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No end in sight to strong vegetable market

A strong vegetable market remains the order of the day as lighter-than-usual supplies from local and homegrown deals have created a demand-exceeds-supply situation for lettuce, tomatoes and other vegetables.

And experts say there is no expected increase in volume on the horizon that will alleviate the situation.

"How long will it last? I just can't tell you," said Joe Kaslin, vice president of sales and marketing for Salinas, CA-based Bengard Ranch Inc., who added there is no new production expected from Salinas. "Typically more acres are planted for September and October harvest, but yields are less then so it's a wash. For this to change, there will have to be an increase from the homegrown deals."

Scott Wise, director of sales for Mann Packing Inc. in Salinas, CA, didn't project as far out but told The Produce News Aug. 7, "We are anticipating a strong market for at least the next couple of weeks."

Douglas Schaefer, president of EJ's Produce Sales Inc. in Phoenix, sang the same song. "The lettuce deal has been in the $20 range for the past two to three weeks, and I don't see anything coming in the future that's going to change that."

He said there was a little downward pressure on leaf items and cauliflower in the first week of August but that pressure bottomed out and prices were rising again.

"The homegrown deals just haven't produced this year, especially in Canada," said Schaefer. "We are seeing orders we've never seen before. There are buyers in the East looking for squash and cucumbers from California. That never happens this time of year. And they are spending big money. They are used to paying $5 or $6 (for a carton) and now they are paying $12 to $14."

When even squash -- a prolific producer for almost any small grower -- isn't in big supply in the summer, you know there are issues.

"It's a great deal for the [California] growers," Schaefer said. "And you know those squash guys are usually pretty small, so it's great for them [to be cashing in]."

The tomato crop is another that typically sees a big market drop in the summer months, as everyone, even backyard farmers, plants a tomato bush or two.

"The market was a strong $8-$10 last week," said Schaefer, "and it's up to $12 today."

He added that it could get much stronger before it goes the other way.

"We have this strong market and the [bagged salad] processors aren't even buying up fields," he said. "If they start doing that, watch out."

Kaslin indicated that the summer vegetable supply situation from California's Salinas Valley may be systemic. He said that strawberry acreage has increased tremendously in the area, moving it to the top spot (in terms of value) of Salinas crops.

"As strawberries take over land closer to the ocean, some growers are moving their lettuce acreage to mid and south county," said Kaslin.

He said that while Bengard is getting as good yields as it has ever had from its prime land in the northern part of the Salinas Valley, the lower yields in the southern end of the valley are bringing the average down industry wide. Combine that with less acreage, and the result is an issue of demand-exceeds-supply that might be the new normal.

Of course, a bumper year for the local deals could adjust that equation pretty quickly.

In the meantime, the weather across the country is not conducive to an influx of supplies from local deals. Much of Canada as well as the Midwest and the Southeast have had much more precipitation than is normal, and more rain is forecast from eastern parts of the Central Plains and the middle Mississippi Valley to the interior South and southern mid-Atlantic through much of August.