Israel: Competition, overproduction lead to low pepper prices

While Israeli pepper growers have, in the past, been able to carve out a piece of the European market in between the Spanish and Dutch seasons, the lengthening of those two seasons has squeezed out some smaller growers. But rather than cut down on the overall production, smaller growers have been absorbed by larger operations, and with total production continuing to increase in Europe, prices have remained low.

“We've never seen prices as bad as the ones we saw this year,” said Niva Ben Zion of Avniv. She explained that a mild autumn made for prodigious production, and the glut in supplies on the European market has led to low prices for growers.

“We had a lot of sun and some mild weather, so yields were great,” said Niva. “Agriculture-wise, it's been a success, but it hasn't been a success money-wise.” Though she noted that there are many inherent uncertainties when growing any crop, and one season can bring lots of production while the next can have a dearth of product, she thinks that the large number of growers, not just from Israel, supplying Europe with peppers has made for low prices for growers. Compounding the problem, when small growers go out of business, the total production still doesn't go down because larger growers simply absorb the smaller ones and maintain the current over-abundance of produce which, according to Niva, leads to skewed prices.

“Growers aren't growing any less,” said Niva. “We should, all of us, consider how to grow less, because the market is not big enough for all of us.” Especially for Israeli growers, she added, the market is not very sustaining.

“Prices are also low because we have to compete with Spain and Holland,” said Niva. “While in the past there was a window of opportunity for Israeli produce, now it's more difficult because both the Spanish and the Dutch are starting earlier and finishing later.” Because of the relatively short shelf life of the product, shipping to markets farther away seems an unlikely solution, and with rising labor and input costs, Niva noted that it's becoming very difficult for pepper growers to garner the prices necessary to sustain their operations.

“In the last three years, pepper growers have lost money,” she said. “It is becoming more and more difficult to make a living out of growing peppers.”