Shippers expect strong watermelon market

04/06/2012 12:52:00 PM
Pamela Riemenschneider

Watermelon prices are nearly double what they were last season, and an early-season hailstorm could keep the market elevated through the Texas deal.

Watermelons from Mexico were selling for 28-30 cents a pound April 2, compared with 16-21 cents a year ago, according to the U.S. Department of Agriculture.

Acreage in the valley is down a little bit this season, said Chad Szutz, general manager of Weslaco, Texas-based A-W Produce Inc.

The ultra-high prices in early April likely won’t last, he said.

“We’ll be a little bit later as we had some inclement weather during spring planting,” he said. “The market’s very strong right now, around 40 (cents) a pound,” he said. “I would expect the Texas Memorial Day push to be low- to mid-20s.”

Szutz said A-W plans to start harvesting around May 7.

Drop in pricing expected

A March 29 hail storm damaged 20% to 30% of the Rio Grande Valley’s 10,000 acres, which could keep the market elevated through the start of the Texas deal, but strong supplies from Mexico will keep things from getting out of hand, said Matthew Bradley, sales manager for J&D Produce Inc., Edinburg, Texas.

“I think we will only drop to 30-34 (cents a pound),” he said April 3. “I think we should start at 26 (cents) from Texas. There should be volume from northern Mexico and Florida in the next few weeks.”

Jeff Fawcett, salesman at Bagley Produce Inc., Edinburg, said he also plans to start around May 7 and get going with volumes around May 15.

“I have a feeling the market won’t stay high,” he said. “We’re hoping it’s a little better because last year the Memorial Day market was a disaster. We have lots of hope that this Memorial Day market is better or we’re going to lose a lot of watermelon production.”

Ward Thomas, president of McAllen, Texas-based Majestic Produce, said his company expects to get an early start on its Texas watermelon deal this season.

“We’ll be up and running somewhere between April 12th and 15th,” he said April 2. “The crop’s looking very nice – beautiful at the moment.”

Fawcett said Bagley Produce maintained the same acreage this season but increased its plantings per acre.

“We hope to have more melons available this season,” he said.

While many Texas grower-shippers have gotten more involved in the import deal, Fawcett said the south Texas season is vital.

“We lose our import deal basically in the next few weeks,” Fawcett said March 29. “Memorial Day is the domestic crop.”

It’s not easy to stay in the ground in Texas, however. Competition for land is tough with urbanization and the regulations imposed upon the industry.

“It takes three people to farm 1,000 acres of corn and you get the same return as you’d get for 100 people and 1,000 acres of watermelons,” he said. “And they don’t have to worry about ICE (Immigration and Customs Enforcement) or food safety or labor.”

Food safety a priority

With the Food Safety Modernization Act becoming a reality, many grower-shippers are establishing a new mindset revolving around food safety.

At Progreso Produce Ltd., Boerne, Texas, that means getting Global Food Safety Initiative-certified in all facilities.

“It’s a continuing process, a new structure set up for food safety for us,” said Curtis DeBerry, president and owner. “That will be a continuing upgrade every month. I think the industry has no choice but to go that way. You can’t just dress up and have a one-day inspection.”

Fawcett said food safety is more than just audits nowadays.

“It’s easier to get the mindset and get in a rhythm instead of get all hunkered down to get ready for a test,” he said. “You can’t slack off in the off-season.”



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