Strong vegetable market should continue into winter production
Strong vegetable market should continue into winter production
Across the board, it has been a fairly strong summer for California producers of lettuce and other core vegetables, and all indications are that strong demand will be the order of the day for the foreseeable future.
According to the U.S. Federal State Market News Service reports in mid-September, many items were returning double-digit f.o.b. prices. While these prices couldn’t qualify the market as “hot,” they are certainly better than those of the previous few summers and allow most producers to put down the red pen and mark the ledger with black ink. For example, on Sept. 17, broccoli bunches were selling for $11-$13 and $13-$16 for crowns; cauliflower was in the $14 to $16 range; celery was hovering around $16; Iceberg lettuce was heading toward $13, and mixed lettuces were also in low double digits.
“It has certainly been a better summer price-wise than the past few summers,” said veteran salesman Mark McBride of Coastline in Salinas, CA. “I think we are seeing the effects of reduced plantings. A lot of growers haven’t done that well the past several years and they have curtailed their acreage that they have planted. Consequently, we are seeing higher prices this summer. There has definitely been a higher price structure.”
He added, “Supply and demand does work.”
Mr. McBride said the California coastal valleys of Salinas and Santa Maria typically remain the major sources of supply of lettuce through mid-October. Huron, which is located on the west side of the San Joaquin Valley, usually fills the lettuce supply gap in late October through much of November before harvest switches to the desert in California and Arizona. Some of the hardier items, such as broccoli and cauliflower, will continue in the Salinas area until the shift to the desert around Thanksgiving.
Mr. McBride sees no reason the strong demand situation will not remain that way through that time period. He added that there is indication that the early end of the desert deal might also experience a demand-exceeds-supply situation. “About 10 days or two weeks ago, some really bad storms hit the desert, which could affect supplies on the front end of that deal,” he said on Sept. 19.
Douglas Schaefer, president of EJ’s Produce Sales Inc., which is located in Phoenix, confirmed the bad weather report. “We had some terrible weather a couple of weeks ago,” he said Sept. 19. “That is going to create some gaps during the desert deal. There’s no doubt about it.”
He said the bad markets of past years should also influence the level of production in this year’s winter deal. “I’m not sure what it means, but we have heard that a lot of the smaller guys that typically have partnerships with the bigger shippers are looking for partners this year. Those joint ventures aren’t happening like they usually do.”
Mr. Schaefer speculated that the result might well be some growers sitting out the season, decreasing overall supplies. “That means there might be more control by the big guys. What do you call that there’s going to fewer coyotes and more wolves,” he quipped.
He said weather, as it usually does, has played a major role in the strong vegetable market this summer. “The extreme drought in the Midwest and the upper Midwest has knocked out some of those home-grown deals this summer.”
He said that has created increased demand for California vegetables. “And that hurricane that came through New Orleans went right through the South hitting Kentucky and Tennessee and knocking out some of those local tomato deals. It did a favor for California tomato guys. Usually they would be sitting on a $5 market at this time of year but now it’s a strong $7 to $8.”
He said a bug — the Bagrada bug, which is an enemy to both broccoli and cauliflower — also was a reason that market spiked earlier in the summer and remained strong for much of the summer. “That bug put a dent in harvesting of cauliflower and broccoli and raised the price overnight. We are still seeing those effects,” he said.