It appears as if the winter vegetable deal from the California and Arizona desert may be one for the ages. Decreased production in the shoulder deal from Huron in California’s San Joaquin Valley promises to get the winter deal off to a fast start in terms of pricing. Throw in weather issues that have generally decreased winter vegetable volume across the board and “demand exceeds supply” could well be the mantra for the next couple of months.
Salinas, CA-based Tanimura & Antle, one of the nation’s leading vegetable suppliers, puts out a newsletter every few weeks forecasting supplies for the following three weeks. The firm’s forecast for the three weeks prior to Thanksgiving succinctly echoes the comments that are being uttered by growers and shippers throughout the West.
“Salinas is melting and rain is forecasted for this weekend,” said the newsletter released on the last day of October. “Shippers expecting their desert deals to come in early and save the day will be quickly disappointed.”
There were several late summer storms that came roaring up from the Pacific Ocean through Baja California and into the California and Arizona deserts. These heavy rains during the planting season have caused the winter deal to be a bit late and with lighter supplies than usual. The T&A newsletter warns that “customers are going to have to be flexible and accept less than perfect product or run the risk of being short this Thanksgiving season.”
Mike Aiton, marketing manager for Prime Time Sales in Coachella, CA, which has winter deals in Baja California, mainland Mexico and Coachella, confirmed that supplies of the company’s top product — colored peppers — as well as tomatoes and a number of vegetable items are going to be short throughout November and even deep into December.
While he expected green Bell peppers to reach normal supply levels in early December, Aiton said the colored peppers and the popular minis won’t see volume return until early January.
Douglas Schaefer, president of EJ’s Produce Sales Inc. in Phoenix, told The Produce News on Wednesday, Oct. 29, that a very difficult situation was brewing.
“Salinas is about finished. Yields from Huron are off and Yuma is late. Strap on your boots and fasten your seat belts,” he said, indicating that a wild ride is in the works.
Schaefer said the August and September rains in Arizona greatly affected planting schedules and threw everyone off. “It’s all because of H20.”
T&A had a similar assessment.
“The California drought is a reality and we are only starting to see the challenges associated with it,” reported the T&A Straight Talk newsletter. “Whether it is the lack of water or the quality of water is diminished, our sizing and plant population in Huron is subpar, but at least we have a deal there.”
The last comment was in reference to the significant decrease in production that has occurred in Huron in recent years, largely because of lack of water. It is this lack of lettuce and other vegetable production during the pre-Thanksgiving period when demand is high that is setting the winter deal up for a very hot market.
On Monday, Oct. 27, the Iceberg lettuce market hit $ 20 f.o.b. Four days later, the federal Market News report put the Iceberg lettuce price at about $ 25 per carton and heading north. This year, the Thanksgiving demand was expected to kick in around Nov. 11 and last for 10-12 days.
Forecasting that time period, T&A believes Huron will be winding down and Yuma will be just getting under way. The company expects about 90 percent of its budgeted volume. In a very understated way, the newsletter states that the “market will remain strong.”
Mark McBride of Coastline in Salinas called the next couple of months “a very challenging situation.” He acknowledged being “old school” and said he is fearful that short supplies could lead to very high prices that would then choke off demand. But he said the short supply situation on lettuce is not going away until after Thanksgiving and possibly after Christmas.
Some other crops, such as broccoli and cauliflower, appear to be in better shape, but celery is also expected to be in short supply.
Come Thanksgiving, tables will be set and vegetables will be served. So whatever is in relatively good supply with reasonable prices will see big demand, which will also affect the post-Thanksgiving period.