COMPLIMENTARY
PRINT SUB

CLICK HERE

The-Produce-News-Logo-130

CURRENT ISSUE

view current print edition

 

 

The fresh tomato market had prices well into the mid-$20s and beyond in early December, and experts expect the demand-exceeds-supply situation to last through the end-of-the-year holiday season.Tomatoes-at-Retail-Cal-supermarket

“It’s no mystery, said Joe Bernardi of Bernardi & Associates, a broker specializing in tomatoes from virtually every point of origin. “Florida typically provides 80 percent of the nation’s tomatoes in December. This year they had a little wind and rain, which has changed that.”

He, of course, was referring to the series of storms and hurricanes that ravaged Florida in October and greatly affected its agricultural production areas, wiping out some planted fields and delaying farming activity for several weeks.

Reggie Brown, manager of the Florida Tomato Committee, said the storms were especially harsh on southwest Florida, where the bulk of the tomatoes are grown. Besides wiping out planted acreage, the longtime Florida tomato industry advocate said it took three to four weeks to dry out the fields, which greatly disrupted the production cycle. He indicated that Florida’s tomato industry is like a well-oiled machine with lots of moving parts. On a schedule worked out well in advance, fields are prepared for planting while seedlings mature in nursery greenhouses. When the time is right, those fields are planted at timed intervals to produce tons of tomatoes from the fall through the spring.

“Now we’re off schedule and I expect we won’t get back to normal until early to mid-January,” Brown said, noting that Mother Nature still gets to play a role. “We have a cold front coming in tonight (Dec. 5). That will stop the plants from growing. Give us some warm weather and we can get back on track.”

He noted that Florida is currently shipping about 40 to 50 loads of tomatoes per day, which he estimated to be less than half of normal.

Bernardi said Northern California shipped its last fresh market tomato in mid-November with Southern California following suit by the end of the month. As he spoke in early December, tomato production in Baja California was humming along but the West Mexico production areas were still about two weeks away from sending tomatoes to the United States. “We are expecting to see some cross (from Mexico into the United States) during the week of Dec. 18.”

He added that it appears that Mexico has a good crop and timing is fairly normal. “That means we should see volume by the middle of January.”

Bernardi said the market on Florida tomatoes on that day was in the high $20s for most sizes. “I haven’t seen prices this high (at this time of year) since the 1989-90 Florida freeze.”

He said shortly after the Christmas holiday, Florida shipments should be greater causing the market to return to a more normal level.

Brown said the high f.o.b. prices are allowing most Florida tomato growers to at least recoup their crop expenses, which were greatly increased by the storms. But he reminded that the reason the prices are high is that most growers have a half a crop at best “so nobody is getting rich.”

As of Friday morning, Dec. 8, more than 150,000 acres in four counties in Southern California had burned with the major fires still not contained and high winds still advancing those fires.

The largest and most damaging fire has been burning in Ventura County since Monday night, Dec. 4. Reportedly, it started on Ojai Road near an avocado grove. The fire, fanned by winds topping 50 miles per hour, swept in all directions in the canyons and hillsides that populate eastern Ventura County. The cities in those areas impacted included Santa Paula, Fillmore, Piru and Ojai. As the week progressed, the fire marched through some Ventura neighborhoods in the hills above the city and headed west toward the Pacific Coast. This morning (Friday) it was moving north from the city of Ventura with Carpentaria in its sights and Santa Barbara county and city only about 10 miles to the north. Though that might seem like a safe distance, the fire has already traveled more than 30 miles in some directions. 

Firefighters from all over the west were battling the blaze as well as smaller ones in Los Angeles, Riverside and San Diego counties. Winds had died down a bit but there were still reports of gusts in the 30-50 miles per hour range, which continue to make the fires difficult to contain. Fire officials said the Ventura County fire was only 5 percent contained.

While it is way too early to calculate the damage, the Ventura fire is known to have consumed more than 500 structures and has surely caused damage to some lemon and avocado groves. Thus far, it has not hit the Oxnard plains and the city of Oxnard, home to much vegetable production and many packing sheds and coolers.

Rob Wedin of Calavo Growers Inc., which shares a parcel of land with the Limoneira Co. in Santa Paula, CA, said the facility lost power earlier in the week but back-up generators kept the coolers operating. “We have a readiness plan and it worked perfectly,” he said.

Wedin said some of the firm’s avocado growers lost some groves and homes in those groves. “It’s way too early to assess the damage but there are citrus and avocado groves in those canyons. I am sure there are losses.”

