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Hot lettuce prices anchor strong marketing situation for a number of crops

A demand-exceeds-supply situation led to sharply higher prices for Iceberg lettuce the week of May 16, with the situation expected to remain in place until at least early to mid-June.

Several other fruit and vegetable crops were also experiencing strong markets as unseasonably cool weather and rains cut into the volume of supplies from California.

Russell Dutra, an accounts and product manager for Growers Express LLC in Salinas, CA, told The Produce News May 18 that “lettuce supplies hit a little bit of a wall this week. Numbers are down and demand is up. The market should stay strong for the next couple of weeks, but it could come off a little bit next week.”

Mr. Dutra said that several other vegetables crops are also in short supply with good demand creating strong markets.

“Cauliflower came off last week, and we had good supplies Monday, Tuesday and Wednesday [of the week of May 16]. But moving into the weekend and next week, supplies are going to be off again, and the market should fluctuate.”

Matt Seeley, vice president of marketing for The Nunes Co. Inc. in Salinas, CA, concurred. “There is very good action on a lot of different items right now, and the market is strong,” he said.

He said that weather is the culprit, as some inclement weather during the late-winter planting season combined with cool and rainy weather recently created some supply gaps that have resulted in a good marketing situation for shippers.

Mr. Seeley said that the strong markets should remain for the next several weeks.

Of course, as summer heats up and the coastal valleys of California move into full production, supplies should improve and the accompanying f.o.b. markets should fall.

Articulating the current short-supply situation to the industry was Tanimura & Antle’s “Straight Talk” news bulletin that is e-mailed to its customers. In part, the bulletin, dated May 16, said that the grower-shipper will be able to fulfill only 60-80 percent of its Iceberg lettuce orders in weeks 21, 22 and 23, which runs from May 22 to June 11. The bulletin pointed to a 10-day planting gap in early March as well as some disease problems caused by the cool wet spring.

T&A pointed out that the supply problem is unique to Iceberg lettuce and that the firm’s other lettuce varieties, including its specialty lettuces, are in good supply.

A look at the U.S. Federal State Market News Service Report showed that Iceberg lettuce prices were in the $20-21 range, while cauliflower and broccoli were in the low to mid-teens. Celery, which has been in a demand-exceeds-supply situation for the last couple of weeks, remained as such with markets over $20 per carton. Supplies of celery, however, are beginning to increase. Romaine and other lettuce items were trading for only half the f.o.b. price of Iceberg lettuce.

Asparagus is another item that remains in short supply. Over the past several years, California’s summer asparagus production has declined, leading to a chronic shortage problem at this time of year.

Since early May, asparagus as been trading for more than $45 per carton, and that remains the case. On May 18, Market News Service reported the price at $48 to $55 per 28-pound carton.

“That’s not going to change too much for the time being,” said Mark Cotton, sales manager for Growers Direct Marketing LLC in Stockton, CA. “The market has been good, and it should remain so. It is just a reflection of the overall decrease in supplies.”

Another hot marketing situation is shaping up for cherries. Cool weather during the bloom created a lighter crop this year, and cool weather during spring delayed production at least a week.

The California Bing cherry harvest was not expected to begin until around May 23, and the deal should last about a month. With the slow start to the Bing crop, Mr. Cotton said that retail demand for the early varieties has been very strong with the market hovering above $55 per carton.

“With Washington being late, I think this is going to be a very good year for California Bings,” he said. “We got hurt a little with the earlier rains, but we have a good crop.”

The California Cherry Advisory Board said that this year’s crop should total about 162 million pounds, with Bings representing about 45 percent of that total.

Oregon and Washington are the other major sweet cherry-producing states, with their production expected to begin in late June.

Of course, there are marketing opportunities out there. Red Bell peppers, which have been in short supply for several months, have finally seen their production increased significantly over the last week or two.

Mike Aiton, marketing manager for Prime Time Sales LLC in Coachella, CA, said that both red and green Bell peppers are finally in very good supply.

“The red pepper market fell significantly last week as supplies increased,” he said May 18. “We are moving into peak supplies and should be there by the first week of June. Green Bell peppers got started a few weeks earlier, and they are already in very good supply. At this point, we have promotable supplies, and we should have plenty of supplies from now until October.”

Mr. Aiton said that this late spring and early summer time period is traditionally a very good time for Bell pepper promotions, and this year appears to be no different with promotional activity on the rise.

He said that the same is true for California sweet corn, which has also seen a significant rise in production in the last couple of weeks.

“There are great promotional opportunities for sweet corn, and retailers are taking advantage right now,” Mr. Aiton said.