In mid-April, the f.o.b. price on limes was marching to new heights, but Ronnie Cohen, vice president of sales at Vision Import Group LLC, in River Edge, NJ, told The Produce News that he expected the price to start to decline in May and drop to about $30 per carton in June, which would still be an above average market price.
But that would represent a big drop from the near $100 market that has persisted since mid-March. During the third week of March the lime market was at $80 per 40-pound carton, which was about 50 percent higher than Cohen had ever seen it before, and four times higher than what might normally be considered a solid market price.
Later that same week, another lime salesman said he sold a few pallets at $90 per carton. By mid-April, Cohen said the larger limes (size 175 and larger) were returning as much as $110 per carton, though it was difficult to find any of those.
“I don’t think I have ever seen it go over $55 before,” said Cohen. “It got to $50 and it just kept rising, going up $5 at a time.”
The Vision Import executive said a weather-related bloom drop in December in the Mexican region that produces most of the Persian limes, which is the export lime variety, was responsible for the current lack of supplies.
At that same time, the Key lime trees, which satisfy much of the domestic demand, also experienced weather issues resulting in a bloom drop of their own that was worse than the impact on the Persian limes. So the current demand on the Persian limes is coming from both the domestic and export market. It has created a perfect storm of demand far exceeding supply.
Because of the unprecedented market price, growers are “chasing that market” according to Cohen and picking anything that will sell. That means the fruit is not being allowed to size to its more normal 175 to 200 count. Much of the fruit on the market in mid-April was of the 235 count or smaller. This means that the fruit that would be maturing down the road a bit is already being picked. Cohen said the smaller fruit was not commanding as high of a price so he was hoping growers would stop stripping their trees and allow the fruit to size. He said that in itself could bring supplies more in line with demand.
He added that there are new areas coming into production soon and said some other off-shore suppliers from Central America are trying to beef up their shipments, but added that Mexico is responsible for about 95 percent of the U.S. consumption. Consequently, the other supplies are going to have only a minimal impact on the price.
During what he called this “crazy time,” Cohen said Vision is just trying to service all of its longtime customers and get each of them as close to their order as they can. He does expect that the retail price on limes will start to reduce demand. However, limes are a relatively inexpensive item at retail, often selling at three for $1, or even less in bags. It remains to be seen how a price of even double that would impact consumer sales.
Though Cohen enjoys his position of trying to get the grower the best return he can for their product, he said a lime market in excess of $100 per carton is not really a good thing. “I just wonder how many people have stopped buying limes because of it,” he said. “Are they going to find an alternative and not come back when the market comes back down?”
He said the hot lime market has resulted in some lime users switching to lemons. “I was in our Los Angeles office the other day and someone made a run to the taco truck. Typically you get a couple of tacos with a fresh lime wedge. This time we got a lemon wedge. That’s just not the same thing. Lemons have a different taste profile.”
At the same time that limes prices were moving through the roof, the mango market was fairly steady. In mid-April, Cohen said supplies from the Oaxaca area of Mexico were running a bit behind schedule. However, he said in May, packers in Michoacan and Jalisco will join the deal and there should be some great promotional opportunities, especially on the smaller sized fruit. He said there should be some great opportunity for bag promotions selling mangos in multiples.
Cohen added that once volume shipments begin they should continue unabated as the Mexican harvest of mangos moves north through the various growing districts from the spring through the summer.