Vegetable Transition Causing Major GapsApril 14, 2023
Temperatures reaching the upper 90s have basically brought an end to the winter vegetable deals in the California and Arizona deserts, resulting in supply gaps and stronger markets with some commodities headed into the FOB stratosphere.
“Two weeks ago, you couldn’t give cauliflower away, now it’s hard to find it,” said Denny Donovan, sales manager for Fresh Kist Produce in Santa Maria, CA, noting that his sales sheet listed 12-size flower at just shy of $70 per carton on Monday, April 10. “It’s going to be a very interesting season. There are going to be major gaps almost across the board for the next 60 days.”
He ran down his list of items and said many different commodities from broccoli to the lettuces are in short supply and seeing rising prices: “Celery is cheap and so is cabbage, but everything else is tight.”
Donovan, who has been selling vegetables for 45 years, said this may be a new experience. “Usually you can look out two, three, four weeks and make a pretty good guess of what’s coming. Not this year. I have no idea.”
He said many fields had to be replanted and others are experiencing low yields and light weight product. “I think we are going to be super short all the way through June. And I’m not sure what’s happening after that.”
Mark McBride, who has been patrolling the vegetable fields of the Salinas Valley for an equally long stint, is also experiencing a unique season. “It’s a bumpy transition to say the least,” he said on Tuesday, April 11. “Today is our (Coastline Family Farms in Salinas, CA) last day in the desert.”
He noted that cooler weather helped stretch the desert deal a couple of weeks beyond its traditional timetable, but that same cool weather combined with the rainy winter to delay Salinas Valley crops. “We are going to get started next week (week of April 17) in Salinas with some lettuce but not much else.”
McBride said most commodities are short but cauliflower and broccoli are very tight. “Cauliflower is in the $60s and a broccoli carton of crowns is at $50. Iceberg lettuce is $48 to $52 and it is strengthening Romaine and all the leaf items — red leaf, green leaf, butter lettuce. They are all doing well. We are definitely going to see very light volumes of many crops over the next few weeks.”
He echoed the sentiments of Donovan stating that the lettuce being cut is “light weight and small.”
McBride added that growers are typically very efficient timing the planting of many different fields to work like clockwork as the season goes on with one field ready to pop just as another finishes. “Now you can throw all the schedules out the window,” he said. “We are going to have a whole season that is going to wreak havoc.”
Though he has experienced the ups and downs and swings in supply many times before, the Coastline executive said it is just amazing how quickly the tide turns. “The demand in January, February and well into March was lackluster at best,” he reported. “Now demand exceeds supply across the board.”
Jason Lathos, manager of commodities at Church Brothers Farms in Salinas, said the short supplies currently being experienced were inevitable given all the rain, flooding and cold weather that hit the Salinas area this winter. He said of the five major core commodity groups – Iceberg lettuce, Romaine and the other leaf items, broccoli, cauliflower and celery — only celery is experiencing a down market, and that is starting to change. He went down the list noting the per-carton FOB prices: cauliflower is at $60-70, broccoli is at $50 and going up, Iceberg is $50 to $55 and the other lettuces are all in the $30 to $35 range. “Celery is starting to show signs of tightening and I expect it (the FOB price) will start stair stepping up soon.”
Lathos said he has been reluctant to predict the future of the vegetable markets because there have been too many missing pieces. He said the supply-and-demand situation is simply formulaic with the price fluctuating on those two factors. But because of all the rain and the uncertainty of how many acres were damaged and what would be re-planted, some of the variables that get plugged into the formula, so to speak, were missing.
But then demand increased, and Lathos said that uptick has caused a fairly severe reaction. “As soon as the Easter demand kicked in, supplies dropped off from the desert and we saw higher FOBs,” he said, noting the trend is moving quickly in that direction.
He added that there can also be a fear factor that plays into the equation. Lathos recalled that in late fall 2022 when the reverse transition was under way — Coastal California to the desert — supplies dipped with FOB markets climbing quickly beyond expectations, which didn’t create a smooth transition. Neither buyer nor seller ever wants to get caught on the wrong side of a spiraling market.
From The Produce News
Photo by Magda Ehlers