A couple of weeks of above-normal temperatures since the middle of January have helped bring on vegetables supplies in the western desert areas causing f.o.b. prices to come off their highs.

In early- to mid-January, light supplies had Iceberg lettuce prices approaching $30 per carton and most other vegetables items in the high teens or in the $20 arena. But high temperatures in the 70s in Yuma, AZ, and California’s Imperial Valley brought on fields more quickly and increased supplies.

“Most shippers are one to two weeks ahead of budgeted schedule,” said Butch Corda, general manager of Salinas, CA-based Ippolito International LP. “Two weeks of warm weather will do that.”

However, Corda said it is still the middle of winter with a lot of weeks of weather yet to play out. The ahead-of-schedule picking has the potential of causing a supply gap if the weather cools off and growing time increases.

“We are just going to have to wait and see,” he said, adding that most vegetable items have seen a bit of a downward price pressure over the last week or so.

Tanimura & Antle reported the same information in its regular supply outlook newsletter, Straight Talk.   The firm said that supplies have recovered a bit, “but there is still a shortage of most leafy vegetables shipped out of the desert.”  

On the issue of pricing, the report said, “We are in the middle of a market correction, but do not expect the price to bottom out too low. There just is not enough product, but $30 is too high for everyone to sustain long term.”

For the week of Jan. 19, the federal Market News Service reported Iceberg lettuce prices all over the board, ranging from the low teens to the mid-$20s.

Straight Talk explained this price variation as a function of the modern business model. More than 50 percent of the lettuce is processed, which typically is pre-sold at a contract price. Of the other 50 percent grown for bulk commodity sales, Straight Talk said about half of that is also pre-sold at a contract price.  That means that on any given day the upper limit of Iceberg lettuce available on a spot-market basis represents only one quarter of the volume.

When weather events decrease the overall volume, according to Straight Talk, much of the open lettuce is used to fill contracts and spot-market volume may only represents 10 percent of total supplies. That’s when the spot market price spikes, resulting in a big variation in quotes.

While Romaine and most of the other lettuces were experiencing situations similar to Iceberg lettuce, some of the hardier vegetables -- broccoli, cauliflower and celery -- saw demand and supply in sync with solid markets, but nothing out of the ordinary.

If the warm weather holds through the end of January, as is predicted in current 10-day forecasts, a more predictable supply situation will prevail in early February with shippers meeting their budgeted volumes. But that is dependent upon western temperature patterns.