GRAB BAG WEDNESDAY
Good morning and Happy Wednesday. We are going to make this a Grab bag Wednesday because I want to hit on a few topics. First, I will be at Viva Fresh Friday, Saturday and Sunday.
What better way to celebrate my anniversary with my wife on Friday?JPlease let’s get together to speak produce and to make it better for all of us.
I read an article about a spike in tomato prices due to the cancelation of the suspension agreement. https://www.azcentral.com/story/money/business/economy/2019/04/23/prices-could-rise-drastically-if-u-s-puts-tariffs-mexican-tomatoes-trade/3549560002/
I personally do not share this sentiment and here is why. You all remember when E logs were enacted last year, and prices went through the roof for our freight? Then what happened? Drivers were trained and hired, and their pay increased and within 1-year rates normalized. There is no difference in the tomato business and because of growing cycles the transition will take less than a year. There could be an immediate spike in prices but that will all depend on supply and demand and I can tell you from many years of experience that in May and June supplies are 9 out of 10 times more than the demand. Now if we do get a 40% to 80% spike in prices, I can tell you one thing. Every grower from Canada to Culiacan will be growing tomatoes and prices will fall. As I have stated many times and something the US Government, large retailers, growers don’t understand that is the produce business there is no fixed price that will work and that will not be overcome by the natural ebb and flows of supply and demand. It’s time to go with the current and stop going against it.
I have been writing these reports for over 20 years. My mantra has evolved but has not changed in its basic foundation. You can’t fix prices, retail is broken and needs to go back to some old school marketing coupled with new world technology, rack systems make terrible displays and limit your sales, Packaging is not necessary and may be hurting your sales as well as the environment and if you have been reading my post and articles the list goes on and on. The good news is that lately I do see some changes. Retail giants are changing formats, some are doing test limiting packaging, this makes me laugh, a test like this is some novel idea. There are some newcomers upsetting the paradigm by offing value pricing. I am not so bold as to say I had anything to do with this and my intent was not receiving accolades, my intent way to make the business I love better for all of us. So, if someone out there is in fact reading these and helping to make these changes please call or write me because I have so many more ideas that my head may explode. I don’t need the accolades I just want the changes that will benefit all of us.
I hate to be the bearer of bad news but this Spring Mexican deal in my opinion does not have the volume of the past, which is troubling but understandable given the weather events of this past season. I feel that many items may become unavailable sooner rather than later and we could see gaps in May, this remains an observation not a fact at this point, I will update with any new information.
On the demand side the end of the month coupled with after a holiday destroys demand and prices will remain cheap across the board. The good news is May is just around the corner so prices, supply and demand may firm.
I would love to meet my almost 9000 followers at Viva Fresh so we can #MPGA, so please call or write me.