Hot pepper market suffering under federal probe
Hot pepper market suffering under federal probe
With federal disease officials having turned their attention to Serrano and Jalape?o peppers in their ongoing Salmonella outbreak probe, some importers of hot peppers from Mexico have stopped shipping product.
According to a U.S. Food & Drug Administration update posted Monday, July 14, since April, 1,167 people infected with Salmonella Saintpaul with the same genetic fingerprint have been identified in 42 states, the District of Columbia and Canada.
Curtis DeBerry, chief executive officer and president of Boerne, TX-based Progreso Produce Co., said that a load of peppers has to be tested for Salmonella at the border before it can cross into the United States from Mexico.
Once a load has been tested, it can be transported to a warehouse. But the peppers cannot be shipped for seven days or until test results come back, whichever comes first. Mr. DeBerry told The Produce News July 16 that the current turnaround time he is facing for results is five to seven days.
Unfortunately, the Food & Drug Administration doesn't have testing labs near all main entry points along the Mexico border, Mr. DeBerry said. For Progreso, this results in additional time needed for the FDA to pack up testing samples in Pharr, TX, and send them to its lab in Dallas.
The wait cuts into shelf life considerably, and as a result, Progreso has stopped bringing hot peppers across the border for now. The company had been bringing in three loads per week from Mexico, so the loss is a "pretty good income hit" at this time of year, Mr. DeBerry said.
"The market's at $30 per box right now," Mr. DeBerry said July 16, conceding that lower supplies as a result of the Salmonella probe accounts for the boost in prices. "It was $16 or $17 before [the Salmonella probe]."
Progreso grows hot peppers year round in Mexico. Mr. DeBerry told The Produce News that the company is being conservative in its approach and has cut its pepper plantings in Mexico in half. It will reassess the situation in 30 days.
"You put them in the greenhouse now and you don't harvest for 120 to 140 days," Mr. DeBerry said, adding that by the time those peppers are ready for harvest, the concerns regarding peppers should have shaken out.
With peppers, retailers in Texas are Progreso's primary customer base, although it does sell some to foodservice. Under the current situation, the economics don't make sense for Progreso or its retail customers, and most of its retail customers have stopped carrying hot peppers for now.
While Progreso's customers are understanding of the situation, if Progreso were to stop growing peppers entirely, it would lose its customer base, Mr. DeBerry said.
Lose an account in today's environment and it's even tougher to win it back later, Mr. DeBerry said.
Because of the timing, Progreso was not affected by the Salmonella probe when the focus was on tomatoes, and damage to the hot pepper market is not as pronounced as the federal Salmonella probe into tomatoes or the E. coli probe into spinach in 2006. Industrywide, the consumption rate of hot peppers is far less than tomatoes or spinach, Mr. DeBerry said.
Still, the impact of the probe extends beyond Serrano and Jalape?o peppers. Progreso has stopped shipping Haba?ero peppers and Chile Papines as a result of the probe and consumer uncertainty. Its Haba?ero pepper sales are about 1 percent that of its Jalape?o peppers and its Chile Papines sales are about one-tenth of a percent of its Jalape?o pepper sales.
Mr. DeBerry said that he is noticing that sales of other items not under the probe "are slower than they should be," blaming the lengthy ongoing probe for taking a toll on consumer confidence in fresh produce.
Raul Cano, co-owner of produce distributor Grande Produce in Hidalgo, TX, said that he stopped importing Jalape?os as a result of the Salmonella probe. He said that shelf time has been reduced to the point that hot peppers aren't worth handling now.
"It takes two or three days from the harvest to get it, two or three days to sell it, two or three days for the customer to receive it," Mr. Cano said, adding that just one or two days of shelf life remain for consumers to buy the product. He also uses Pharr, TX - less than 10 miles from his Hidalgo headquarters - as the entry point for product from Mexico.
Mr. Cano said that the federal Salmonella probe has everyone afraid to buy peppers from Mexico. Earlier, when the FDA had tested Grande Produce's Roma tomatoes from Mexico, they sent test samples to a lab in California, he said. He also said that the FDA recently tested some of Grande Produce's cilantro and that he's waiting for those test results.
