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Veg shippers look for some silver linings in the clouds

It’s been a tough winter for Western vegetable shippers but several cold fronts going through California as producers shift from the desert to both Central and Coastal California just might make for a strong spring marketing period.

Joe Ange, assistant purchasing director for Markon Cooperative Inc., Salinas, CA, told The Produce News on Tuesday, April 1, “We are seeing a few higher quotes for forward pricing.”

He said there is a sense that production will decline over the next several weeks and the below-cost pricing for Iceberg lettuce and other commodities that has been the norm for months will start to turnaround.

“We don’t see it yet” in the current f.o.b. price, he said, “but the grumblings are out there.”

In its regular newsletter that Tanimura & Antle emails to its customers, a strong market is predicted for iceberg lettuce. “Well, well, well; we actually have some exciting news from the West Coast,” says the lead-in to T&A’s Straight Talk dated March 31 and covering the period to April 19.

The report goes on to say that several cold fronts have resulted in a reduction of supplies at the same time that there is expected to be an increase in consumption as the nation goes through its spring thaw. Speaking specifically of lettuce, T&A said it will have less than planned supplies for the next three weeks, which will hold some customers to their six week averages not allowing typical increase in orders at this time of year. T&A will begin cutting in Salinas on April 18.

Bob Ligon, director of product management for Growers Express LLC in Salinas, CA, said his crews are still in the desert so he does not have a good handle on the supplies that will be coming out of the Salinas Valley once the transition begins. But he was a bit skeptical that the price of lettuce will move very far north. “We are going to have normal supplies and I look at the fields out there and they look pretty good. We get a couple of good warm days and those fields are ready to go.”

Ligon did note that the Romaine market has strengthened with $12 being the typical quote on April 1. “And the leaf items have moved a bit from $5 to $7.”

He expects the broccoli market to fluctuate quite a bit over the next several weeks and said the second cutting of Salinas Valley cauliflower, which is several weeks away, might also create a strong market. “The first cutting was very heavy so it makes sense that whatever the slot is for the second cutting [of each field] will be light and the market should react,” he said.

T&A agreed with Ligon’s Romaine assessment noting that “supplies of Romaine and Romaine hearts will be limited the next few weeks. Markets are better and could go higher.”

Echoing a comment that is the common mantra in the vegetable industry right now, Ange of Markon said “there is no place for it [the market] to go but up. It certainly isn’t going to go down.”

He said it is reasonable to predict a bump in price because shippers have been looking at single digit sales for so long, virtually any shift in supply and demand is going to be in the upward direction. He added that the Huron deal in the San Joaquin Valley, which typically fills a one-month gap between the desert and California coastal production, appears to be well below normal this year. Less acreage has been planted and Ange said a couple of shippers that usually have a good amount of volume from Huron in the late March to mid-April period “have already been in and out of Huron. It definitely is less than last year.”