And while it is tempting to blame consumers for waste, the truth is many of the losses — about ⅓ of all fruits and vegetables produced — are lost in the farming, processing, and distribution steps before it ever reaches the kitchen fridge. A couple years back, a grower got a 93 ton per acre harvest of processing tomatoes. Back when I worked in the extension office, the norm was 35, 37, maybe 42 tons per acre. But you know what was heartbreaking? Most of that big yield rotted in the field because the processor wasn’t prepared to take it in they were so overloaded
. But losses can also be more subtle: A winery producing premium bottles can find themselves producing in the low price category if they are not ready for the grapes when they are harvested. Sure, it’s getting sold as wine, but who wouldn’t prefer selling $30 bottles than $7?
These statistics have significant implications for the economics of grower-shippers. On the one hand, there’s a lot of money being left on the table, and operations that can reduce losses will be able to command the same prices (but at higher volumes) than operations that can’t control losses. On the other hand, there is significant opportunity for arbitrage, because in addition to direct losses, there are fluctuations in the price of the crop owing to mis-match in supply and demand. The party that can better predict scarcity or abundance in the future has an advantage in making advantageous future contracts.