The recession has hit all sectors of the produce industry hard. And when it comes to “premium” products like greenhouse vegetables, that hit can be even harder.
Greenhouse volume shipments have been equal to, or in some cases possibly even greater than last year, said Chris Ciruli, a partner in Nogales, Ariz.-based Ciruli Bros. LLC.
For that, Ciruli said he’s grateful.
The flip side of the coin, however, has been that prices have been in a slump. And a hoped-for recovery hasn’t happened as quickly as expected.
“We had hoped that winter would bring changes, but so far there haven’t been,” he said.
The winter holiday market has been “red-hot” for greenhouse-grown colored bells, driven largely by a shortage of field-grown bells, said Jeff Taylor, salesman for Coachella, Calif.-based Prime Time International.
But demand is always strong at the holidays, he said.
Overall, demand for greenhouse-grown bells has been slower than in a typical year.
“We’re just trying to get through this slow time,” Taylor said. “Just trying to stay on our toes.”
The Oppenheimer Group, Vancouver, British Columbia, expects up to 15% growth in its greenhouse vegetable category this year, up from 5% to 10% in a typical year, said Aaron Quon, the company’s greenhouse vegetable category manager.
But that’s largely due to a big increase in the size of the company’s California greenhouse deal at the beginning of the year, Quon said.
Golden State acreage jumped from 85 to 125 acres as a result of that expansion, he said.
In general, though, the greenhouse vegetable category continues to feel the effects of the recession, Quon said.
“There will be a bit of a stall over the next year until the economy picks up,” he said. “You won’t see a lot of expansion.”
The economic downturn has affected some aspects of the business more than others, Quon said.
“What we’ve seen is that demand is still pretty good, but there’s been some erosion on prices,” he said. “And I think it (pricing) will stay fairly flat for the next nine to 12 months.”
Westmoreland Sales, Leamington, Ontario, expects volumes to be similar to 2009, with a similar mix of its four staples: tomatoes, tomato clusters, colored bell peppers and seedless cucumbers, said Dino Dilaudo, the company’s sales manager.
Westmoreland has customers in the western U.S. and in western Canada.
Business has been steady on tomatoes and cucumbers, Dilaudo said.
“It’s had its ups and downs throughout the year, but it’s really been a pretty representative year,” he said.
Peppers, however, have been another story.
“We’ve had significantly lower returns on peppers this year than historically,” he said.
The economy can take part of the blame for that, Dilaudo said — when times are tough, higher-priced items like colored, greenhouse-grown bells are hit harder than other commodities.
But the main reason, Dilaudo said, has been an influx of product from Holland.
Growers there are growing more product but facing steep decreases in demand from eastern Europe and other markets.
Russia, in particular, Dilaudo said, is pulling much less product from Holland because of its economic difficulties, he said.
Also, Turkey has been ramping up its production, providing competition to product from the Netherlands.
As a result of all those factors, Dutch growers are sending more of their product across the ocean, Dilaudo said.