Righetti Farms owner: Produce contracts can have an impact on scarce-supply seasons
Righetti Farms owner: Produce contracts can have an impact on scarce-supply seasons
Rio Rico, AZ — “Restaurants can’t take a marker and change their menu,” Mike Righetti, the owner of Righetti Farms LLC, observed.
Righetti Farms specializes in mixing loads of Mexican produce imported into Nogales and distributing those mixers to foodservice clients in the U.S. and Canada.
Menus’ permanent ink creates the need for foodservice operators to contract prices with their produce suppliers, such as Righetti.
Righetti has written foodservice contracts for more than five years “but they’re becoming more commonplace,” he said.
Still, he cautioned, “There are so few people that you trust with contracts, you’ve got to be really careful” with the practice. As the procedure has become more sophisticated, variable contracts have arisen that allow prices to step up if high charges paid to growers are sustained for an extended period.
Righetti this season has contracts with six foodservice companies. The company also has grower contracts, but those are fewer.
Generally speaking, for the produce industry, the presence of contracts tends “to drive prices higher, faster,” Righetti said. In a season like early 2016, “on an under-supplied market, the majority of the product is sold before the sales guy starts his day.”
Righetti has been in the business since 1992. Until this winter, “I’ve never seen markets climb this fast,” he said.Over one weekend this year, “zucchini was $18 on Friday and by Monday it was $28. In the old days, you didn’t see that. Unless it was a known event.”
Starting in October, the Mexican deal was characterized by a historically strong El Niño bringing a great deal of rain and unseasonably chilly temperatures. But there was no single, spectacular event along the way that caused reduced production.
For suppliers of seasonal Mexican product, most of the contracts are “written in September or October before the knowns are known,” Righetti said.
But Righetti knows for sure that the zucchini side dish on the menu won’t go from $1 to $1.75 next week.
