- BY TIM LINDEN | NOVEMBER 21, 2018
It’s been at least 10 months since “demand exceeds supply” has been used to describe western vegetable production, but it is the case now and producers are expecting the situation to last through the December holiday pull period.
“Buyers are scrambling, producers are scrambling, shippers are scrambling. It’s how it should be,” said Jason Lathos, manager of commodities for Church Brothers LLC. based in Salinas, CA.
Speaking of the supply situation across the board for vegetables from the West Coast, Lathos said that since the transition from the desert to California’s coastal production earlier in the year, when winter was turning to spring, producers have been constantly facing a supply-exceeds-demand situation. “It has been a pleasant change these last few weeks. But we dug ourselves a big hole and we just now are starting to fill it up,” Lathos told The Produce News on Nov. 19.
Lathos said cooler-than-normal temperatures in the desert production regions have slowed down production and resulted in lower-than-usual yields per acre. Consequently, producers have to “reach” to fill orders. That need to harvest some acres a bit before they have reached optimum harvest conditions tends to snowball and create a sustained market.
Lathos went down a list of items commenting on their current market price. The celery harvest is just getting started in Oxnard with early fields showing some problems causing the market to double to about $20 per carton. Broccoli and cauliflower yields are below budget, leading Lathos to believe strong markets will persist through the end of the year. Lettuce and leaf items are also seeing lower yields leading to an iceberg lettuce price of about $20 per carton with romaine trading near the $25 mark.
A review of the November 18 Fresh Crop Report from Salinas, CA-based Markon revealed many different crops with supply issues. Beside those commented on by Lathos, Markon noted that Bell peppers had “elevated” prices and “tight stocks,” the squash market is climbing and the asparagus “market is starting to inch up.” Markon did note that spring mix volume is sufficient to handle demand.
A mid-November market report from The Nunes Co. also noted that many vegetables are in short supply with strong markets, and concurred with the concept that the demand-exceeds-supply conditions could last into December. The writer of the report, Vice President of Sales Doug Classen, summed up the current marketing situation, “Supplies across many commodities are expected to be volatile over the next four to six weeks.”
Further down the coast, in Oxnard, CA, Brian Donovan, sales executive with Golden West Vegetables, relayed the same tight market news on many of the vegetable items that Golden West grows, ships and sells. He said the green onion market was very tight at $18 to $20 per carton and cilantro and parsley had also received a nice bump from the Thanksgiving pull.
Donovan spoke to The Produce News on the Monday before Thanksgiving when sales for that holiday period were quickly winding down. He opined that while the market for many vegetables will be “quiet” the week after Thanksgiving, he expected a quick return to strong markets in early December for the Christmas pull. For example, he predicted that the celery market would remain strong through the rest of the year. He also said the cabbage market has been strong for several weeks and should continue well into December, at which point the Christmas pull should give it another lift.
Lathos said the December market on many of the vegetable items would mirror the weather. Cool weather will decrease yields and cause a continuation of the strong marketing position for shippers. On Nov. 18, Yuma was expected to reach a high of 74 degrees. While that might seem to be balmy weather compared to New York, it’s below average for November in the California and Arizona deserts. Typically, about half the days in Yuma rise above 80 degrees in November. That just hasn’t been the case this year, and December’s average temperature is usually in the high 60s.
If the cool weather continues, Lathos predicted that the strong marketing position for western vegetable producers would be sustained for the foreseeable future.