Heat, rain, disease limit Western veg supply; record-breaking FOBs on tap
On Monday, Oct. 10, veteran vegetables salesman Denny Donovan was unabashed in his prediction for the following day: “I think we will see a record breaker on carton lettuce in tomorrow’s Market News (USDA’s daily Market News report). Today, I heard quotes of $55 (per carton) to near $70, but there’s nothing around.”
Donovan, who is sales manager for Fresh Kist Produce in Guadalupe, CA, said the FOB price on many of the core veg items “are a little bit crazy.”
He notes Iceberg lettuce, Romaine, most of leaf lettuces and broccoli crowns are trading near, if not above, all-time records. “We are seeing record, record high prices,” he reiterated, noting that Romaine is in the $55 to $60 range, and broccoli crowns were at $40 per carton.
Donovan said unusual weather is the culprit as it damaged some fields and created disease problems in many others. “I have lived within five miles of the ocean all my life and I have never seen the weather we had this year,” he said, explaining that from late August through the first week of September, the beaches along California’s Central Coast experienced 10 days of high heat and humidity, followed by a very atypical rainstorm. Those conditions brought tremendous disease problems, which has resulted in low yields and some quality issues. “We are selling broccoli crowns for $38 to $40 with quality issues,” he quipped. “If you can’t handle a little pin rot, don’t buy from us.”
He added that the supply situation on the lettuces does not have a clear end in sight. “This is going to last through the end of our season (Santa Maria Valley) in mid-November,” he said, adding that there may not be much relief until the desert production areas are in full swing after Thanksgiving.
Donovan said “celery has been a dog since we started in March. It has rarely got above $8. We are seeing a little bit of a bump today trading at $9 to $11. It is one item that is relatively cheap.”
He added that buyers are filling up their trucks with celery — which is increasing demand — simply to get a full load so the truck can head east. “All the trucks are being prorated on their lettuce orders and end up waiting around to fill up,” he reported.
About 150 miles north in the Salinas Valley, Mark McBride, a salesman with Coastline Family Farms, had a very similar story to tell. “This is the fourth year in a row that we have seen an escalation in disease problems at the end of the season,” he said. “In Iceberg, Romaine and green leaf, not so much in red leaf, we are seeing some fields with total losses and others with at least a big decrease in yields.”
To get ahead of the disease issues, McBride said growers are cutting fields early, which also reduces the per acre output. “When plants start dying, growers are trying to salvage whatever they can,” he said. “We are seeing a lot of young and lightweight product on the market.”
The result has been a great reduction in volume and the corresponding spike in FOB prices. On Monday, Oct. 10, the Coastline executive said he was quoting mostly $53-$60 on Iceberg with Romaine mostly $50 to $55. Broccoli was also suffering from disease issues, most notably pin rot. As a result, broccoli crowns were at $38 to $45 in Salinas with bunch broccoli being just a couple dollars less than that.
“Cauliflower tends to march to its own tune, and it has dropped off a bit this week to the low to mid-$20s,” he said.
Polishing up his crystal ball, McBride predicted that the market for the lettuces will remain strong through the Thanksgiving pull in mid-November. “I don’t think we will see relief until post-Thanksgiving, which will bring us into the transition period.”
Coastline is hoping to cut its first desert lettuce on Nov. 7, with all the other commodities transitioning throughout the month, with the transition being fully complete in early December. “But there are a lot of unknowns about the winter deal,” he revealed. “They had their own storm that came through Baja California and into Yuma and the Southern California deserts. We know the storms hurt the green onion deal in Mexico and some of the growers lost some early fields and had to replant (in Yuma, AZ, and the Imperial Valley of California.”
Weighing in on the situation in his company’s regular market report was Doug Classen, vice president of sales for The Nunes Co. in Salinas, CA. “The month of October is expected to be very challenging with supply, quality, and condition,” he reported. “Weather conditions and disease have impacted the supply side of the market. Most commodities have already reacted with prices.”
He noted mostly light supplies for the next month on Iceberg lettuce, Romaine, green leaf, red leaf and broccoli. Classen did agree that cauliflower supplies are picking up and celery has good supplies, but he did add that celery harvesting is “significantly ahead of schedule with concerns that the supply side may be affected for the Thanksgiving pull.”
The Nunes Co. is also a big player in organic vegetables, and in the market report Classen said that sector is facing the same supply and price challenges. “Insect pressure, disease, and weather conditions have impacted availability (and price) of all organic crops out of the Salinas Valley as we finish up the season before our transition to Yuma for the winter deal,” he said.