Western veg prices rising with tighter supplies expected in November
Western veg prices rising with tighter supplies expected in November
An early-October supply-exceeds-demand situation for Iceberg lettuce and other vegetable crops has righted itself and western grower-shippers are expecting shorter supplies and higher prices as the Thanksgiving holiday pull begins to materialize.
Already on Oct. 14, cauliflower was selling in the high teens while broccoli was in the mid-teens and Iceberg lettuce was coming off its summer lows in the $11 range.
Jason Lathos, manager of commodities for Salinas, CA-based Church Bros. LLC., said that since Aug. 1 warm weather in the Salinas Valley has reduced the growing time for many fields, resulting in them being harvested earlier than expected. While at times that has created greater supply than demand, it has also set the stage for a gap at some point.
Cauliflower and broccoli are two of the vegetable items that are expected to see a demand-exceeds-supply situation as the Thanksgiving holiday approaches.
“I was out [in an Iceberg lettuce field] yesterday that we had scheduled to be cut the week of October 26,” Lathos said on Oct. 14. “That was going to be our last week in Salinas. We are cutting that field tomorrow.”
He added that the transition to Huron in Central California was expected to take place during the week of Oct. 26, with the first cuttings from Yuma, AZ, in the desert starting a week later. The Church Bros. executive said not only are some of these later fields earlier but they are lighter in yield as well.
“I suspect that some growers are going to expect 1,000 cartons per acre and they are only going to end up with 500,” said Lathos. “That’s going to mean a jump in the carton price and the processors [who cut for pounds] are going to be eating up more acres.”
Denny Donovan, sales manager for Fresh Kist Produce LLC, which sources most of its production at this time of year from the Santa Maria Valley of California, noted the same early arrival of many fields.
“From late spring throughout the summer, fields have been ready 12 to 15 days early on average,” he said.
Warm mornings, days and nights are the culprit. While the quick-growing lettuce created a supply-exceeds-demand situation earlier this month, Donovan said the market bottomed out during the week of Oct. 5 and started to show strength this week (Oct. 12). “I expect a price increase next week.”
He said it is difficult to predict when the gap will hit, but at some point “the weather will turn cold and the fields will slow down. I don’t have my crystal ball out, but there is going to be a hole (in supplies) at some point.”
He noted that cauliflower and broccoli are moving into their high-demand period as the holiday season approaches and the market is reflecting that increase in demand.
Adding to the decrease in vegetable supplies nationwide, Lathos said the first frost is expected in eastern Canada this week ending that production region, and rain has wreaked havoc with the end of the summer local deals along the Eastern Seaboard of the United States.
“From here on out, the West is going to be the only supplier for most vegetables,” he said.
Salinas, CA-based Tanimura & Antle’s Straight Talk supply forecast newsletter painted the same picture for the Oct. 19 to Nov. 7 time frame (weeks 42-44).
The newsletter noted that the temperature in Salinas on Tuesday morning, Oct. 14, was 69 degrees, “at least 25 degrees warmer than normal this time of year.” It said that supplies would start to decrease and with regard to lettuce, and buyers should “expect the market to go up.”
The newsletter also reported strong markets for celery and cauliflower, and said that while broccoli “quality and volume looks good for the next three weeks,” the firm was proceeding with caution with regard to Thanksgiving ads.
On Oct. 15, Lathos of Church Bros. said calls for Thanksgiving orders were already coming in. While 20 years of experience gives him a good handle on traditional demand and market prices, he said prices on many vegetable items probably will be higher than usual this year.