Economy, higher retail prices put a damper on demand

09/01/2009 02:11:28 PM
Doug Ohlemeier

Thanks to lack of tropical storms rolling through northern Florida and southern Georgia, the opening of this year’s Georgia fall vegetable season appears to be more normal.

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Doug Ohlemeier
Eastern Editor

Growers are breathing a sigh of relief as they expect a more typical year with few of last August’s planting disruptions after Tropical Storm Fay brought torrential rains. The rain hit during the critical fall planting period.

Then, in May and June, downpours from another storm — which hurt north Florida’s potato deal — cut Georgia’s yields and helped bring many vegetables in the deal to a premature end.

The extreme weather kept many growers out of the fields and prevented completion of some of their spring harvests.

Yields were down by as much as 50% in some fields.

Growers this season, however, seem more optimistic that this fall will bring a regular deal.

While most report acreage being consistent with last fall, a few say they’ve increased plantings by a small amount.

Joey Johnson, president of J&S Produce Inc., Mount Vernon, Ga., says the heavy rains brought abnormally high prices for its growers’ green beans.

Johnson said his growers experienced the highest season price average in five years. Bushels, hampers and crates of machine-picked beans averaged $13.

While weather always remains a concern to all growers, another pressing issue could test the industry.

Earlier this year, the food safety issue hit the heart of Georgia’s peanut industry.

Federal authorities linked peanut products from a Georgia plant to a nationwide salmonella outbreak.

Though the scare, which started in January, didn’t involve fresh produce, it could have had a longer-term effect. Some peanut growers tried to switch to growing vegetables.

Their entrance in the deal, however, didn’t represent a serious expansion of the state’s vegetable acreage, Johnson said.

“They were insecure about growing peanuts this year,” Johnson said.  “We were worried too many would jump into farming, but so far, it’s been okay.”

Slow sales

One thing Georgia grower-shippers are facing is weaker demand.

With local deals and backyard vegetable gardens, grower-shippers are used to the usual slowing of summertime sales,
This year, however, things feel different, they say. Those backyard deals remain, but growers say they can definitely feel the slowing of demand caused by a weakened economy.

“The economy is putting a strain on produce sales,” said Shay Kennedy, co-owner, vice president and sales manager of Georgia Vegetable Co. Inc., Tifton, Ga.

One thing that doesn’t help the grower or supermarket is the maintenance of high-priced produce.

“What’s upsetting is with all of these prices being so low, we still see high retails in stores,” Kennedy said. “I talk a lot with consumers and they can’t believe prices are so high when growers aren’t getting a lot. Somewhere, we have to meet in the middle.”

Kennedy said one thing that could help perk up sales is if retailers could price their produce more competitively. The higher movement would likely return more profits to the stores that have to meet targets, as well as to their suppliers.

Higher prices may scare the average family from buying as much fresh produce as it may have in the past.

That could prompt many shoppers to turn to less expensive frozen and canned foods until fresh prices revert to lower levels.

E-mail dohlemeier@thepacker.com

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