Oversupply, shaky economy effect Florida tomato industry - The Packer

Oversupply, shaky economy effect Florida tomato industry

12/06/2011 03:36:00 PM
Doug Ohlemeier

PLANT CITY, Fla. — The state of the U.S. economy continues to challenge demand for Florida tomatoes. Grower-shippers say demand is weak.

“The economy in general is not very good,” said Tony DiMare, vice president of the DiMare Co., Homestead.

Doug OhlemeierTony DiMare, vice president of the DiMare Co., Homestead, Fla., views mature greens running on DiMare’s Ruskin, Fla., packing line in early November. Grower-shippers say a weak economy is undermining movement. “It’s worse today than yesterday and worse than last year. Demand has been kind of flat overall from a grower-shipper standpoint.”

DiMare attributed part of the weak demand to an oversupply in the marketplace.

He said escalating costs also press grower-shippers.

Gerry Odell, chief operating officer of farming and packing for Lipman, Immokalee, said economic worries and smaller consumer purchasing power tests production agriculture.

“I am having a hard time with people thinking about improving consumption as much as they’re thinking about their weekly budgets,” he said.

“Wealthier people are thinking about the quality of their diets while the rest of the world is trying to figure out how it can stretch its dollars to feed their families. Everyone is going through the same pain nationwide and worldwide. We are in very challenging economic times.”

Bob Spencer, vice president and sales manager of Palmetto-based West Coast Tomato Inc., expresses more optimism.

“Demand is decent now,” he said in early November.

“Demand is better than I thought it would have been given the state of the economy. The country is hurting. There are tons of people unemployed or underemployed. Fortunately, demand for our products has remained stable.”

Spencer said the fruit and vegetable industry remains favorably positioned to take advantage of interest in healthy foods.

“People fortunately have to eat,” he said.

“We have a product that’s good and healthy. As long as we don’t have a freeze that drives prices to $40 a box, they will still use tomatoes on sandwiches and salads.”

In early November, during the early part of the season, tomato growers quoted $12.95-13.95 for 25-pound cartons of loose mature-greens 85% U.S. No. One or better for 5x6s, $12.95 for 6x6s and $11.95 for 6x7s. By late November, those prices increased to $14.95 for 5x6s, 6x6s and 6x7s for the same cartons,  according to the U.S. Department of Agriculture.

Grower-shippers such as Batista Madonia Jr., vice president of sales and operations for East Coast Brokers and Packers Inc., Mulberry, said such prices don’t support production investments.

“Unfortunately, those prices are probably average for this time of the year,” he said in early November.

“Even more unfortunate, at those prices, they’re not a profitable situation. What the produce industry doesn’t understand is with the extra food safety steps the tomato industry has voluntarily taken, it adds an incredible amount of costs to our product, yet we have not been able to add that extra cost on to our customers.”

Madonia said East Coast experiences strong demand for its mature-greens, grapes, cherries and roma tomatoes.

“I think we have great demand for our product because we do a very good job with our product,” he said.

“My brother works very hard on the farm level. We try to market the product correctly and try to make sure everything is packed correctly and that we have a good product for our customers. When you do that, you get the repeat customers and repeat orders.”



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