Broccoli prices double from May with tight supply

06/22/2012 02:57:00 PM
Andy Nelson

(UPDATED COVERAGE, June 27) A combination of lower supplies and higher demand pushed broccoli prices to levels unusual for June.

“It’s been a long time since I remember seeing a market this firm for this time of year,” Mark McBride, sales manager of Salinas, Calif.-based Coastline Produce, said June 22.

On June 26, the U.S. Department of Agriculture reported prices of $11-12.65 for cartons of bunched 14s from Salinas, up from $7-7.50 a month before.

Prices were even higher the week of June 18, reaching $12.55-15 on June 21.

The strong market can be traced largely to reduced supplies from the Salinas and Santa Maria growing regions of California, the product of rainy weather in early spring, McBride said.

“It either prevented growers from getting in, or in some cases did damage to stands or to actual plants,” he said.

Demand also has played a role in the surging markets, said Jacob Abramson, broccoli, lettuce and leaf product manager for Salinas-based Markon Cooperative, who started seeing markets climb in mid- to late May.

“All it takes is just a little more demand, and prices rise,” he said.

McBride agreed that demand was playing a role in stronger markets.

“There’s been a lot of promotional activity. Broccoli is something that chains like to feature.”

The stronger markets could also be a product of lower acreage, as some growers have scaled back their broccoli programs in recent years.

“Markets have been so volatile, so poor for any number of years, we thinned our program back,” said Michael Boggiatto, president of Salinas-based Boggiatto Produce Inc.

“Maybe there were some other growers who finally said, ‘Enough is enough.’”

F.o.b.s will likely start to drop in late June or early July as California runs through its rain-affected crop and more locally grown broccoli deals begin entering the market, McBride and Abramson said.

The week of June 25, for instance, Canadian production will begin to play a larger role in domestic markets north of the border that had been supplied by California, Abramson said.

“Next week we’ll lose some Canadian demand.”

While California volumes are expected to return gradually to more normal levels in late June and early July, growers will reign in supplies to account for locally-grown deals, McBride said.



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