World banana productions face imminent peril, with Del Monte stepping up safeguards in response to a looming agricultural threat.
In the face of global banana production shortages caused by the spread of diseases such as Black Sigatoka and Fusarium Tropical Race 4 (TR4), Fresh Del Monte has taken a comprehensive approach to ensure a stable supply and manage economic realities.
The company's strategy encompasses several key areas:
Biosecurity and Climate Resilience
Fresh Del Monte is strengthening farm-level practices to slow disease spread and adapt to shifting climate conditions. This includes implementing stringent biosecurity measures, promoting soil health through cover crops, organic inputs, and smarter irrigation practices, and leveraging pseudostem reserves in new ways to help plants better withstand drought.
Geographic Diversification
To mitigate risks associated with disease concentration, Fresh Del Monte is expanding banana production into new regions. One of their active developments for banana cultivation is in Somalia.
Development of Disease-Resistant Bananas
Fresh Del Monte's R&D team is actively trying to find varieties with tolerance to TR4. They are collaborating with Queensland University of Technology and Tropic to obtain banana lines for testing, and preparing for field trials of gene-edited bananas resistant to Fusarium TR4.
Pricing Adjustments
To reflect higher sourcing costs due to disease pressures and climate change impacts, Fresh Del Monte has adjusted pricing strategies. This is necessary for maintaining profitability amid narrow margins.
Improved Crop Management
Better drainage, irrigation, and agronomic practices are being used to sustain production despite disease and climatic challenges.
These efforts demonstrate Fresh Del Monte’s commitment to securing a stable banana supply while managing the economic realities of a constrained global market.
Regional Impact
In Colombia and Peru, both Black Sigatoka and TR4 have been reported. Other countries in the region have not confirmed the presence of TR4 as of now. In Costa Rica, banana production has declined by 23%, equivalent to a loss of 12.4 million boxes, due to adverse weather conditions and Sigatoka-related issues. The country has seen a 20% decrease in banana export volume this year.
Fresh Del Monte's chairman and CEO, Mohammad Abu-Ghazaleh, discussed the global banana production shortage on the company's Q2 earnings call. The company is prepared with proven methodologies from its operations in Asia for early detection, containment, and cost-effective disease management of TR4. They have established clear biosecurity protocols across their farms to prevent the introduction of TR4.
By implementing these strategic measures, Fresh Del Monte is demonstrating its resilience in the face of challenges and its commitment to maintaining a sustainable and reliable banana supply.
[1] Fresh Del Monte Press Release, "Fresh Del Monte Produce Inc. Announces Second Quarter 2023 Results" [2] Fresh Del Monte Technical Bulletin, "Fresh Del Monte's Response to Black Sigatoka and Fusarium Tropical Race 4" [3] Fresh Del Monte Sustainability Report, "Climate Change and Agriculture" [4] Fresh Del Monte Investor Presentation, "Fresh Del Monte's Approach to Sustainability"
- In order to combat global banana production shortages caused by diseases like Black Sigatoka and Fusarium TR4, Fresh Del Monte is employing comprehensive strategies that encompass biosecurity and climate resilience, geographic diversification, the development of disease-resistant bananas, pricing adjustments, and improved crop management.
- To counter risks associated with disease concentration, Fresh Del Monte is expanding banana production into new regions such as Somalia, as part of their geographic diversification strategy.
- Fresh Del Monte's R&D team is actively collaborating with institutions like the Queensland University of Technology and Tropic to develop disease-resistant banana varieties, particularly those that are tolerant to TR4.
- In an attempt to maintain profitability amid narrow margins, Fresh Del Monte has adjusted pricing strategies to reflect higher sourcing costs due to disease pressures and climate change impacts.
- The company's focus on climate change and agriculture, as outlined in their sustainability report, involves the use of better drainage, irrigation, and agronomic practices to sustain banana production despite challenges posed by disease and climatic conditions.
