File photoAs grower-shippers head into peak volume months in Nogales, Ariz., most expect supplies of Mexican vegetables and fruits to rebound quickly from mid-January freezes. But politics and market forces are casting a shadow over the biggest crop crossing the border there — tomatoes.
A few commodities, such as watermelons, may see shortages deep into March. The uncertainty over tomatoes will linger past spring, though.
For one, increases in floor prices of 10 to 20 cents per pound would become typical under draft revisions to the U.S. suspension agreement with Mexico.
The agreement, to be finalized by March 4, is widely opposed in Nogales.
About $1 billion worth of tomatoes crosses the border in Nogales annually.
“If you saw even a 10% or 20% decline, that’s a lot of money,” said Lance Jungmeyer, president of Fresh Produce Association of the Americas.
Less than a year ago, Arizona’s fresh produce industry was swimming in tomatoes. Oversupply seems unlikely to return soon — and politics is not the only reason.
Demand in Mexico has shown signs of strengthening, and export licensing requirements there have toughened. Some importers also see a temporary dip in U.S. demand.
“Movement at retail seems slow,” Jim Cathey, general manager and sales manager at Nogales-based Del Campo Supreme, said Feb. 1.
“To keep profits in the produce department, it’s my opinion they’re taking the tomatoes, peppers and things we have in good supply and applying the markup there. It’s a 100% to 200% return on investment to make up for what they’re not making on high-priced leafy items, it would appear.”
He referred to a rise in lettuce costs following shortages in Arizona and California.
Bulk of crops still to come
Chris Ciruli, partner in Nogales-based Ciruli Bros. LLC, said the freezes that hit northern Mexico in the second week of January will just bring volume on later.
“People think we’ve already had a winter crop, but around 75% of our crop is still to come off in February, March and April,” Ciruli said Jan. 28.
“There’s a tremendous amount of vegetable volume. We’re running in peak season on tomatoes, green and red peppers, eggplant and cucumbers now,” he said.
Ciruli Bros. expects to start harvesting its ataulfo mangoes under the Champagne label starting soon after Presidents’ Day, Feb. 18, in Chiapas.
Farmer’s Best International, also of Nogales, expects to start its ataulfos in late February.
Prime Time International director of marketing Mike Aiton said colored peppers suffered minimal weather damage and are peaking now through mid-March as usual.
Prime Time has more than doubled last year’s acreage of mini peppers.
“Vegetable, tomato and row-crop people in Mexico have not experienced anything like the row crops and vegetables in Yuma and Coachella,” Aiton said Jan. 28. “The Mexican market is fairly stable.”
Vancouver-based marketer The Oppenheimer Group also reports normal peak bell pepper volume from Divemex production sites in Etzatlan and Culiacan that escaped the cold.
More of Guadalajara-based Divemex’s production will appear under the Fair Trade label, as certified hectares have increased to 139 from 72 in 2011.
Oppenheimer’s Mexico bells run through May. The marketer also launched an organic heirloom tomato program in October that’s expected to run until June.
As January ended, Crown Jewels Produce was just starting to see good quantities on cucumbers, said Luis Corella, director of Mexican produce.
Squash was tight, he said, as it was for most shippers.
Zucchini f.o.b. prices were mostly $28 for 4/7 bushel cartons on Feb. 13.
Between its acquisition of new growers and warming weather, Crown Jewels expects to boost package count for all vegetable items 25% to 30% this spring from last spring
“Price on cucumbers is probably average, but it’s a nice average compared to the last couple of years,” said Greg Cardamone, general manager of vegetables for L&M Cos. Inc.
Production generally lagged on vegetables, Cardamone said.
“Everybody’s behind,” he said Feb. 4. “Growers will catch up. We’ll have the same yields, just later. Probably late February or early March.”
Mexican watermelons could be the slowest to recoup volume, as that crop was hit not just by cold in the north but rains and mildew to the south.
Volume was down as much as 70% from typical February levels, said Brent Harrison, president of Nogales-based Al Harrison Co.
“The watermelon industry will definitely see a hit in volume for the next couple months,” Harrison said.
He forecast high prices through March with little relief expected from Central American supply.
Honeydews also sustained damage in January’s weather.