Bin lettuce prices put processors in tough spot

03/21/2002 12:00:00 AM
Todd Foltz

(March 21) SALINAS, Calif. — Bin prices for lettuce — typically 10-15 cents a pound — shot up as high as $1.25 a pound in mid-March as processors sought volume to make up for small sizes and spotty production as the Yuma, Ariz., deal transitions into Huron, Calif., where production is just beginning.

Bin lettuce could be $1.35 a pound by the last week of March, said Robin Sprague, communications director for Fresh Express Inc., Salinas.

“It’s at crisis levels,” Sprague said. “Lettuce should be at its highest prices in history (the last week of March).”

NO END IN SIGHT

And with cold weather continuing in California through the end of winter, growers said they didn’t expect an ease in lettuce pricing or an increase in supply until after the end of the Huron deal and into the first part of the Salinas season, which typically occur in mid-April.

Some processors sought to buy head lettuce by the acre, paying as much as $35,000 an acre in mid-March, some growers said.

But spot market buys continued to be hard to find for processors, as growers fought to harvest enough product to supply their contract customers and keep their regular customers as happy as current market conditions would allow.

The lettuce shortages were caused by a mixture of cold weather in the desert that slowed production and retarded the growth of heads. Processors began feeling the crunch as consumers turned to bagged salads with retail prices for head lettuce soaring to $3 in some places. Adding to the crunch for lettuce, foodservice chains like Wendy’s began promoting salads just before spring began.

The U.S. Department of Agriculture reported March 19 that movement was increasing out of central and western Arizona for iceberg and holding steady for romaine with a wide range in quality, weight and sizing. Cartons of iceberg 24s were moving for $44-46.10, and cartons of filmwrapped 24s were $46-48. For romaine, cartons of 24s were $16.60-18.60.

SALAD SALES

“The processors definitely are in a tight position,” said Edith Garrett, president of the Alexandria, Va.-based International Fresh-cut Produce Association. “They’re trying to fill their obligations to their customers with all the lettuce they can get their hands on, but the amount of lettuce that is available is shrinking.”

Garrett said more bagged salads appear to be selling at retail, in part because their prices aren’t changing while the price of head lettuce is shooting up.

“Consumers are recognizing the value of packaged salads,” Garrett said. “Also, at the foodservice level there are a lot of specials going on. We’re seeing Wendy’s running ads on salads and other fast-food chains advertising sandwiches that use lettuce in the recipes.”
All of this combined to make the start of spring a tough one for processors. Representatives of companies like Tanimura & Antle and Dole could not be reached for comment, but growers told the tale of the expensive market on bin lettuce, commonly used by processors, as well as the carton market.

WISHING FOR MORE

Jim Manassero, vice president of D’Arrigo Bros. Co. of California, said that some bin prices the second week of March had reached $1 to $1.25 a pound.
Growers said they wished they had more lettuce to allow them to take advantage of the high bin prices but that the weather had cost them size, weight and yield.

“Head lettuce from the start through the end of Huron will not be in good supply,” said Maggie Bezart, vice president of marketing and sales for Castroville-based Ocean Mist Farms. “At this time, we only have enough to service our customers.”

Steve Koran, director of sales for Salinas-based Growers Express, agreed.

“We’re committed to our current customer base,” Koran said. “There is no extra stuff to take advantage of this market with. Everybody’s extremely tight.”



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