Central American melon deal loses steam - The Packer

Central American melon deal loses steam

11/19/2010 09:20:36 AM
Andy Nelson

Several times over the past few years, I’ve heard some version of the same response.

Andy Nelson
Markets Editor

We’re no longer in the deal. We’ve pulled out. Who knows about the future, but for now, we’re not bringing any in.

The subject is Central American melons. And I’m hard-pressed to come up with another crop from another region that has had so many importers drop it like a hot potato.

I can think of at least five major importers that brought in cantaloupes and honeydews from Honduras, Guatemala and other parts of the region in recent years that have gotten out of the Central American deal.

The reason? One importer told me it had more to do with time than money. Namely, the amount of time it takes product to make it to Miami or Long Beach or New York by boat.

Can you blame him, with food safety under more of a microscope than ever, and melons among the more vulnerable commodities — to the point where the watermelon industry has made it known they no longer wished to be categorized as “melons”?

That importer and others have had the same answer to my follow-up question: Where will you get melons from, then?

“Mexico,” many respond, which has a familiar ring to it. Proximity to the U.S., cheaper labor and other factors have also made Mexico an attractive alternative source for berry importers.

Food safety

History must be cyclical. A little over a decade ago, 317 million pounds of Mexican cantaloupes came through Nogales, Ariz., alone.

But salmonella outbreaks sent those numbers plummeting to 7 million pounds in just a few years, when the Food and Drug Administration enacted an import alert on the melons and approved exporters on a case-by-case basis after field and facility audits.

Importers then looked to Central America. Maybe Mexico is entering another melon renaissance.

Supply and demand, however, also has played a role in U.S. importers’ decisions to pull the plug, at least for the time being, on their Central American melon deals.

Many Central American growers made the decision an easy one, pulling acreage because of sluggish markets in recent years. As a result, imports are expected to be down 15% to 20% from last year, and as much as 25% from two years ago.

Through September, 477,000 metric tons had been shipped year to date from Central America to the U.S., down from 492,000 tons last year at the same time, according to the U.S. Department of Agriculture’s Foreign Agricultural Service.

Looking up?

But, in the spirit of entrepreneurial capitalism in general and the produce industry in particular, some Central American melon importers see opportunity this season.

One said he plans to boost his company’s program by 5% this year. And he and others are bullish on new, sweeter honeydew varieties — specific to their regions — they say taste better and ship better.

It may be down, but don’t count the Central American melon deal out just yet.

E-mail anelson@thepacker.com

What's your take on the Central American melon deal? Leave a comment and tell us your opinion.



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