The 3 Biggest Growth Hurdles for the Produce Industry
The produce industry currently faces many challenges, as we contend with record inflation, rising production costs, supply chain disruptions, and extreme weather events. This is why ProducePay took a deep dive into what the growth hurdles were for U.S. fresh produce growers and buyers, and conducted a survey among them that examined their day-to-day challenges.
The survey findings shine a light on the immediate needs around improving efficiency and profitability in the produce supply chain, just ahead of the International Fresh Produce Association’s (IFPA) Global Produce and Floral Show, which will feature the largest expo of the international produce industry.
A diverse group of produce growers and buyers across the U.S. participated in ProducePay’s national survey, and their input revealed a shared desire for greater access to trading partners and greater security in pricing across the produce industry.
These are the three most common concerns for produce professionals:
1. Finding consistent trading partners
Another highlight of the ProducePay survey included the need for both buyers and growers alike to find new, consistent and trustworthy commercial partners. According to the survey, nearly 43% of buyers indicated they have trouble finding consistent growers to purchase from, and 41% said they have difficulty finding enough supply from their current growers. Likewise, on the growers’ side, 50% of them said that they have difficulty finding consistent buyers and nearly 45% of growers agreed that being unable to expand and diversify their portfolio is stunting their business growth.
Since its launch in 2017, our Marketplace has been a premier platform for pre-vetting and matching growers and buyers, empowering them to make transactions directly with each other. Members of our Marketplace also receive the trade protection needed to give growers and buyers alike the assurance that they are conducting safe transactions and purchasing quality products.
2. Commodities’ Price Volatility
According to the survey’s findings, 48% of growers and 47% of buyers identified price volatility as one of the primary challenges to managing their day-to-day operations. Additionally, 68% of growers surveyed said that being able to reach fair pricing terms is their major pain point when it comes to trading.
This is why, to offer our Marketplace users more transparency into pricing data, we recently launched a pricing data visualization feature that allows buyers and growers to view pricing indexes of transaction histories from both USDA and ProducePay Marketplace transactions for over thirty different commodities. With this new tool, users are able to see pricing and movement data to evaluate fair pricing of their own trading on ProducePay’s Marketplace.
3. ESG and sustainable practices
As environmental, social and governance (ESG) strategies continue to become widely adopted by the produce industry, the survey found that sustainability was a significant priority for both growers and buyers:
- More than 43% of buyers said that sustainable practices are one of the requirements they look for in a grower, besides their production capacity and certifications.
- The majority (55%) of buyers also said their companies have carbon reduction targets
- 50% of growers said that implementing sustainable practices is extremely important to them.
- However, approximately 53% of the growers said that their primary challenge with implementing these practices is that market pricing does not allow them to recuperate their investment costs.
Providing growers with the instructional and financial resources to advance their sustainable efforts continues to be a priority for us. One way we’ve been innovating in this area is by announcing a first-of-its kind carbon offset program designed for the produce industry. This program will allow growers to earn residual income for their sustainability efforts by selling verifiable carbon offsets on the international market.
Do you face similar challenges in your business?
Learn more about how ProducePay is building a more connected and sustainable produce industry. Join our Marketplace to securely trade with a trusted counterparty and to establish long term relationships.