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Vegetable prices sky high with minimal relief in sight

Though three weeks of cold weather is getting most of the blame — or credit — for sending western vegetable prices through the roof, the warm spell during the late fall has had just as big of an impact.

“I’ve never seen a weather situation quite like this,” said Mark McBride, who is on the sales desk at Coastline, based in Salinas, CA. “We had very warm weather [in November and December] that put us three weeks ahead of schedule, which I’ve never seen before. That was followed by about three weeks when we had a frost situation every morning.”

The result has been gaps in supply for virtually everyone and across the board markets into the $20s and $30s for most conventional production, and as high as in the $50s for specific organic products such as Romaine hearts.

“We expect the higher prices to moderate some as we get into February, but I think we are going to be feeling the effects of this until the end of the desert deal,” said Mr. McBride.

Matt Seeley, vice president of marketing for The Nunes Co., also headquartered in Salinas, concurred. “We expect to have gaps in supplies for the foreseeable future,” he said. “It’s going to be a bumpy road through the end of the Yuma [AZ] deal.”

Typically, the desert region of California and Arizona is the main point of origin for a host of vegetable crops in the winter through the end of March. At that point, the traditional pattern was for the production of lettuce and leafy green items to shift to Huron, CA, for a four- or five-week period prior to the start of the coastal deals.

In recent years, some people have lasted a bit longer in the desert and started a little earlier in the Salinas Valley. In addition, the California coastal region running from Oxnard to Santa Maria has some production of vegetables all year long, so that area is also part of the mix.

Though the freezing temperatures were less acute along the California coast, the weather still has delayed production, adding to the decreased supplies from the West. Mr. McBride said that Coastline is seeing decreases in typical production at this time of year of about 25 percent, but it is highly dependent upon where the field is located.

Mr. Seeley echoed those comments, saying that every field and every shipper is different, but across the board supplies are down.

Romaine and Romaine hearts appear to be the hardest hit, with f.o.b. prices on Jan. 23 being more than $30 for conventional packs of each item. They were joined in that lofty price range by broccoli. Cauliflower was in the high $20s, while Iceberg lettuce, leafy greens, green onions and celery were in the mid-$20s. Some of the bunch items were in the low $20s, but basically everything that has a green tint to it is more than double its price of a year ago.

In 2012, the desert deal was somewhat of a disaster with below-cost pricing from start to finish.

The cold weather seems to have spared some other crops. Both strawberry and citrus growers in the Golden State seem to have avoided major frost damage, though there was some damage and effect on production.

Paul Story, director of grower relations for California Citrus Mutual in Visalia, CA, told The Produce News Jan. 22 that there is “some damage but to what extent we are not sure. There are some ice markings on some Navel oranges and there is some internal damage, but we do not think it will be a major factor.”

He said that this year’s Navel crop was estimated at 93 million cartons, which is a good-sized crop, though not one for the record books. Mr. Story said that some growers in isolated areas no doubt suffered major frost damage, but overall the size of the crop will be minimally affected.

The San Joaquin Valley experienced some low temperatures into the mid-20s for about 11 days in mid-January. Temperatures did drop to 24-25 degrees in some areas, but typically they didn’t hold that low number for very long.

Mr. Story said that the Navel oranges can withstand cold temperatures for longer than specialty citrus items, such as Mandarins.

“We do believe the damage to the Mandarins will be greater, but we won’t know the extent for a couple of weeks,” he said.

He added that Valencia oranges, which will be picked several months from now, also could have sustained some damage.

“But we are not picking those right now so we just won’t know until we get into that season,” said Mr. Story. “Because the Valencia crop is immature, it is more susceptible to the cold weather.”

Cindy Jewell, director of marketing for California Giant Berry Farms in Watsonville, CA, said that Southern California strawberry growers appear to have avoided any major frost damage.

“Like everyone else, we were ready for the cold temperatures,” she said. “We ran the wind machines and had helicopters in the field [to keep the air circulating], doing what we could do to minimize damage.”

She said that some flowers that would turn into fruit a few weeks down the road were lost, but supplies haven’t been materially affected. Supplies in January are always sketchy, but Ms. Jewell said Jan. 22 that volume was picking up and “we should be fine for our upcoming holiday [Feb. 14].”

Valentine’s Day is a big day for strawberry sales, and the Cal Giant executive said chains were readying promotions and she is confident that California producers would fill those orders.

On Jan. 22, the USDA Market News Service reported strawberry demand was very good with the f.o.b. price at a steady $13-$14. Ms. Jewell said that the f.o.b. price was holding steady and she expected that to be the case through Valentine’s Day.