Cold Weather, Light Demand Hamper Organic Veg Sales

Cold temperatures in the winter vegetable production areas of Mexico and the US Southwest have limited some organic vegetable supplies, but market demand still seems soft overall despite the tighter availability.

This situation has resulted in unsettled FOB markets almost across the organic sales board, but suppliers did point to a couple of items that have seen an uptick in the market price in recent days: bell peppers and beets. On the other hand, the celery market seems to be emblematic of the current malaise as the previously sky-high FOB price has dropped precipitously over the last couple of weeks.

Earlier this week, suppliers were looking ahead at the forecasted cold front that is expected to envelop the country in the next few days and were hoping mid-February offers some warmer weather along with its two uplifting quasi-holidays—the Super Bowl and Valentine’s Day.

Jose Luis Obregon, President of IPR Fresh in Nogales, AZ, said organic bell peppers are in a bit of a supply gap caused by cold weather. About 70 percent of the company’s sales are bell peppers, with half of their volume being organic bells in all the colors. Obregon said the first peppers harvested this winter hit the market in good numbers from mid-December through mid-January. 

Jose Luis Obregon, President, IPR Fresh

The past two weeks, however, have seen cold weather in Mexico’s Culiacan Valley, causing the second set on the bell pepper plants to be delayed. Obregon noted that all peppers, including conventional and organic, are in short supply with a small uptick in price but nothing spectacular. He predicted the short supplies would last for at least a couple more weeks.

Obregon said the first peppers harvested this winter hit the market in good numbers from mid-December through mid-January. 

Robert Schueller, director of public relations at Melissa’s Produce in Los Angeles, said organic bell peppers are the company’s top organic item and noted supplies are very light currently.

Robert Schueller, Director of Public Relations, Melissa's Produce

“There were some weather related issues over the last several weeks that have limited supplies from Mexico,” Schueller said. “The full effect [of the drop in supplies] is happening right now. Sometime next week we should be in full distribution again.”

The Melissa’s representative agreed that the market is not reacting as it typically does when a shortage occurs. “FOB prices are not strengthening significantly,” he said. “They’ve gone up a little bit but not that much. And we are not getting many calls outside of our normal customer base.”

“There were some weather related issues over the last several weeks that have limited supplies from Mexico. The full effect [of the drop in supplies] is happening right now. Sometime next week we should be in full distribution again.” - Robert Schueller

Organic red bell peppers are typically a popular item around Valentine’s Day because of their color, Schueller said, which is synonymous with the occasion. He said he also expects the watch parties for the Super Bowl to give a boost to produce sales.

Michael Boskovich of Boskovich Farms in Oxnard, CA, said the cold weather in Mexico, desert production areas, and Oxnard has put a damper on organic vegetable supplies, though it hasn't caused much upward pressure on prices. Organic beets are one item that is showing some reaction, he said, as the market price on the item was in the $20 range but could feel more price pressure as the supply gap increases.

Michael Boskovich, Organic Sales, Boskovich Farms

“We’ve been getting decent numbers out of Mexico with good movement, and now the gap is moving the market a little bit higher,” Boskovich said.

Organic beets are one item that is showing some reaction, he said, as the market price on the item was in the $20 range but could feel more price pressure as the supply gap increases.

Darrell Beyer of Bluebird Mountain Organics in Reno, NV, agreed that organic beets have a solid market in the $20s for a 12-count box but noted that the market is not moving like one would expect with declining supplies. 

Darrell Beyer, Founding Partner, Bluebird Mountain Organics

“I can’t figure out what’s going on,” he said. “All across the board, supplies are down, and we don’t have any barn burners. Demand is down. Two weeks ago, we had very hot markets and now we don’t.”

Organic celery, Beyer said, is the poster child for the current situation, as pricing went from $50 [a carton] to $20 in a matter of days.

But like all the other eternal optimists in the produce industry, Beyer is hoping it’s going to turn around just as quickly—with Super Bowl promotions and parties being the catalyst.