SALINAS, Calif. — Glutted supply lines? Overplanting?
The buck stops here in the Salinas Valley. Well, maybe.
After a winter of stagnant pricing in the vegetable markets, Salinas grower-shippers seem to agree they have a common enemy — themselves.
“There was too much money made last year in the desert,” said Rick Antle, chief executive officer of Tanimura & Antle. “People were caught short during the shortage last winter. Now too many acres have been planted. Iceberg is a declining category, but growers don’t seem to recognize it.”
“The Salinas Valley will be the first place you’ll see corrections,” Antle said. “The industry as a whole should reduce 10%. Every vegetable crop in the Salinas Valley is overplanted 10%.”
“The veg markets are beyond depressed,” he said. “I might as well predict a bad (deal) and hope it gets better.”
Antle’s competitors would quibble over some of the details, but many agree the area is overplanted.
“I think there’s overproduction, but whether it’s 5%, 10% or more, I don’t know,” said Michael Boggiatto, president of Salinas-based Boggiatto Produce Inc. “Last year we had a big price at the beginning because people just didn’t have enough product. That’s the aberration, not having enough.
“The market goes up and people say, ‘We’re not going to be caught short.’ But that strangles the next market. It’s probably never going to change. Everybody talks about the weather, but nobody does anything about it.”
Sammy Duda, vice president at Duda Farm Fresh Foods, agrees the Salinas Valley is overplanted. But that is truer, he said, when California growers start to face competition from homegrown deals.
“We’ve got at least 10% overplanted when the deals overlap,” Duda said.
Part of the problem, he added, is coming up with accurate numbers on the competition.
“We’ve struggled in Salinas trying to get our arms around how much is grown in the regional deals and in Canada,” Duda said. “When homegrown kicks in, we don’t know how much that represents.
Canada’s leafy green production, for example, starts in mid- to late-June.
“July to September is the sweet spot for homegrown,” Duda said. By that point, Salinas Valley growers are up against buy-local advocates and high freight rates.
“You’re talking about the difference between a $7,000 truck versus $1,000 for homegrown,” he said. “It’s pretty tempting.”