Supply gaps possible in Salinas
Supply gaps possible in Salinas
SALINAS, CA -- A relentless stretch of rainfall has backed up harvesting and planting operations in the Salinas Valley that may have implications in the marketplace in months to come.
Harvesting of most commodities in the Salinas Valley has begun within the past few weeks. The harvest is going for commodities such as Romaine, broccoli, cauliflower and spinach. The harvest for Iceberg lettuce starts this week. Ken Silveira, president of Salinas-based Tanimura & Antle, said that rainfall at this time of year is much more problematic than rainfall from January through March. In those months, two weeks of planting equals one week of harvest. But now, heading into the third week of April, one week of planting equals one week of harvest.
"In January, if you miss planting a week, you can make it up the following week," Mr. Silveira said, adding that such is not the case at this time of year. Any two-day coupling of rain can wipe out working in those fields for a week because the ground already is saturated. Ruts made by tractors can become depressions in which water can collect and in general make the harvesting effort more costly. Over the winter, cover crops add structure back to the soil in the Salinas Valley. T&A and many other Salinas Valley growers can't get into the fields to disc under cover crops and prepare the ground for the next planting. To disc under cover crops and get the beds in shape and planted takes weeks. So growers' planting schedules - determined months in advance - have largely become obsolete.
The circumstances suggest possible supply shortages for a number of commodities, such as the lettuces. As a result, the market may be setting up for price spikes in the summer months. This is good news for grower-shippers not under fixed-price contracts, but not very good news for competitors whose crop is under a fixed-price contract and who stand to not reap the rewards of price spikes.
"It's ideal to cover your contracts and have high market prices, but they don't usually come hand-in-hand," Mr. Silveira said. "People crying about [fixed-price] contracts now have enjoyed them the last 18 months when lettuce was $6."
T&A has some contracts with processors and retailers, some of which are fixed price and others that are based on volume but are at market price or trigger off market price. Historically, the highest prices for Iceberg lettuce -- where prices spiked to $40-$50 per carton -- were fueled by value-added processors needing to buy up lettuce fields in order to meet such contractual demands. Two such price spikes occurred in the past five years.
Bob Martin, general manager for King City, CA-based Rio Farms, thinks a turnaround in the weather is in store and that the disruption to supplies may be minimal. Rio Farms grows a broad variety of commodities for Salinas Valley companies such as Growers Express, River Ranch Farms, Taylor Farms and Fresh Express.
"I grew up here [in the Salinas Valley], and I've never, ever seen weather like this," Mr. Martin said, adding that he was able to plant for only a day or a day-and-a-half before more rain returned. "You get 100 acres in every few days. It's just another ordeal we have to go through."
King City sits about 40 minutes south of Salinas. The ground north of Gonzales - an in-between location - is in a bit worse shape than King City, Mr. Martin said. "Some ground has ruts that are two feet deep," Mr. Martin said. "Minimum tilling can't be done."
John Baillie, principal of Salinas-based Baillie Family Farms/Tri-Counties Packing and chairman of the Grower- Shipper Association of Central California, said that persistent rain has knocked planting and harvesting schedules out of whack. He anticipates harvesting perhaps a third less lettuce acreage as a result of weather conditions, and that may carry over to broccoli and cauliflower as well, he said.
"The tractor knocks out what isn't picked," Mr. Baillie said. "You mud out what's ready to harvest."
The harvests in Yuma, AZ, and El Centro, CA, wrapped up a few weeks ago, and the brief interim harvest in Huron, CA, has perhaps two weeks left. With quality an issue for product from the San Joaquin Valley, combined with conditions in the Salinas Valley, there are "all the makings of a $20 market," for a range of commodities such as lettuce, broccoli and cauliflower, Mr. Baillie said. Conditions have made it harder for Salinas Valley companies to meet U.S. No. 1 standards. "Salinas might have mildew issues," Mr. Baillie predicted.
Harvesting of most commodities in the Salinas Valley has begun within the past few weeks. The harvest is going for commodities such as Romaine, broccoli, cauliflower and spinach. The harvest for Iceberg lettuce starts this week. Ken Silveira, president of Salinas-based Tanimura & Antle, said that rainfall at this time of year is much more problematic than rainfall from January through March. In those months, two weeks of planting equals one week of harvest. But now, heading into the third week of April, one week of planting equals one week of harvest.
"In January, if you miss planting a week, you can make it up the following week," Mr. Silveira said, adding that such is not the case at this time of year. Any two-day coupling of rain can wipe out working in those fields for a week because the ground already is saturated. Ruts made by tractors can become depressions in which water can collect and in general make the harvesting effort more costly. Over the winter, cover crops add structure back to the soil in the Salinas Valley. T&A and many other Salinas Valley growers can't get into the fields to disc under cover crops and prepare the ground for the next planting. To disc under cover crops and get the beds in shape and planted takes weeks. So growers' planting schedules - determined months in advance - have largely become obsolete.
The circumstances suggest possible supply shortages for a number of commodities, such as the lettuces. As a result, the market may be setting up for price spikes in the summer months. This is good news for grower-shippers not under fixed-price contracts, but not very good news for competitors whose crop is under a fixed-price contract and who stand to not reap the rewards of price spikes.
"It's ideal to cover your contracts and have high market prices, but they don't usually come hand-in-hand," Mr. Silveira said. "People crying about [fixed-price] contracts now have enjoyed them the last 18 months when lettuce was $6."
T&A has some contracts with processors and retailers, some of which are fixed price and others that are based on volume but are at market price or trigger off market price. Historically, the highest prices for Iceberg lettuce -- where prices spiked to $40-$50 per carton -- were fueled by value-added processors needing to buy up lettuce fields in order to meet such contractual demands. Two such price spikes occurred in the past five years.
Bob Martin, general manager for King City, CA-based Rio Farms, thinks a turnaround in the weather is in store and that the disruption to supplies may be minimal. Rio Farms grows a broad variety of commodities for Salinas Valley companies such as Growers Express, River Ranch Farms, Taylor Farms and Fresh Express.
"I grew up here [in the Salinas Valley], and I've never, ever seen weather like this," Mr. Martin said, adding that he was able to plant for only a day or a day-and-a-half before more rain returned. "You get 100 acres in every few days. It's just another ordeal we have to go through."
King City sits about 40 minutes south of Salinas. The ground north of Gonzales - an in-between location - is in a bit worse shape than King City, Mr. Martin said. "Some ground has ruts that are two feet deep," Mr. Martin said. "Minimum tilling can't be done."
John Baillie, principal of Salinas-based Baillie Family Farms/Tri-Counties Packing and chairman of the Grower- Shipper Association of Central California, said that persistent rain has knocked planting and harvesting schedules out of whack. He anticipates harvesting perhaps a third less lettuce acreage as a result of weather conditions, and that may carry over to broccoli and cauliflower as well, he said.
"The tractor knocks out what isn't picked," Mr. Baillie said. "You mud out what's ready to harvest."
The harvests in Yuma, AZ, and El Centro, CA, wrapped up a few weeks ago, and the brief interim harvest in Huron, CA, has perhaps two weeks left. With quality an issue for product from the San Joaquin Valley, combined with conditions in the Salinas Valley, there are "all the makings of a $20 market," for a range of commodities such as lettuce, broccoli and cauliflower, Mr. Baillie said. Conditions have made it harder for Salinas Valley companies to meet U.S. No. 1 standards. "Salinas might have mildew issues," Mr. Baillie predicted.
