California lettuce gains popularity as weather beats local deals - The Packer

California lettuce gains popularity as weather beats local deals

07/17/2012 05:24:00 PM
Mike Hornick

SALINAS, Calif. — Increasingly, East Coast buyers are turning to California for their summer lettuce needs as homegrown deals take a beating from the weather.

Storms in Quebec plus high heat in the Ohio Valley and across the U.S. have taken a toll on local leafy greens, especially romaine. That spiked prices in the second week of July.

“Market activity has been slowly building to where we’re quoting $20 a box on romaine hearts today (July 9),” said Mark Adamek, general manager for romaine and mixed leaf production at Salinas-based Tanimura & Antle. “There’s just a lot more interest in California leafy green items.”

Most buyers who didn’t book early at a lower price paid $16.95-20.14 for a dozen three-count packages of Salinas-grown romaine hearts July 17, according to the U.S. Department of Agriculture. Two weeks earlier, it was $9.45-11. On 24-count romaine cartons, prices rose from the $6.95-8.55 range to $13.56-14.95.

For iceberg, film-lined 24-count cartons ran $9.35-11.48 on July 17, up from $6.50-7.85. Green leaf lettuce is mostly $10.95-12.50 on 24-count cartons, up from $8-9.50. Santa Maria also is producing, in lower volumes.

The rising demand for lettuce comes at a time when California stone fruit, grapes and other commodities are all in production and competing for trucks. That’s likely to keep freight rates up.

However, the volumes those trucks can haul, even in the best scenario, may be modest until fall.

“During summertime we cut our leafy plantings in half because East Coast customers are buying homegrown,” said Henry Dill, sales manager at Pacific International Marketing. “Our acreage goes down to help compensate for that.” California’s summer competition includes deals in Canada, New Jersey, New York, Ohio and Michigan.

A second issue is weather in the Salinas Valley itself. Temperatures here, unlike much of the U.S., have hovered comfortably under 70 degrees, although wind has been a problem.

“I talked with my peers in other companies, and we’re all struggling with a fringe burn, so the product has gotten short,” Adamek said. “There’s very little calm air and the strain of high winds is visible. It’s affecting romaine and romaine hearts especially, but I see the damage in a smaller way on all the leaf items.”

For California growers, the bump in lettuce prices — following another for broccoli — is obviously welcome. But enthusiasm is tempered by the stagnant vegetable markets that held sway before.

“Pricing has been difficult over the last six months or so,” said Don Klusendorf, director of sales and marketing at Santa Maria-based Bonipak Produce Co. “There has been an oversupply, which should not be a surprise. A lot of people grew things on speculation, and there will be a natural adjustment in the marketplace in the next six to 12 months.”

“We’re just getting off a depressed market,” Doug Classen, sales manager at Salinas-based The Nunes Co., said. “Signs are things will tighten up in the next few weeks and get some decent markets brewing. We’ve had different areas on homegrown reach out to us looking for product.”

“We’ve been so much below break-even for the last six months, it looks like we’re making a million dollars now,” Dill said. “We’re just seeing a little relief. At this point I’ve got to believe we have a shot, maybe in the fall.”

Iceberg lettuce demand rose more gradually than romaine. “We’re running into a wide range of prices,” Mark McBride, sales manager at Salinas-based Coastline Produce, said. “It hasn’t been anything to get too excited about, but at least movement has been very good.”

“We’re right on top of our fields, and that’s a victory in itself,” McBride said. “We’re harvesting them a bit on the young side. There are reports of bigger, overripe lettuce out there, and luckily we have not been in that category.”

Longer term, other lettuces continue to outpace iceberg for sales growth.

“We’ve seen strong growth over the past year in romaine and green leaf,” said Mike Downey, director of purchasing at Salinas-based Markon Cooperative. Romaine and green leaf were up 10% to 15% annually, iceberg 2% or less, Downey said.



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