He added that the high winds that have plagued much of Southern California will also take a toll. Many trees are only a few weeks away from harvest with large fruit. High winds are no friend.

Kim Sherman, director of membership for Western Growers Association, called many of the association’s Ventura County members this week, and reported that there was some loss of groves, orchards and homes but no major injuries or deaths as of Thursday night, Dec. 7. She noted that one member operating a nursery in the area reported that much of their nursery stock for 2018 was lost but no permanent structures had been damaged. However, she said these members are still in danger as the fires continue to burn. “We just want to let them know we are here and available if they need anything,” she said.

Ken Melban, vice president of industry affairs for the California Avocado Commission, told The Produce News on Friday morning that there were clearly hundreds of avocado acres impacted by the fires and winds but it was far too early to put a volume number on the damage. “Our condolences go out to all the growers suffering damage to homes and groves,” he said. “It’s been a devastating fire.”

Melban and CAC Chairman Rick Shade are planning a Ventura County grove tour next week to express sympathy to growers and get a better handle on the situation.

Whether in store or online, shoppers like to have options when it comes to where they purchase their everyday groceries and supplies. Shopping and hopping from store to store go hand-in-hand for today's consumers as new research and insights from Acosta — a leading full-service sales and marketing agency in the consumer-packaged goods industry — shows that 76 percent of weekly shoppers visit more than one retailer each week for groceries. Additionally, according to the company's latest Hot Topic Report, Trip Drivers: Top Influencers Driving Shopper Traffic, 67 percent of those shoppers are visiting approximately two to three retailers weekly.Acosta Influencers Driving Retail Traffic Infographic

"Shoppers appreciate having options, which is why we are seeing a rise in hopping from store to store for weekly grocery trips," said Colin Stewart, senior vice president at Acosta. "People are motivated by not only good deals and fresh products, but also by brand loyalty, which can impact their decisions to either keep returning to a particular store, or hopping to another."

Trip Drivers: Top Influencers Driving Shopper Traffic provides an overview of this growing grocery trend, including key motivators such as price, quality, availability and convenience.

Fresh foods driving store trips
Fresh foods continue to be a key driver for why many shoppers hop in the car and drive to the store regularly – so they can purchase ingredients for that night's dinner in-store.

Thirty-seven percent of shoppers make multiple trips weekly to ensure their food is fresh.

From old to young, each generational group surveyed agreed they make multiple trips or have multiple deliveries to receive the freshest food, including 65 percent of millennials, 47 percent of GenXers, 25 percent of boomers and 22 percent of silents.

Fruit and deli-prepared foods drive 31 percent and 29 percent of dollar growth, respectively.

Thirty-seven percent of shoppers report they don't have time to figure out what to have for dinner, saying it's typically a last-minute decision.

Price takes center stage
Price is an important factor as to why shoppers are traveling to different retailers within a given day or week to buy a product that is sold at multiple locations.

Sixty percent of shoppers reported shopping at more than one retailer because "some products are priced lower at certain retailers."

Only 45 percent of millennials cite price as a key driver of retail hopping – this generation is more prone than the average shopper to vary their shopping based on where they are and specific brands.

More shoppers are choosing at which store to shop based on how much they like the store brand (53 percent of shoppers versus only 34 percent in 2011)

Brand loyalty helps consumers connect
Brands can help establish a loyal shopper following by delivering innovative products that align with consumer demand, and by consistently delivering quality, valued products to develop a level of trust.  

Forty-one percent of shoppers reported shopping at more than one retailer because "some retailers carry better quality products in certain categories."

Thirty-three percent of shoppers go to more than one retailer due to not finding all the products/brands they want at one store.

Brand preference drives traffic across all income brackets, including among 37 percent of shoppers with household incomes above $199,000, and 28 percent of shoppers with household incomes below $20,000.

Forty-three percent of shoppers surveyed agree that brands simplify the selection process when shopping at multiple grocery stores.

"Personalization is a key strategy in connecting with shoppers and creating not only brand loyalty, but also store loyalty," Stewart continued. "No retailer can be everything to everyone, but by knowing what motivates your shoppers, whether it be price, fresh foods or brands, make a commitment to the satisfaction of your shoppers to keep your location in their shopping mix."

Uncertainty is the enemy of robust U.S. foreign trade, unfortunelty that is the current situation.

