It's time for produce!
Good morning and Happy Wednesday. It seems like on any given week I have too much to write about or this week which there is nothing to generate accolades or displeasure. A few points, that many retailers are now getting away from unnecessary packaging, are concentrating more on fresh, reconfiguring and updating their produce departments, and adjusting their pricing. This is due to many newcomers that are not stuck into the large retail produce paradigm and are taking market share away from the giants. As I have said may times before most independents “get it”, they know that fresh brings them into their stores and then they buy everything else. They also sell their products seasonally as supply and demand dictate and are not locked in to a fixed price, which most of the time is lower than the large retail fixed pricing. Real produce people in produce is the way forward.
Tomatoes for the first time in 25 years are being sold without a floor price, ALLEAUAH! During the past 2 weeks prices have fallen below the old $8.30 minimum. Now that may seem like a bad thing, but I believe it is a good thing, Why? During the past 4 years every time the market on tomatoes was at the $8.30 for an extended period of time, many tomatoes went unsold, dumped or sent back to Mexico or were sold to Mexico or Canada at a very large discount. Sometimes as low as $.50 to $2.00 a box, a far cry from the $8.30 needed to sell in the USA. Now with prices not fixed the market can adjust to the demand by dropping the price and I would bet that this scenario will be better on average than under the suspension agreement and yes factoring in the duties. Remember most large growers have a Mexican growing company and an American distribution company so the duties go in the left pocket or the right pocket but in their pocket. In my opinion duties will be absorbed in the price as a cost of doing business and prices will rise and fall on supply and demand and not because of a duty. A major factor will be if there will be more or less tomato growers or decreased acerage, because of the duty, which will increase or decrease supplies. Freeze, floods, high winds, crop failure are inherent factors in our industry, and they will still be the major factor in prices going forward. Supply and mostly demand are what drives prices, nothing more and nothing less.
RED PEPPERS – California is still not a major factor on the supply side and Mexican product is finishing up on elongated variety. This market should stay firm for at least another week, longer if the weather does not cooperate.
GREEN PEPPERS – We are searching for a new bottom. New peppers crossing in Texas, new crop in Georgia and great volume in California.
CUCUMBERS – Steady as she goes with the possibility of getting off the bottom prices.
EGGPLANTS Demand is great supplies are not, market stays firm.
GREEN AND YELLOW SQUASH Too much volume from too many states, will remain cheap.
WATERMELONS – Higher temps in the Northeast brings higher demand and higher prices. The holiday also helped sustain prices.
ROMA TOMATOES – In fact all tomatoes are being quoted below the old minimum prices. FYI in the past the end of May to beginning of June is when Roma tomatoes usually rise in price. Buy sooner than later.
Have a great and we will see you on Sunday.