Celery will most likely continue its historic run on high f.o.b. prices through much of June, while Brussels sprouts have backed off a bit but are still trading at very good prices.
“Celery has been on a historic run that we have never seen before,” Russell Widerburg, sales managers of Boskovich Farms Inc., based in Oxnard, CA, said on June 4. “We just completed the fifth month in a row with celery (f.o.b.) prices above $20 and the third month in a row with prices above $40.”
In April and May, the prices never even dropped that low. “Since April, it has been a steady $68-$70 almost every day,” said Widerburg. “We had one short time that it dropped into the high $50s but most of the time, the market has been at $70, right where it is now.”
Widerburg said those with celery supplies continue to book orders with no buyer hesitation at the $70 price tag. Oxnard is still the major supplier of celery and should remain so through the first three weeks in June. Some Santa Maria and Salinas Valley growers, further up the coast, were starting to open up some celery fields in early June, but significant production was still a couple of weeks away.
The market may fall, but Widerburg is finished predicting what the market will do. He said decreased acreage, reduced yields, weather, disease and demand have all played roles in this historic run. Some people have claimed the juicing craze has played an out-sized role in increasing consumer desire for the veggie upending the normal supply-demand curve. Widerburg said the lack of supply has played a bigger role but “everyone is talking about it (juicing) so it must be having some effect.”
California production will definitely increase over the next month and Michigan celery producers will also join the fray in July.
Ocean Mist Farms, based in Castroville, CA, was one of the first grower-shippers in the Salinas Valley region with celery this summer and it is very much aware of the unheard of prices. “I’ve been in the deal for 30 years and have never seen anything like this,” said John Chobanian, celery commodity manager for Ocean Mist.
Chobanian agreed that the top factor in the historic run is lack of supply. He said growers dealt “with a lousy $8 market all last summer,” and noted that extended bad markets are often followed by fewer acres the next season. Add in those other factors, including excessive rains in February that made planting difficult, and you have demand far exceeding supply.
Chobanian reiterated that the pricing situation that has prevailed since January puts the industry in unchartered territory. He said a significant increase in supplies is on the horizon, which should lead to a corresponding drop in the f.o.b. price. He would not predict how far it would fall but history suggested it would fall.
“I’m not going to predict a crash in the market, but I know there is lot of celery out there that’s on its way,” he said, “and supply drives the market.”
The soon-to-be $64,000 question is how much has demand for celery, fueled by the juicers, increased. Ocean Mist Farms Senior Director of Marketing Diana McClean said it has played a role in this current supply shortage as it is an on-trend item receiving lots of kudos as a juicing ingredient. She said it makes sense that demand has risen.
Though Chobanian remains a bit skeptical about its role, he did reveal that Ocean Mist sold two straight loads of celery to a juicer for $70 per box last week. “I don’t ever remember selling a straight load to a juicer before,” he quipped.
Andrew Engles, assistant purchasing director for Markon Cooperative Inc., based in Salinas CA, agreed that the celery price would soon be on its way down. He said there is lots of celery in the field and within a couple of weeks (mid-July) the price should come off the historic highs.
He revealed that a drop in price had already occurred in the Brussels sprouts category. “We were $70 last week and we are only at $60 today,” he said on June 4. “That’s going to fall further.”
Like the others, Engles said both celery and Brussels sprouts have had amazing runs. “But each week we are seeing more supplies,” he said of the two commodities.
On the other end of the spectrum, iceberg lettuce has been selling in single-digits in recent weeks but there was strengthening during the first week in June. Engles said lower yields caused an increase in the price to the low teens but he did not expect it to “go crazy.” In fact, he said a look at last year’s numbers showed Iceberg lettuce also rose in the first two weeks of June of 2018.
Mark McBride of Coastline Family Farms, based in Salinas, CA, had a similar take on the Iceberg lettuce market. He said less acreage and weather-related issues reduced yields leading to the tightening of the market “giving a little glimmer of life” to the commodity. He said it might continue to climb incrementally but was not anticipating a major shift. California appears to have put its inclement weather in the rearview mirror as Salinas has 80-plus degree days in its near future and the San Joaquin Valley was finally experiencing temperatures that were topping 100 degrees.