At least that is the view of Darci Vetter, the former chief agricultural negotiator for the U.S. Trade Representative. Vetter worried that as the United States looks inward, the rest of the world continues to negotiate trade deals filling any gaps there might be.Official Portrait of Darci Vetter large

Vetter held her position from 2014 until President Donald Trump took office in January of this year. She was intimately involved in the agricultural package negotiated as part of the Trans Pacific Partnership, so her disappointment with Trump’s scuttling of the agreement is understandable. She said Japan is currently negotiating deals with both the European Union and Australia and that all the other signees to the TPP are discussing going forward without the United States.

“The United States is losing sales to other players,” she said, noting that the impact is greatest on ag products such as produce, meat, wine and dairy.

Vetter painted an even dimmer picture of the future if the United States continues on its current path. She said many developing countries around the world are seeing significant growth in the middle class of their respective nations. It is the middles class, she said, that fuels the growth in agricultural trade.

“As people move into the middle class, the first thing to change is their diet,” she said, indicating that people tend to increase consumption of fruits and vegetables and other higher-end products that make up the bulk of U.S. ag exports.

The former negotiator spoke during a workshop at the recent Produce Marketing Association Fresh Summit convention in New Orleans. She began her presentation by giving a full-throated defense of the U.S. foreign trade policy. While the current presidential administration has castigated the U.S. efforts, she applauds them, especially with regard to agriculture. She said 20 percent of U.S. farm income depends on foreign exports, adding that for every $1 billion in foreign ag sales, 7,000 U.S. jobs are created.

Vetter specifically pointed to the renegotiating of the North American Free Trade Agreement as another anti-trade item on the current administration’s agenda. She said focusing on the trade deficit between two countries when analyzing the utility of a trade agreement is not the right approach. She said the goal of a free trade agreement isn’t to balance the scales but give consumers access to more products at a cheaper cost.

She again noted that the reluctance of the current administration to embrace foreign trade could have a long-term negative impact on the U.S. economy, especially agriculture. She relayed that because of the NAFTA renegotiations, Mexican buyers of U.S. field crops are currently hedging their bets by looking to Brazil and Argentina as potential suppliers. As those relationships grow, it can only hurt U.S. producers.

She ended her presentation by urging those in the audience to get involved and become “ambassadors for trade.” She said constant anti-trade talk is creating a false narrative.

“Somehow there is a perception that the U.S. is losing,” Vetter said. “That’s just not true, especially for agriculture.”

Vetter urged the ag community to be advocates for trade and tell the larger community the jobs and economic growth that are the result of foreign trade.

“Tell your [foreign] customers that you see them as long-term trading partners and that you value them,” she said. Tell Washington, DC, that you value trade. Tell your story to your neighbors and community. Make the case for trade and U.S. leadership.”

A panel of agricultural industry experts followed Vetter’s presentation and agreed with her sentiment. Jose Antonio Gomez Bazan, president and chief executive officer of Camposol Trading, a Peruvian export company, said at the end of the day, the U.S. anti-trade efforts will hurt U.S. companies and U.S. consumers more than anyone else. He noted that the U.S. rhetoric on the subject is causing companies to look elsewhere and find new partners as a way to minimize their risk.

The U.S. Department of Agriculture has cited Lucas Trading Co. LLC, operating out of St. Charles, MO, for failure to pay for produce. The USDA also imposed sanctions on two produce businesses -- Unified Ltd. and AOM International Food LLC -- for failure to pay reparation awards issued under the Perishable Agricultural Commodities Act.

Lucas Trading failed to pay $656,325 to 18 sellers for 76 lots of produce that were purchased, received and accepted in interstate commerce from May 2015 through September 2016. As a result of these PACA violations, Lucas Trading Co. LLC cannot operate in the produce industry until Nov. 24, 2019, at which time it may reapply for a PACA license.

The company’s principal, Charles B. Lucas, may not be employed by or affiliated with any PACA licensee until Nov. 24, 2018, and then only with the posting of a USDA-approved surety bond.

The following businesses and individuals are currently restricted from operating in the produce industry:

Los Angeles-based Unified Ltd., doing business as Pan American Banana, is currently restricted from operating in the produce industry for failing to pay an $18,130 award in favor of a California seller. As of the issuance date of the reparation order, Robin L. Del Toro and Jose M. Del Toro, Jr. were listed as the officers, directors and/or major stockholders of the business.

AOM International Food LLC, operating out of Columbus, OH, is currently restricted from operating in the produce industry for failing to pay a $17,853 award in favor of a California seller. As of the issuance date of the reparation order, Tammy Trinh was listed as a member of the business.

In the past three years, USDA resolved approximately 3,400 PACA claims involving more than $58 million. Its experts also assisted more than 8,500 callers with issues valued at approximately $151 million.