Banana disruptions cause shortages in some areas

02/16/2012 04:55:00 PM
Coral Beach

Lingering banana production disruptions from hurricanes in 2011 have been complicated by ongoing cold weather and January flooding in growing regions, causing some suppliers to caution U.S. retailers to stay on top of ordering.

Two Midwest companies — Testa Produce Inc. in Chicago and Indianapolis Fruit Co. — issued urgent updates Feb. 15 about banana supplies.

Testa told customers to expect the shortages to last at least another week and advised them to “stay one to two days ahead” and to “buy turned product and ripen.”

Barbara Daly, Testa’s quality assurance manager, said Feb. 16 the company’s sources had been having supply trouble for about a week.

“People with ripening rooms are having a hard time keeping up,” Daly said. “Our biggest issue is that we can’t give our customers what they need to meet their demands.”

Retailers that have supply contracts appear to be faring better than wholesalers and foodservice suppliers.

Mike Siemienas, media relations spokesman for Supervalu in Eden Prairie, Minn., said all of the banners in the Supervalu family are receiving all of the bananas they need.

“I am hearing that there is a shortage, but it’s primarily with the secondary markets,” Siemienas said Feb. 16.

Officials with Dole Foods Inc. and Chiquita Brands International did not immediately return calls about the supply situation Feb. 16.

Tom Maston, a buyer for Royal Food Service in Atlanta, said Feb. 16 there is definitely a shortage, but his suppliers warned him more than a week earlier that it was coming.

“So far it hasn’t been a problem for us because I’ve sent an e-mail out to our salespeople warning them to not take on a lot of orders from customers we don’t normally deal with. We are being careful about buying and selling,” Maston said.

Royal Food provides about 1,000 to 1,300 boxes of bananas a week to customers, mostly schools.

Daly said Testa ships at least two pallets of bananas a day to the Chicago airports alone. She said demand has been normal for this time of year.

Indianapolis Fruit referenced January floods in Ecuador in its notice. The floods took out about 5,000 acres of bananas there, affecting supplies overall.

“Bananas are extremely tight, especially bananas with color,” according to the e-mailed statement from Indianapolis Fruit. “We are trying to source other fruit but everyone is in the same situation. We expect this tight supply situation to continue for five to six weeks.”

The shortage could last even longer, according to Bill Sheridan, executive vice president of sales with Banacol Marketing Corp., Coral Gables, Fla.

“Supplies are very tight coming out of Costa Rica and Colombia,” Sheridan said Feb. 16. “Right now it looks like it will continue for another eight to 10 weeks, based on the weather.”

Sheridan said lower than normal temperatures in the last quarter of 2011 slowed production. He said there are usually minor supply issues this time of year, but the weather had greater effect than usual this season.

In Chicago at Panama Banana, president Todd Pappas agreed with Sheridan’s assessment overall. But, Pappas expects demand to flatten out a bit as other fruits begin coming into season. Pappas also said that slightly higher prices because of low supplies will eventually register with consumers and add to the expected decline in demand.

As of Feb. 16 at the Miami terminal market, banana availability was “very light” according to the U.S. Department of Agriculture. Prices for 40-pound cartons of Guatemalan greens were $10-11, which was unchanged from a month ago, and $1-2 less than January 2011. No Guatemalan yellow prices were reported.



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Pete Carcione    
South San Francisco, Ca.  |  February, 17, 2012 at 12:24 PM

It won't be long before the word is out that because of weather related storms that the banana price will be higher. Because of light supplies, the price will be higher. I think that it is a shame that because of contracts the suppliers can not get a justified a higher price when the supply is short. Let supply and demand work! The consumer will knoww why the price is up and it is up for a short period of time. I don't like contracts! The consumer knows the reason for the higher price, and the supplier should not have to loose money. Thank you.

Larry    
New York  |  February, 20, 2012 at 09:24 AM

Pete don't be an idiot. Contracts ALWAYS benefit grower....why do you think they offer them? They are good for certain consumers who only want to pay (and can only pay) a set price all year long (lets say for bid business). Growers make PLENTY of money off contracted prices. When things get tight they are not "losing" money and are making even more off of non-contracted business.

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