Building on two years of Annual Industry Surveys, the Volatility Report incorporates the latest 2024 survey results alongside further research. The report highlights several key factors affecting volatility, including extreme weather events, labor costs, and access to capital. Key findings from the 2024 Industry Survey include:

•  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 both grow and buy produce) and 53% of growers indicated worsening access to capital compared to 2023.

The Volatility Report examines these challenges across three key stages of the supply chain:

1. Volatility at Supply: Analyzes the impact of climate change, rising labor costs in the U.S., and differences in financing fresh produce between the U.S. and Latin America.
2. Volatility in Distribution and Transit: Focuses on the influence of fuel costs, driver shortages, and the role of intermediaries in maintaining quality during transit.
3. Volatility when Trading: Highlights challenges in demand forecasting, supply disruptions, speculation, and economic factors like exchange rate fluctuations.

ProducePay believes that addressing volatility should be a primary focus, with a collective effort toward long-term solutions. “Reducing volatility will not only help businesses across the supply chain grow, but will enable the industry as a whole to thrive. By doing so, we’re cutting down on waste, lowering greenhouse gas emissions, and securing the food supply for future generations”, concluded McCullough. The full 2024 Fresh Produce Industry Volatility Report is available below:  DOWNLOAD REPORT