The Bang or the Bust or Hogs get Slaughtered.
Good morning and Happy Sunday! Let the Thanksgiving pull begin. I can remember a time when I was a street buyer, when we would come to work Sunday morning of Thanksgiving week and not go home until Wednesday. Yes, we were that busy, we would load the trucks, they would unload at the store and then return for more. AHH the good old days. Back then our retail stores would do two or three times their weekly volume. As an outsider now looking in, I would like to know if your stores have that dramatic change in volume on this holiday? My guess is no? To me it seems the only difference in volume is that 5 days of normal business is compressed into 3,at the terminal level, due to the markets being closed Thursday and Friday. The past several years I have seen the spikes of high prices going into Thanksgiving followed by the bust of much lower prices as the holiday moved closer and past. You have heard me say “this business is the same on every level only the volume changes” In that light the farmers grow to hit a peak in volume, the wholesalers buy extra to meet the anticipated demand, the retailers also do the same and finally the consumer buys in abundance for that day’s feast. BUT then, like my Mom did when she was alive, cooked for 100 for a party of 30 so we had leftovers for 2 weeks, retailers and wholesalers overbought and didn’t sell out and the farmers who grew to hit a peak was still peaking because you can’t stop the plants from producing. This my friends is the bang and the bust of Thanksgiving. The 10 to 14 days following Thanksgiving and also the 10 to 14 days following New Year are probably four of the top 10 worst weeks of the year in our business. My advice? Don’t buy the hype, buy what you can sell, because this year like always the BUST is louder than the bang. Demand makes a market, don’t forget this fact!
RED PEPPERS – This year like the rest when we need them the most, we hit a gap. Most of California reds are done with the exception of Coachella which are just starting and will not be able to fill the holiday demand. The next week will be demand exceeds supplies and this market will be HOT. We will get some relief with availability of hot house peppers but not enough to cool off this market. I honestly believe at the Terminal level based on short supplies and increasing demand 15# XL reds could bring $35 and same with Choice. If it doesn’t start, there it will finish there. I also believe prices will be high right up to Thanksgiving. We should have some Mexican red peppers right after Thanksgiving, just in time for the no demand period.
YELLOW PEPPERS- No California here only greenhouse available, can easily bring $20 plus for 11#
GREEN PEPPERS – High priced but not tight.
GREEN SQUASH -Green, yellow and grey squash are my least favorite items going into the holiday, especially when they are quoted from $12.95 to $16.95. Now barring a major weather event I can go back 20 years and say the bust always followed the bang. More times than not I have seen $16 markets fall to $4. I am not saying it will definitely happen this year and I am also not saying this may be the 1 in 20 year that the $16 works. What I am saying is if I were a gambling man, I would bet on the former rather than the latter.
EGGPLANTS – I feel the same way about eggplants as I do about summer squash but to a lesser extent.
CUCUMBERS – Demand is good here and cukes are moving well, $25-$30 at the terminal level seems right.
ROMA TOMATOES- Well it seems like consumers will have to continue to pay the cost of the Government getting involved in the tomato business. $16.95 to $20.95 fob $24 give or take at the terminals.
HARD SQUASH – Steady as she goes on Acorn, Butternut and Spaghetti. Kabocha will be lower.
AVOCADOS – No change here still reasonably priced. I will be traveling back to Colombia next week; no, I don’t give up that easily. I will keep you updated on our program.
CRENSHAW MELONS – We are still packing and shipping with high brix.
ORGANIC RAPINI – We will be ready to ship in about 10 days and will continue into January. Place your orders now for Christmas and New Year’s business.
PAPAYA - Our Hawaiian variety papaya grown in greenhouses should cross from Mexico the week.
TRUCKS - Demand for trucks has also increased as well as prices. Still a far cry from the $8000 plus freight rates from last year, but rates have moved up about $500.
As I mentioned earlier, I will be traveling to Colombia next week. We will be having a Christmas Party with our Colombian’s staff and their families. I may not be in any shape to write a report next Sunday, just a fair warning. I will try my best. Thank you and have a great day.
The following are links to my articles in Produce business magazine for July and August. I will also have articles in September, October and November and will place the links in future posts once they are available.