According to a U.S. Food & Drug Administration update posted Monday, July 14, since April, 1,167 people infected with Salmonella Saintpaul with the same genetic fingerprint have been identified in 42 states, the District of Columbia and Canada.
Curtis DeBerry, chief executive officer and president of Boerne, TX-based Progreso Produce Co., said that a load of peppers has to be tested for Salmonella at the border before it can cross into the United States from Mexico.
Once a load has been tested, it can be transported to a warehouse. But the peppers cannot be shipped for seven days or until test results come back, whichever comes first. Mr. DeBerry told The Produce News July 16 that the current turnaround time he is facing for results is five to seven days.
Unfortunately, the Food & Drug Administration doesn't have testing labs near all main entry points along the Mexico border, Mr. DeBerry said. For Progreso, this results in additional time needed for the FDA to pack up testing samples in Pharr, TX, and send them to its lab in Dallas.
The wait cuts into shelf life considerably, and as a result, Progreso has stopped bringing hot peppers across the border for now. The company had been bringing in three loads per week from Mexico, so the loss is a "pretty good income hit" at this time of year, Mr. DeBerry said.
"The market's at $30 per box right now," Mr. DeBerry said July 16, conceding that lower supplies as a result of the Salmonella probe accounts for the boost in prices. "It was $16 or $17 before [the Salmonella probe]."
Progreso grows hot peppers year round in Mexico. Mr. DeBerry told The Produce News that the company is being conservative in its approach and has cut its pepper plantings in Mexico in half. It will reassess the situation in 30 days.
"You put them in the greenhouse now and you don't harvest for 120 to 140 days," Mr. DeBerry said, adding that by the time those peppers are ready for harvest, the concerns regarding peppers should have shaken out.
With peppers, retailers in Texas are Progreso's primary customer base, although it does sell some to foodservice. Under the current situation, the economics don't make sense for Progreso or its retail customers, and most of its retail customers have stopped carrying hot peppers for now.
While Progreso's customers are understanding of the situation, if Progreso were to stop growing peppers entirely, it would lose its customer base, Mr. DeBerry said.
Lose an account in today's environment and it's even tougher to win it back later, Mr. DeBerry said.
Because of the timing, Progreso was not affected by the Salmonella probe when the focus was on tomatoes, and damage to the hot pepper market is not as pronounced as the federal Salmonella probe into tomatoes or the E. coli probe into spinach in 2006. Industrywide, the consumption rate of hot peppers is far less than tomatoes or spinach, Mr. DeBerry said.
Still, the impact of the probe extends beyond Serrano and Jalape?o peppers. Progreso has stopped shipping Haba?ero peppers and Chile Papines as a result of the probe and consumer uncertainty. Its Haba?ero pepper sales are about 1 percent that of its Jalape?o peppers and its Chile Papines sales are about one-tenth of a percent of its Jalape?o pepper sales.
Mr. DeBerry said that he is noticing that sales of other items not under the probe "are slower than they should be," blaming the lengthy ongoing probe for taking a toll on consumer confidence in fresh produce.
Raul Cano, co-owner of produce distributor Grande Produce in Hidalgo, TX, said that he stopped importing Jalape?os as a result of the Salmonella probe. He said that shelf time has been reduced to the point that hot peppers aren't worth handling now.
"It takes two or three days from the harvest to get it, two or three days to sell it, two or three days for the customer to receive it," Mr. Cano said, adding that just one or two days of shelf life remain for consumers to buy the product. He also uses Pharr, TX - less than 10 miles from his Hidalgo headquarters - as the entry point for product from Mexico.
Mr. Cano said that the federal Salmonella probe has everyone afraid to buy peppers from Mexico. Earlier, when the FDA had tested Grande Produce's Roma tomatoes from Mexico, they sent test samples to a lab in California, he said. He also said that the FDA recently tested some of Grande Produce's cilantro and that he's waiting for those test results.
