Delta Fresh dealing with winter doldrums, looking forward to better supply in March

Delta Fresh was seeing limited supply through January on some of its key winter items, but company officials are expecting relief in the coming weeks.

Until then, the Nogales, AZ-based shipper, which has traditionally specialized in tomatoes and cucumbers, is looking at high demand but very little product due to below-average temperatures and water shortages in growing regions, according to Frank Camera, vice president of sales, marketing and business development.

Camera said that Delta finished its Baja tomato deal strong in mid-December, but signs of trouble began to surface the week after Thanksgiving “as the Baja product had short shelf life due to hormone use and gassing, combined with the Sinaloa crop not starting as expected.”

He said weather was the main culprit, with lingering effects from Hurricane Lidia combined with unseasonably cool and cloudy weather later in the fall and major water shortages from lack of rains in the summer of 2023.

“Sinaloa was severely delayed on Romas, and we are just seeing them now but in small numbers,” Camera told The Produce News in late January. “Right now, we’re at a point where there is very little product. It’s been difficult with limited to no water supply as we are majorly stressed with water levels currently at about 25 percent in the reservoir with no good chance of replenishment until mid- to late summer of 2024. I don’t think we’ll see things get back to normal until mid-February or March when some other regions aside from Sinaloa are going.”

Cucumbers from Sinaloa also were affected by weather, and Camera said that while volume is starting to ramp up, sizing is an issue.

“The cooler weather in Sinaloa kept sizes small, and bigger fruit like the Super Select and 24-count that is favored by retailers is very limited,” he said. “It won’t be until March before we see some relief in the cuke market.”

Camera added that as of late January, cucumber prices were about double what they normally are for this time of year, in the range of $34-38 per box, with Supers getting as much as $40. But with limited supply and smaller sizing, Delta has not been able to take advantage of the market.

Colored Bell peppers also were in limited supply for the start of the colored Bell production in December and January. However, Delta was able to capitalize on this as its production is out of Guaymas and they saw a small but steady flow of colored Bells.

Delta, and demand was extremely high for product out of Mexico given that Spain was shut down for a period due to a phytosanitary issue.

One bright spot this winter for Delta was its soft squash deal, which is new to the company’s commodity portfolio. “So, the small amount we had, with extremely strong pricing, was additional revenue we did not have in the past,” he said.

“We’re coming into the final few weeks on our squash production for the winter months out of Guaymas, and the market has been on fire,” said Camera. “We’re usually looking at the mid-teens on pricing, but this year we were in the upper $30s FOB.”

Camera mentioned that volumes on all items will ramp up in March once the spring Sonora deal kicks off, but he added that it was still too early to know how much product will be available and how markets would react.

“Once we get to March we will see some relief, but until then we expect to be short on most of these items.”

A bit further down the road, Delta will usher in its spring watermelon and table grape programs, which are both highly anticipated by the company as they were items added to the commodity list last year.

“We’ll start with watermelons in late April this year with anticipation of several hundred loads, and then table grapes in mid-May,” said Camera. “Last year was our first year with table grapes and it was a very successful endeavor. We had 100,000 packages of green and red grapes, and this year we plan to increase that volume to 250,000 packages. We’re currently working on the details of our grape program with our retail partners.”

Camera added that having a diversified lineup is one of the key strategies for Delta to hedge against down markets for its traditional staple items.

“One of the main reasons I was brought on board last year was to help diversify our commodity list because of my prior experience, and guide the sales team in areas they had never traded before,” he said.

Delta moved into its brand-new state-of-the-art warehouse in early January, and Camera said things got up and running without a hitch.

“All certifications are in place for the USDA inspection area for tomatoes, and we’re set to start inspections on-site Feb. 5,” he said.

“This will bring a new level of efficiency and better controls to our operation.”