High winter and spring prices stress produce sales - The Packer

High winter and spring prices stress produce sales

09/16/2010 06:41:18 PM
Doug Ohlemeier

PHILADELPHIA — Like other distributors, higher than normal costs of product are dogging Philadelphia wholesalers.

Doug Ohlemeier

Chip Wiechec, president of Hunter Bros. Inc., holds some locally grown sweet corn.

Chip Wiechec, president of Hunter Bros. Inc., said he has been discouraged by the prices for product he has been quoted.

“Some of our transportation costs and even the cost of doing an inspection have gone up exponentially,” Wiechec said.

Wiechec pointed to California lettuce selling for $5-6 a box while freight costs $8.

For a long time this year, California-grown celery cost $4-5 f.o.b. with freight at $10.

“By the time it gets to the East Coast, you have $10-15 invested in a $4 box,” Wiechec said. “The growers aren’t making any money. If we’re going to make 15% on it, we have to get $20 for a $4 box of celery and a $5 box of lettuce. In a competitive environment, it’s not a true representation of what is happening in the produce industry.”

John Vena Jr., president of John Vena Inc., said the high prices many vegetables sold for during 2010 affected sales by affecting package counts.

Vena said he doesn’t think produce sales will suffer from the economic morass.

He said there are things people reduce their buying but fresh produce — if it’s reasonably priced — isn’t one of the items they cut.

“People have to eat and have to live, and they have to do business,” Vena said. “In our industry, at least, we see that need for product.”

Vena sells specialty items, such as heirloom produce and greenhouse-grown vegetables, to retailers, foodservice purveyors and major wholesalers that visit his market store.

While Vena does more retail transactions, Vena said its foodservice business accounts for a little more in sales.

A combination of unfavorable growing weather, delayed deals and high truck rates kept prices unusually high this year, said Rick Milavsky, vice president of BRS Produce Co.

He said prices skyrocketed during the winter and spring and remained high for weeks.

“Everyone complains but these people (customers) want to do business,” Milavsky said. “They may have bought only what they needed. When prices get too high, they won’t buy extra and speculate. They will work a little closer. Product is expensive. They won’t spend $40-50 for items if they don’t have to.”

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