Supply gaps possible in Salinas
April 24, 2006
by Brian Gaylord
SALINAS, CA -- A relentless stretch of rainfall has backed up harvesting and planting operations in the Salinas Valley that may have implications in the marketplace in months to come.
Harvesting of most commodities in the Salinas Valley has begun within the past few weeks. The harvest is going for commodities such as Romaine, broccoli, cauliflower and spinach. The harvest for Iceberg lettuce starts this week. Ken Silveira, president of Salinas-based Tanimura & Antle, said that rainfall at this time of year is much more problematic than rainfall from January through March. In those months, two weeks of planting equals one week of harvest. But now, heading into the third week of April, one week of planting equals one week of harvest.
"In January, if you miss planting a week, you can make it up the following week," Mr. Silveira said, adding that such is not the case at this time of year. Any two-day coupling of rain can wipe out working in those fields for a week because the ground already is saturated. Ruts made by tractors can become depressions in which water can collect and in general make the harvesting effort more costly. Over the winter, cover crops add structure back to the soil in the Salinas Valley. T&A and many other Salinas Valley growers can't get into the fields to disc under cover crops and prepare the ground for the next planting. To disc under cover crops and get the beds in shape and planted takes weeks. So growers' planting schedules - determined months in advance - have largely become obsolete.
The circumstances suggest possible supply shortages for a number of commodities, such as the lettuces. As a result, the market may be setting up for price spikes in the summer months. This is good news for grower-shippers not under fixed-price contracts, but not very good news for competitors whose crop is under a fixed-price contract and who stand to not reap the rewards of price spikes.
"It's ideal to cover your contracts and have high market prices, but they don't usually come hand-in-hand," Mr. Silveira said. "People crying about [fixed-price] contracts now have enjoyed them the last 18 months when lettuce was $6."
T&A has some contracts with processors and retailers, some of which are fixed price and others that are based on volume but are at market price or trigger off market price. Historically, the highest prices for Iceberg lettuce -- where prices spiked to $40-$50 per carton -- were fueled by value-added processors needing to buy up lettuce fields in order to meet such contractual demands. Two such price spikes occurred in the past five years.
Bob Martin, general manager for King City, CA-based Rio Farms, thinks a turnaround in the weather is in store and that the disruption to supplies may be minimal. Rio Farms grows a broad variety of commodities for Salinas Valley companies such as Growers Express, River Ranch Farms, Taylor Farms and Fresh Express.
"I grew up here [in the Salinas Valley], and I've never, ever seen weather like this," Mr. Martin said, adding that he was able to plant for only a day or a day-and-a-half before more rain returned. "You get 100 acres in every few days. It's just another ordeal we have to go through."
King City sits about 40 minutes south of Salinas. The ground north of Gonzales - an in-between location - is in a bit worse shape than King City, Mr. Martin said. "Some ground has ruts that are two feet deep," Mr. Martin said. "Minimum tilling can't be done."
John Baillie, principal of Salinas-based Baillie Family Farms/Tri-Counties Packing and chairman of the Grower- Shipper Association of Central California, said that persistent rain has knocked planting and harvesting schedules out of whack. He anticipates harvesting perhaps a third less lettuce acreage as a result of weather conditions, and that may carry over to broccoli and cauliflower as well, he said.
"The tractor knocks out what isn't picked," Mr. Baillie said. "You mud out what's ready to harvest."
The harvests in Yuma, AZ, and El Centro, CA, wrapped up a few weeks ago, and the brief interim harvest in Huron, CA, has perhaps two weeks left. With quality an issue for product from the San Joaquin Valley, combined with conditions in the Salinas Valley, there are "all the makings of a $20 market," for a range of commodities such as lettuce, broccoli and cauliflower, Mr. Baillie said. Conditions have made it harder for Salinas Valley companies to meet U.S. No. 1 standards. "Salinas might have mildew issues," Mr. Baillie predicted.
