Apprehension Greets Organic Veggie Winter Transition

On Oct. 30, Darrell Beyer, organic salesman for Boskovich Farms Inc., Oxnard, CA, told OPN that the organic green onion market was a solid $18-$22 per carton.  That would be more impressive if he didn’t then reveal that the conventional market was in the $30 range. 

Earlier in the month, Mark Crossgrove, senior vice president of sales and marketing for The Nunes Company, said that scenario played out a number of times over the summer as the price on specific conventional vegetables outpaced that of organics, if not on a regular basis, at least often enough that it wasn’t a complete anomaly. Crossgrove said many Salinas growers added organic acreage this year causing supply to exceed demand at various time throughout the summer. On the organic side, he said a sudden increase in supplies can quickly outpace demand.

Beyer explained that for organic green onions, supply and demand have remained in sync leading to a strong but steady market. On the conventional side, he said sharp decreases in supply have led to spikes in the f.o.b. price, causing it to top the organic quote. “That happened a number of times this summer on a variety of crops,” he said. “If I wasn’t sharing an office with the conventional sales guys and didn’t see it with my own eyes, I wouldn’t believe it was happening.”

It is with this backdrop that commodity vegetables are starting to transition from the summer/fall deal in coastal California to the winter vegetable deal in the desert regions in California and Arizona, as well as to several growing regions in Mexico. 

Crossgrove believes that winter acreage for both the conventional and organic commodities will be down because of the poor vegetable markets that have been commonplace for most of the past year. Last year’s winter deal wasn’t very good for conventional product and neither sector has fared well this summer. 

Beyer agreed noting that growing organic vegetables in the desert is an expensive proposition, adding that “80 to 90 percent of my winter (organic) vegetables are coming out of Mexico, where it is cheaper to grow.” 

But Mexico has had some weather problems this fall which has slowed the start of the deal. “Transitioning down into Mexico this year has been a challenge,” said Mark Munger, vice president of sales and marketing for 4Earth Farms, which is headquartered in Los Angeles but sources from many different regions. “We are getting off to a little bit later start because of the two hurricanes that came through Baja (California). They brought a lot of rain to the growing region and slowed down the crops.”

4Earth, which splits its supplies fairly evenly between organics and conventional, specializes in dry vegetables, including the squashes, peppers, Brussel sprouts and green beans. For those items, Munger said demand on the organic sides continues to grow so he is expecting a relatively strong market this winter. “We haven’t seen demand slow down yet,” he said.

Strong markets may also return to the organic staple vegetable crops, such as iceberg lettuce, romaine, cauliflower and broccoli, if the reduction in acreage that is being predicted truly occurs.

In The Nunes Company “Market Update” report on Oct. 25, indicators pointed to better marketing conditions for organic crops. Iceberg lettuce supplies were winding down from Salinas with only minimal supplies expected this week. A “firm and steady market” was predicted for romaine moving forward, and “significantly light supplies” were predicted for the leaf items. Steady markets were predicted for both organic  cauliflower and broccoli. 

The Salinas Valley will continue to be the main production area for organic cauliflower and broccoli through November, but the organic lettuces will be shifting to the desert during the week of November 5. On Monday, Oct. 29, the USDA’s National Specialty Crops Organic Summary noted that strong demand was evident for many of the lettuce items as they ended production in coastal California and began that transition. Organic iceberg lettuce had an f.o.b. price that day of about $20 with romaine and the leafy items in the $24 to $28 range. Those were welcome numbers for organic vegetable growers and could climb higher as this transition appears to be creating supply uncertainty.