Celery Market Falls to Earth; Lettuce Prices Soaring

After months of sky-high f.o.b. prices for celery, the market came crashing down on conventional product during the last week of June falling from $60 to $20 in a couple of days.  Organic celery didn’t fall quite as far but the market this week was below $30.

In the meantime, pricing on both iceberg and romaine lettuce went in the other direction with the market on organic romaine hitting $28 this week and expectations it could increase even more after the 4^th of July holiday.  The iceberg lettuce market was in one of those weird situations when conventional product was outpacing organic iceberg on the open market.

Brian Peixoto, sales manager, Lakeside Organic Gardens LLC

Brian Peixoto, sales manager for Lakeside Organic Gardens LLC, Watsonville, CA, told OPN this week, that “romaine is flying out of our coolers.”  He added that the f.o.b. price for organic romaine was on the rise, billing $28 per case on that day, with organic iceberg returning $14 for a 12-count carton.  In comparison, he said red and green leaf were in the $16 range.

On the conventional side, Jason Lathos of Church Bros. LLC, Salinas, CA called the iceberg lettuce market “hot, hot, hot” on that same day.  He said the market was in the low $30s and he expected it to remain strong throughout the week of July 8.

Peixoto noted that for both organic and conventional lettuces the culprit in the short supply situation is the weather, he said, quipping that the hot temperatures don’t care whether they are disrupting conventional or organically grown crops.

Jason Lathos, Church Brothers Farms

Lathos explained that the Salinas Valley was inundated with less than ideal growing conditions throughout May and June leading to decreased yields.  “We had wet weather throughout May,” he said. “On 21 of the 31 days we had rain or at least sprinkles.”

Then during the second week of June, temperatures topped 100 degrees for four straight days, including warm nights and mornings.  “Those four days everything got cooked,” Lathos said, resulting in reduced yields as the month wore on.  “Right now, we are seeing yields at half of what they should be.”

The crop outlook newsletter from The Nunes Company in the last week of June spoke of the same conditions.  “Planting gaps and weather-related condition challenges will continue to cause market volatility on select items. Leafy vegetables have been especially impacted in the recent weeks from the early June heat.”

The newsletter said light supplies of conventional and moderate supplies of organic iceberg lettuce would continue for the next couple of weeks, with the market expected to remain steady in the $30+ range over the coming week.

Celery, on the other hand was moving in the opposite direction.  Darrell Beyer, head of organic sales for Boskovich Farms Inc., Oxnard, CA, said the organic celery market took a nosedive during the last week of June.  Boskovich was finishing up its celery from Oxnard that week and Beyer had very strong supplies.  “I sold out at between $26 and $28 because I had a lot of celery to move.  I think I was a little under the market.”

Darrell Beyer, head of organic sales, Boskovich Farms Inc.

With Oxnard production finished, Beyer predicted that moving forward the organic celery market should be in the $28-$30 range, though he said Boskovich won’t have any production again until after the summer.

The organic celery market will be tempered a bit by the supply and demand curve on the conventional side.  For five months, both markets have been very strong, so it makes sense that they fell in tandem as well. Lathos expects the conventional celery market to find equilibrium after the 4^th of July holiday in the $16 to $20 range.  He said production is increasing in Salinas to counteract the decrease in the Oxnard region.

While that f.o.b. price in the high teens is a far cry from what the industry has been experiencing all spring, Lathos said it is still a good market.  He noted that in 2018, the f.o.b. price on celery was below cost most of the year.