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Vegetable markets cool, but heavy rains could heat them up

by Tim Linden | March 24, 2011

After several weeks of incredibly hot markets on lettuce and many other vegetable items, good production beginning in mid-March sent the f.o.b. prices spiraling down on a number of different crops. In fact, Iceberg lettuce dropped by close to $20 a carton almost overnight.

However, it began raining in parts of California on March 19 and was expected to continue raining into the following weekend.

“It’s got to do something to this market,” Douglas Schaefer, president of EJ’s Produce Sales Inc. in Phoenix, told The Produce News March 23. “I do expect the prices to rebound at least by next week.”

He said that vegetable production from the Yuma, AZ, district picked up considerably during the week of March 14, which led to the precipitous fall in prices.

“Once the market started falling, demand stopped as no one wanted to order when the market was in flux,” Mr. Schaefer said.

The increased supply and lack of demand caused the lettuce market to fall from the $30 range to the $10-$12 level on March 21, according to the U.S. Market News Service.

Mr. Schaefer said that the desert areas in both Arizona and California were currently producing lettuce and other leafy green items at a good clip, and central Arizona was also in the mix. But the wet weather in California was hampering harvest along the coast and delaying the switch to the Huron district in San Joaquin Valley.

“Some guys were supposed to switch to Huron this week, but the rain stopped that. If they can’t get in next week, you’d expect the market to climb,” he said.

In the meantime, some of the vegetables coming from Mexico, such as squash and tomatoes, have seen a rebound in supplies, and the market on those items has dropped as a result.

Bill Donnelly Jr., a salesman with Ciruli Bros. LLC in Nogales, AZ, said that the lack of product earlier in the season has continued to work against the supplier community even though production has returned to normal levels.

“There were no supplies so we couldn’t set up promotions,” he said. “Now that we have the product, we have no promotions and demand isn’t very strong.”

Except for eggplant.

“You would think it was the cure for cancer,” Mr. Donnelly quipped.

He said that the cold weather in Mexico froze the eggplant fields and they have been very slow to recover. “We hear that volume is coming, but not until sometime in April,” he said March 23. “There is just no eggplant available.”

He said that the market price was $40-44 per carton, but most West Mexico vegetable distributors had none to sell.

Mr. Schaefer agreed, stating that it has been next to impossible to find eggplant during the past few weeks.

“There might be a little coming out of Florida next week, but California won’t have any until May or June — and those are only small deals,” he said. “I heard that one guy is bringing in some from Spain.”

Celery was another item affected by the inclement weather in California. Demand exceeded supply with the f.o.b. price approaching $20 per carton the week of March 21.

The California rain has also tightened strawberry supplies. During the week of March 14, volume was starting to ramp up with more than 3 million trays shipped that week. By late in the week of March 14 and early in the week of March 21, rains came and severely curtailed harvest operations.

Carolyn O’Donnell, a spokesperson for the California Strawberry Commission, said March 23 that volume would definitely be less and the reduction could continue into the week of March 28.

“It will all depend on the rain,” she said, indicating that the rain is keeping some growers out of their fields. “It’s been hit-and-miss. Oxnard got four to six inches, but the rain skipped most of the Orange County fields and they are having a normal harvest.”

The Easter holiday, which is on April 23 this year, is always a strong promotional period for the strawberry industry, and some were starting to worry about how these latest storms would affect that harvest period.

“It is still too early to worry about Easter,” said Ms. O’Donnell, “but if the rains continue and hurt the bloom, then that could be a problem down the road.”

On Monday, March 21, U.S. Market News reported the f.o.b. berry price at around $11 per tray. Mr. Schaeffer said that price would rise if the shortage continues. He noted that many retailers were on ad with berries and were having trouble finding sufficient quantities of good fruit to promote.