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Steady supplies, good quality are expected for most crops in the Nogales spring deal

by Rand Green | March 09, 2009
Winter has been a mixed bag for the Nogales, AZ, produce deal, with high volume and low prices on products in the tomato category for much of the winter and up-and-down volume on some vegetable items leading to volatile pricing that distributors say was at times high enough to discourage movement.

Other factors than just the supply situation out of Mexico were at play, however. Supplies in the marketplace at any given time were also influenced by the impact of weather events in other growing areas, in particular a freeze in Florida. Also, some produce marketers in Nogales believe that harsh winter weather in parts of the United States created diminished demand for certain items, resulting in sometimes sluggish movement even for products that were short.

But most of the distributors and brokers in Nogales The Produce News interviewed expect steadier supplies and steadier markets as well as good quality for most items in the spring deal. They are also hopeful that demand will improve with the arrival of better weather across the country.

Much of the production for the spring deal moves north from the state of Sinaloa into the state of Sonora. However, some items will continue to ship from Sinaloa as well, particularly products that are grown in greenhouses and other protective structures.

Open field tomato production was expected to diminish rapidly with the arrival of March, but hothouse and shadehouse rounds, Romas, grape tomatoes and other tomato products were expected to continue in good supply well into April, with some production extending into May. With a steady but more moderate volume and good quality coming out of Mexico, and with expected gapping in Florida due to bloom drop from the freeze, Nogales marketers hold high hopes that the dismal pricing of January and February will improve.

They are also hopeful that steadier supplies of some vegetable items as the northern districts kick in will lead to more moderate pricing and better movement.

One of the big items out of Sonora in the spring is watermelons, and those are expected to be available in promotable quantities beginning in early April, in contrast with winter's tight supplies and high prices.

"We are coming off of some extremely terrible pricing scenarios since Dec. 29," said Javier (J.J.) Badillo, Nogales-based director of diversified products for Calavo Growers Inc. "We believe we will see a decent end of the season as we move into the months of March and April. We are looking forward to finishing off with hopefully a better scenario than we have seen so far."

He said he expects "an excellent crop" with good quality in the months ahead.

"I think you are going to see a good marketing situation for most of the spring crop out of Nogales," said Chris Ciruli, chief operating officer of Ciruli Bros. LLC in Nogales. He anticipates strong Easter promotions that will help movement throughout March and going into the first part of April.

"We would like to see these markets on both tomatoes and Romas get up off the bottom a little bit to where everybody can make some money at it," said Joe Bernardi, president of Bernardi & Assoc. in Nogales. "For the month of March, and at least the first part of April, I think it is good news out of here, and [buyers] can have confidence in coming out here and buying and trying to plan ahead."

"The tomato market has been pretty sloppy," said Sergio Chamberlain, chief executive officer and sales manager of Meyer LLC in Nogales.

But with the winding down of open-field production in Mexico and the freeze damage that took place in Florida, "for the month of March, I am thinking ... the market should be a little stronger," he added. "March should be a good month for us as far as supplies of tomatoes."

There appears to be "a normal transition moving north," said Jesse Driskill, president of the Fresh Produce Association of the Americas in Nogales.

"I haven't heard anything that would lead me to think that this spring production, as far as tomatoes, is going to be any different from last year," except that the volume seems to have peaked a little earlier this year, so "we may see a little less production out of Mexico in the springtime than we did last year," Mr. Driskill said.

As for other items, based on "all the crop reports I have seen ... it is building up to be a very average year" all the way through the spring deal, he said.

The spring production out of Nogales is "important to the retailers and consumers to smooth the supply out" because of expected gaps in Florida's production, he said.

"Mexico is going to be able to fill those in, because we have had such excellent weather. The quality is just very good," and production is also good, "and I expect that to continue right through the peaks and valleys in Florida's production."