IFPA conference to address technical and management issues
April 23, 2006
by Joan Murphy
WASHINGTON -- Expect to see an expanded conference program focusing on technical issues such as packaging and food safety, but also a new attention to business management at the April 26-29 International Fresh-cut Produce Association meeting in Baltimore.
While the conference program has been expanded, the buzz is likely to be about the newly announced plans to merge IFPA with the United Fresh Fruit & Vegetable Association. Despite the consolidation of the two trade associations, the groups plan to continue the fresh-cut expo in years to come, as the groups agree it offers targeted information and networking opportunities to a different audience.
"These are two very different trade events," said IFPA President Jerry Welcome, adding that he expects the fresh- cut expo to grow in the years to come as a result of the planned merger.
With more than 20 sessions, IFPA has greatly expanded the conference offerings for Fresh Cut Expo 2006 to help fresh- cut produce firms with a myriad of technical issues facing the growing industry, as well as to learn about the latest trends in business management.
For example, the conference is hosting a session on managing a diverse workforce that can pose challenges to management, he said. Carlos Conejo of Multicultural Associates will lead the seminar on this topic. IFPA is hosting a three-session program, "The Keys to Successful Project Design," on what it takes to put together a first-class operation, whether a company is building a new plant or expanding, said Mr. Welcome. The group is bringing in new faces from the federal government to talk about food defense and food-safety issues, thanks to newly named Vice President of Technical Services David Gombas. "Gombas has really brought a whole new approach," Mr. Welcome said, by bringing in scientists who can discuss the latest research on fresh and processed produce.
Food defense experts Megan Coward of the Federal Bureau of Investigation, Amy Barringer of the Food & Drug Administration and John Martin of the Department of Homeland Security will talk about the new agroterrorism initiative in the food defense seminar.
"With the government and media so keenly focused on safety issues related to fresh produce right now, we knew it was critical to place a strong emphasis on technical programming at Fresh-Cut Expo," said Dr. Gombas. "Anyone who is doing business in the fresh-cut produce sector should be concerned and educated about the latest technology, challenges and regulatory action our industry faces."
Taking advantage of Baltimore's proximity to leading experts, IFPA has planned visits to FDA headquarters and USDA's Agricultural Research Center so members can talk about safety regulations and the latest research. Center for Food Safety & Applied Nutrition Director Robert Brackett and former FDA Commissioner Les Crawford will speak to the group on how to effectively work with the regulatory agencies that directly affect fresh-cut produce companies.
Another session will help the industry explore ways to improve finished products by selecting new seed varieties. In the session, "Creating Tomorrow's Fresh-cuts," USDA's Bob Saftner and others plan to update IFPA conference attendees on emerging products in a new commitment to "go back in the food chain," said Mr. Welcome.
IFPA is reaching out to a leading food company, General Mills Corp., to hear about the "The Risks and Rewards of Packaging - A Consumer Products Company Perspective." Jay Gouliard will discuss General Mills' overall strategy and how a large food manufacturer works with retailers on food packaging.
The conference continues to reflect IFPA's growing need to be a global resource for the fresh-cut industry as it hosts sessions that allow European fresh-cut processors to discuss ways to take the lead in processing and product innovations.
At the Baltimore meeting, IFPA's board of directors will meet to tackle two issues influenced by the European marketplace. The board plans a discussion on whether the association should guide processors as they confront a growing trend among retailers and fast-food chains of demanding corporate responsibility polices from suppliers. Another issue is how to ensure consistency on issues, such as food-safety problems, that affect U.S. and European members.
More than 1,000 people have pre-registered for the Baltimore meeting, many of whom will be coming from Europe, said Mr. Welcome. "We've been trying to take advantage of the IFPA Europe group and bring people together to talk," he said.
Finally, two new commodity working groups will meet in Baltimore to discuss cutting-edge research. Melons and mushrooms will meet for the first time, along with the apple working group, to provide a forum for industry and researchers to talk about the latest trends.